Cape Town’s thriving entrepreneurial environment regularly pulls in some of the most ambitious and creative entrepreneurs in the country. Why is this so important for all of the city’s residents?

With more venture capital invested here than anywhere else in South Africa, the Mother City is home to some of the most exciting start-up businesses – companies that are not just making money, but also creating wealth in which communities can share.

“It’s difficult to create wealth just for yourself,” observes Martin Feinstein, managing director of Traction, an organisation that designs and implements programmes for entrepreneurs and small businesses. “As a successful entrepreneur you also tend to create it for your partners, employees and customers. Besides the innovation, competition and cheaper prices, entrepreneurs also create other entrepreneurs.”

Bruce Wade, founder of Entrepreneur Incubator and Academy believes that entrepreneurs provide one of the most dynamic answers to unemployment.

“For every one person you employ, you’re supporting seven others. That’s huge,” Bruce explains. “The entrepreneur industry is critical to job growth in the city, but it’s a tough market out there. Half of all entrepreneurs and small businesses fail before three years and a further 90% before the first ten years.”

Cape Town supports small business

That’s why the City of Cape Town is committed to supporting small businesses: “Every person in Africa who has a business idea and who needs a launch pad should know that they can come to Cape Town,” affirms Alderman Belinda Walker, mayoral committee member for economic, environmental and spatial planning. “This city must be known as having the best-developed entrepreneurship ecosystem in the country.”

Already Cape Town is seen one of the most nurturing urban centres for entrepreneurs. Why? “Things work better here,” Martin explains. “The city makes sure that the by-laws are kept, and this makes it a cheaper, more efficient place to live. Inconvenience is a tax on your time, and if the city can save you that time you can spend more of it making your business work.

“Furthermore, the geography of Cape Town creates nurturing and inclusive environments for small businesses. That’s why it’s also important to grow the residential component of the CBD. This helps Cape Town becomes the 24-hour city.”

Do you want to be part of Cape Town’s entrepreneurial community helping create a more inclusive city? Read the resources available from Cape Town Entrepreneurship Week 2011 and check out the central city publication Your Business magazine for tips on making entrepreneurship work.

Three ways to help start-ups 

Bruce Wade speaks about what three things could change to make starting a business in Cape Town easier:

• The regulatory environment: “Businesses, no matter how small, fall under the same regulations as a large corporate. And anyone making under R15-million each year is a small business – that’s more than a million a month! This forces the average person to comply with stringent labour and tax regulations. It took me 14 months to start a small business. In that time I couldn’t open a bank account, I couldn’t register for tax, I couldn’t pay my employees.”
• Tax breaks: “Tax breaks could also encourage an entrepreneurial environment. Firms that make below a certain amount shouldn’t pay tax. This is international practice and should be introduced here.”
• Immigration: “Immigrants in Cape Town are often highly skilled people who aren’t allowed to work. We need to make their skills available to employers.”

Connect on Twitter

• Bruce Wade (@bruce_wade)
• Entrepreneurs thinking big (@ideateblog)
• Your Business magazine (@yourbusinessmag)

How can Cape Town be more supportive of start-ups and new business – and how can those businesses in turn help create widespread wealth and opportunity? Leave your comment below or send them to info@capetownpartnership.co.za.

More reading: Cape Town’s favourite coffee spots that provide free internet access 

This article first appeared in the November issue of City Views: Cape Town as an innovative design city.

 Photo by Bruce Sutherland, City of Cape Town

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