Self-employment an option for unemployed youth

With the current unemployment rate at an all-time high of 32.9%, self-employment and starting a small business are an option for unemployed young people. But starting your own business is not easy and requires careful planning, determination and a clear vision.

Data from the Global Entrepreneurship Monitor also shows total early stage entrepreneurship activity among people between the ages of 18 and 24 increased from 3.4% in 2002 to 19.3% in 2021 and for those between the ages of 25 and 34, from 5.3% in 2001 to 19% in 2021.

However, for eager young entrepreneurs in South Africa, the journey to self-employment can be both challenging and rewarding. Is there a secret recipe for success?

Adam Young, owner and director of ROWDY Bags is a young entrepreneur who quickly identified a niche in the market. His small business, created on the steps of UCT in 2012, became an award-winning, internationally acclaimed leather goods brand.

“We are a young business made up of young people who are passionate about the slow fashion movement. Our vision was simple, beautiful designs that speak to a more sustainable future in fashion and it has taken us from one person with a dream to about 20 employees currently,” Young says.

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“A huge turning point in our business was the pandemic. At the time about 95% of our business was direct to customers and when sales halted during lockdown, we made the decision to pivot our business to manufacture cotton face masks,” Young says.

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Aiming for the international market

Throughout this time, the founders of ROWDY Bags always set their sights set on taking the business internationally. Some of the relationships they developed came to fruition in 2020 and that foresight enabled them to recover sales lost during the pandemic in new wholesale business abroad.

With a decade of experience in the bag, together with surviving a global pandemic, ROWDY evolved to make a refined range of practically designed, quality leather bags and accessories while empowering and honing the skills of talented artisans who make each piece by hand.

Colin Timmis, country manager of Xero South Africa, a global small business platform, believes that a strong network and a well-crafted business plan, coupled with a positive attitude towards digital adoption and core business skills, such as financial literacy, are significant factors in the success of self-employment.

“Young entrepreneurs and small business owners are often already digital natives and lead the way when it comes to embedding technology at an early stage and innovating to do things differently. It is great to see so many businesses setting an example for those thinking of self-employment.”

He says understanding the importance of digital tools and embedding them from the start will put young entrepreneurs in a strong position to create efficiencies and boost profitability.

Access to funding and support can also be a huge hurdle for young entrepreneurs, but the good news is that financial advisors and accountants can help guide you so that you can benefit from the different funding opportunities available and the compliance that comes with applying for it.

In fact, according to Xero’s 2023 State of Small Business Report, the two most significant factors that helped small businesses survive and grow in the past year were technology (41%) and their accountants (28%).

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Unemployed youth must get professional advice

“Professional advice can unlock resources to access funding, mentorship and training programmes aimed at youth that can propel businesses forward. Our research found that 60% of small businesses believe accountants are key to economic growth. Almost half (49%) go to their accountants for business advice and guidance in self-employment,” Timmis says.

“We know that small business owners and entrepreneurs have so many great ideas to grow and innovate, but funding to do this is often the hurdle. That is why we launched a Beautiful Business Fund to help support small businesses in key areas such as tech innovation, sustainability, skills and supporting their communities.”

Timmis says starting a business as a young entrepreneur in South Africa offers immense opportunities for growth and impact. “Despite the unique challenges of the local market, adaptability and resilience are key traits that will help the youth overcome obstacles and thrive in the dynamic landscape.”

For many years, small businesses served as the backbone of the South African economy, creating jobs that help families and communities put food on the table and stimulate broader socioeconomic growth. They remain the most likely vehicle to tackle the country’s rising levels of youth unemployment, poverty and inequality, he says.