Three township SME business ideas to watch this year

The original article can be found here.

THE South African township economy is vital to the country’s post-Covid economic revival – and for good reason. While many township businesses may be in the informal economy, almost 20% of South Africa’s total employment is provided by the informal economy. With a record-high unemployment rate of 34.9%, the informal sector is literally the bread and butter of thousands of South Africans.

Forbes called South Africa’s informal sector, “the economy that never sleeps” and this couldn’t be more accurate as township entrepreneurs offer a range of goods and services. Township enterprises are diverse and while often micro in nature, they are born out of opportunity and geared to meet the needs of township communities and beyond. Operated by township entrepreneurs, both necessity and opportunity township enterprises have given rise to successful black entrepreneurs who have broken out into more formal business arenas.

If you’ve been keeping an eye on recent economic developments in South Africa’s vast townships, you may have noticed that they are fast becoming hotspots for innovation, born out of the unique ability to turn problem-solving into profit-making.

Be inspired by these three township business ideas that are positioned perfectly within the country’s current economic climate.

Storage solutions and units
Already extremely common in countries like the US, storage units are now gaining huge popularity in South Africa and this is true for township areas too. People almost always have too much furniture and other items for the space they have available and therefore require adequate space to store these until they decide to sell, donate or find the right room for them.

A township storage operation need not be overly complex or require expensive equipment, the key here is a sizeable space, divided up into rentable and accessible units that can assist people in keeping the items they don’t currently have space for.

Bicycle sales and repair service
With the renewed focus that the pandemic has placed on physical health and mental wellbeing, bicycle rental companies, following the example of a number of European companies, are proliferating throughout the suburbs and coastal towns of South Africa. This trend towards better health, coupled with realities such as the recent record-high petrol hike, is compelling South Africans to use bicycles not only as a means of exercise, but as a means of transport too.

We’re seeing this trend spill over into township communities where companies like the Langa Bicycle Hub are encouraging township dwellers to “join the cycling revolution”. The Hub offers bicycle repairs, rentals, sales and cycling classes – an ideal business model that brings in several streams of revenue from different product and service offerings. Like the Hub, other township bicycle companies can find innovative ways to realise a profit, while making a positive social impact, by improving mobility and providing a creative solution to multiple challenges.

Sneaker cleaning
“Sneakerhead” culture is booming in South Africa. Here, we call them “takkies” and in townships, the latest Nike Air Force 1s and iconic silhouettes from Bathu, Mpahla or Drip are in high demand. Gone are the days when takkies were left to age naturally and accumulate scuff marks. Today’s sneakerheads are collectors – connoisseurs even, who are meticulous about the cleanliness of their takkies.

Not only has this created an opportunity for the import of limited-edition sneakers, but it has led to the mushrooming of sneaker cleaning services. These companies offer a boutique service, sometimes with door-to-door collection and delivery. Their services include sneaker repair, whitening, cleaning and sometimes sneaker customisation. For aspiring entrepreneurs, the development of this trend marks a golden opportunity to build and sustain a brand that allows township dwellers to enjoy the same level of convenience and service as urbanites. The options are endless for creative thinkers who take their cue from pop culture.

Ben Bierman is the MD at Business Partners Limited.