Hubelo Virtual Incubator

24/05/2020

How to Survive COVID19

Cash is king

The most urgent threat facing business owners right now is cash flow. But for Zucchi, running out of cash and being faced with the imminent foreclosure of your business can be an incredible opportunity to reinvent how you run your business.
“Just because you’ve always done things in a certain way, doesn’t mean that’s the right way,” he says. Have you realised over the past few weeks that you don’t need huge headquarters? Could you save money by buying into the co-working trend? Use this time to look at your overheads and figure out where you can slim down.
“Once you have reduced your overheads, the strongest piece of advice is for all entrepreneurs to put a sign on their wall reminding them to put aside a portion of their income for a rainy day,” says Zucchi. “Companies around the world operate with no cash as they are driven by models of constant growth, but this is a huge mistake. Cash is king and we all need reserves of it.”

Navigating cash flow problems
Zucchi advises that honesty is the best tool for dealing with cash flow issues.
“Update your staff and suppliers constantly,” he says. If need be, tell your employees that the only way to keep the business going is via salary cuts. When it comes to suppliers, think of inventive solutions that can benefit you both – perhaps you can offer them a partnership on the next order, where they charge you cost price in exchange for a split of the profits. “The important thing is to be open,” says Zucchi. “You will be surprised at how much goodwill and leverage this can buy you.”

Find your niche
For Zucchi, finding your niche is business 101. “The world is moving away from multi-service providers towards niche services, and this is the perfect time to figure out what yours is.”
When a potential client looks at your profile or your website, they should be able to tell straight away exactly what you do. Your offering should be focused and specific, rather than generic and high level.
“People need to know exactly what problem you solve,” says Zucchi. “There are hundreds of thousands of website developers out there. On your business card, don’t say you’re a website developer. How about rather saying you help small shop owners go online to generate more revenue?”
Use this time to reassess your marketing strategy and make sure it is showing your customers exactly what you do and how you can help them.

Generate leads
While we are suspended in time, you have the perfect opportunity to start generating leads for potential clients, so that when the engine starts again, you have a handful of contacts ready to do business with you.
There is a lot you can do that doesn’t cost money, suggests Zucchi. “Did you know that 87% of entrepreneurs or managers are on LinkedIn? If you are serious about your business, use this time to change your LinkedIn profile so that people really understand what you sell,” he says. “Once you have found your niche, and start sharing practical knowledge around that, people will know how you add value to other organisations and people.”

Ask for help, not money
Zucchi has noticed that in SA there is a mistaken perception that funding is everything. “If you want to grow your business, the biggest challenge is access to networks, not funding,” he says. “Approaching funders with the proposition that you have 250 customers who want to buy from you, and are looking for a partner to help take your product to market, is a much stronger proposition than simply asking for money.”
For this reason, Zucchi suggests asking people for introductions, rather than money. “Give others the opportunity to help you, and you’ll find there’s plenty of support out there. You just need to make it easy for people.”

Adapting to the future
“I would be a fool if I told you with absolute certainty what the future holds, but I can tell you about a big trend we are noticing,” says Zucchi.
He explains that there are now more professionals and SMEs than ever before, and that all businesses should be making their offering suitable to this growing sector.
“We often want large corporates or governments to buy big contracts, and commit to long-term contracts and large consulting deals, but with the rise of SMEs, the biggest opportunity I see for businesses is to break down what we sell into much smaller components,” he explains.
No entrepreneur that is worth their salt hasn’t gone through failure
Zucchi is a firm believer that it is virtually impossible for a business owner to be successful without having gone through failure. “It’s not the end of the world if you need to close,” he assures. “The economy will pick up again and you will have other opportunities.”

12/07/2018

Summary

New credit scoring and risk assessment models are needed:
The report shows that two of the key (traditional) instruments used by funders to assess SMME lending risk, namely
credit records and collateral, represent a major hindrance to SMMEs securing funding. For funders to close the credit
gap, alternate/innovative credit scoring models will need to be developed that are designed specifically for this target
market, that enable more accurate assessment of the risks.

Credit scoring models and SMME credit record data:
SMME funders continue to use traditional scoring models developed for medium and large businesses that are
largely prejudicial for the majority of micro, very small and small businesses. There is also insufficient quality
business credit record data in South Africa for funders to access, which further exacerbates the challenge of
accurate and appropriate credit scoring (Finfind (2018) team interviews).

Report Areas and Recommendations

4. Traditional credit models are widening the SMME credit gap.
Qualifying for credit is a challenge for SMMEs, especially those that are less than three years old and are not
profitable. In a traditional lending model, banks and other funders rely on financial data from balance sheets,
bank transactions and credit bureaus to make lending decisions, but earlier stage businesses that don’t have a
financial history end up being disqualified for most traditional sources of finance. Financial institutions relying
on traditional credit reports to make credit decisions have had limited, to no, visibility on the new credit usage
behaviour of SMMEs from alternative data sources. Banks struggle to serve SMMEs as they treat business as a
single market, and as such apply traditional lending methods that use collateral and traditional financing
scorecards as a one-size-fits-all approach. This approach is detrimental to SMMEs trying to access finance.

Recommended Solution
A combination of traditional credit risk models and the development of accurate new predictive models of credit
assessment using new sources of data/alternative data. Alternative data refers to the inclusion of non-financial
payment reporting data in credit files, such as telecommunication and energy utility payments, average salaries
paid per month to employees, litigation and compliance defaults and social media ratings, amongst others.

www.accesstofinancereport.co.za

21/12/2017

Marcus Jooste said - He was 27 when he became the financial director of GommaGomma, where his path crossed with Daun, and he invested in them. “I just think you’ve got to have a lot of passion and drive. In a way, I was very lucky that I was very hungry. I came out of university with R100 000 of study debt – but with a chartered accountant qualification. After that, the money part of it got lost a long time ago for me. It’s the excitement, the people. To be in a business where ten of the other execs are your best friends that is unique,” Jooste said. Jooste said in the interview that he was not a “due diligence guy”. “If you have to count the stock, read through the leases, check the title deeds – you should never have considered the deal in the first place. The critical part is the human due diligence and that’s what I spend 90% of my time on.

21/12/2017

http://www.huffingtonpost.co.za/christopher-rutledge/the-seagulls-name-was-markus-how-a-patriarchal-culture-at-steinhoff-allowed-it-to-hide-the-losses_a_23303325/?utm_hp_ref=za-homepage

A former staff member recalls the tactics used by former Steinhoff CEO Markus Jooste and his "Stellenbosch Afrikaner mafia".

05/12/2017

We thus have a theory of the rights of property: that every man has an absolute right to the control and ownership of his own body, and to unused land resources that he finds and transforms. He also has the right to give away such tangible property (though he cannot alienate control over his own person and will) and to exchange it for the similarly derived properties of others. Hence, all legitimate property-right derives from every man's property in his own person, as well as the "homesteading" principle of unowned property rightly belonging to the first possessor.

05/12/2017

Similarly, one of the decisive reasons for the attempt by the Southern Confederacy to secede from the American Union was the Morrill Tariff Act of 1861, which imposed a 47 percent tax on the value of all imported goods. At the time, the American
South exported three-fourths of its agricultural output and imported in tum most of its manufactured goods from abroad. In effect, the tariff meant that the South was forced to pay higher taxes that went to the North to subsidize inefficient
northern manufacturers and industrial workers.

17/10/2017

If the US FEd is getting this wrong, How more so our SARB. Mises said": Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term "inflation" to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation."

On October 4 2017, the former governor of the Federal Reserve Daniel Tarullo in a speech at the Brookings think-tank in Washington said Fed policy makers do not have a reliable theory of what drives inflation.

15/10/2017

Hubelo Virtual Incubator is starting a group of Entrepreneurs in Financial Services (call centers, debt collections, finance, insurance etc). We are looking for interested entrepreneurs who want to join this group. Will be a Whatsup or Twitter based group or on both platforms. Will depend on a number of factors. Pls respond in next 72hrs with either twitter handle or cell no.

14/10/2017

Contribution Margin: What It Is, How to Calculate It, and Why You Need It https://hbr.org/2017/10/contribution-margin-what-it-is-how-to-calculate-it-and-why-you-need-it?utm_campaign=hbr&utm_source=twitter&utm_medium=social

03/10/2017

We need to be clear, economic mismanagement in Zim is the seen by its failures- the land grab, indigisation programme, the creation of inflation by bond notes money flood.

ON November 11 last year, the Zimbabwe Independent (ZI) — the country’s leading business and investigative newspaper — interviewed world-renowned currency expert Steve Hanke (SH, pictured), a professor of Applied …

21/09/2017

The FED is wrong

A few short years ago, it was considered tinfoil hat conspiracy theory to say that the goals of the Fed and their QE programs were to boost stock prices, real estate prices, and basically almost every other asset class.

08/09/2017

The BRICS are starting to move away from the dollar for their purchases. What is the SA position. http://www.zerohedge.com/news/2017-09-02/de-dollarization-accelerates-china-readies-yuan-priced-crude-oil-benchmark-backed-go