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Starting a small business is one thing, but sustaining and growing a business is another. We know that Timbali can assist start-up entrepreneurs very well, with a 100% success rate for entrepreneurs in year 1 and 2 of their businesses. The other side of that coin is ensuring that entrepreneurs in the growth phase can overcome their barriers to growth. Our track-record of successful graduates shows that we also excel in this area as an incubator. How do we do it? We provide access.
The key barriers to growth in a small business are expanding markets, accessing growth funding and capital, managing cash-flow, and managing technical processes to not incur waste of produce that could occur with such growth.
Exports currently make up 35% of Timbali’s farmer’s sales mix. This is 1.2% of the total South African export market. Our major international customers have indicated that they would like to increase the amaVeg market share to 15%. This will ensure that exports become 65% of the farmers’ sales mix, and they get the best possible prices for most of their produce. This market opportunity is created by coordinated production in a global Gap accredited environment, something no single small-scale farmer can achieve on their own.
2)Access to capital
In order to jump on the opportunity presented to the market, the farmers have to increase their production. The input cost and initial labour cost has to be covered. It is very difficult to cover this from organic sales and profits. By being in an environment where the services are delivered that provides each business owner with monthly financial management statements, annual statements and tax submissions, it enables the farmers to apply for funding through Timbali’s established and well-respected brand. The farmers now have the credibility to access the capital to grow their businesses.
Cash flow is king in every business. The fact that the farmer can track daily market prices and daily sales against their planned production schedule, and receive weekly quality updates, enable them to manage their cash flow to repay loans, and optimise profits by managing costs.
4)Lean production during growth
Usually, businesses implement tons of processes in their growth phase, and more often than not, they over process and create waste. Timbali’s system is a lean management system that allows the farmers to grow in an already planned manner, minimising waste, adhering to lean production practices, and ensuring they get maximum production from their crops.
Graduates, out-growers and incubatees that are part of the Timbali clusters have the opportunity to grow their businesses and be part of the solution for food security in South Africa, and abroad. These farmers will not be part of the statistics of start-up and acceleration businesses that fail, due to the investments of our sponsors: SEDA, the Jobs Fund, the European Union and the Department of Agriculture, Forestry and Fisheries.