The Sunday Mail
Africa Moyo in GWERU
NESTLED at the heart of Gweru City Centre is an enterprising small and medium enterprise (SME) whose operations are incomparable to any of its peers.
At face value, it would appear as if the business is struggling.
It is only after talking to the proprietor, Miss Kudzai Chikowore (30), that one gets a totally different picture of the business.
But it has not been easy.
Ms Chikowore assisting a customer
It is a business that has been built out of sheer resilience and perseverance.
While some might consider 500 pula, or US$44, to be a small amount, for Miss Chikowore it is the seed money that grew her business.
She started by importing an assortment of goods largely from Botswana and selling them from a bag.
A typical briefcase business
The idea began in 2007 and nocturnal trips to Botswana became the order of the day.
As the business exhibited signs of growth, she was to occupy a small corner in a hair salon and start trading her goods from there.
The tiny corner was to become profitable with time, resulting in the birth of two small corners in other hair salons.
Formalising the business
The organic growth of the business prompted the owner to formally register it in 2010 under the trade name Gatelect Marketing, a practice that is frowned on by most informal businesses.
The burden of complying is just too much for most local SMEs.
With three shops under its name in central Gweru, the company now trades as Kiki’s Gift Shop, Kiki’s Beauty Parlour and Boutique, and Sisters’ Beauty Parlour.
There are plans to open new branches in Zvishavane.
“I started this business in 2007 selling items such as clothes and perfumes from a bag. This is the time when things were tough and one could sell anything.
“I started the business with 500 pula and I would go to Botswana to purchase goods for resell. As the business grew, I started renting a small corner in a salon and in no time, I was using three corners in salons.
“The business later grew and I registered the company in 2010. My first big and nice shop was Kiki’s Gift Shop in Gweru and I later opened two others,” explained Miss Chikowore.
She sells an assortment of gifts and her other shops do facials, pedicure, massage, manicure and make-up.
It is one of the few business in Gweru that trades without fear of being stalked by the tax man.
The bane of formalising
But for Gatelect, formalising the business came with its own baggage, for the high cost of doing business is not only affecting foreign investors but local businesses as well.
So high has been the cost of doing business that many investors have in fact been put off.
However, what has been comforting to industry is the fact that a special team, led by officials from the Office of the President and Cabinet, is now taking a lead role in ensuring that the system is reformed and improved.
Miss Chikowore’s business is generally sustained by imports, most — if not all — of which are not locally manufactured.
But such imports are not considered a priority and the business is paying heavily, literally, for its products.
“When I import products, I declare them commercially at the border posts. But as SMEs, I feel Zimra should differentiate us from the established players such as large supermarket chains.
“For instance, when I import goods worth R20 000, I end up paying duty of about R8 000 and most of my profit ends up being taken up. These big shops just import in containers and may just pay for a few of the parcels, giving them the edge over us in terms of prices.
“We are supposed to compete with the big guys but their prices are already too low and we are forced out of business. Such duty charges result in SMEs abandoning their shops and flooding the streets where they don’t pay taxes,” said Miss Chikowore.
She says she now understands why SMEs opt to sell their wares from pavements and cars.
SMEs that don’t use brick and mortar shops do not have to put up with any statutory obligations.
“I try my best to settle my obligations with Zimra, you can just go and check my record. We don’t want to operate for free but we feel they should reduce the costs for young and growing companies.
“It seems as if registering a company is a crime in this country because the moment you do so, Zimra descends on you heavily. Those that comply are persecuted by Zimra more than those that operate illegally.
“This is pushing everyone on the streets. And it appears as if the more SMEs close shop, the more Zimra want those that remain to pay even more to compensate for those that have closed.
“I take care of the family from proceeds from the business following the death of my parents but at this rate I don’t think it is fair,” she said.
SMEs Minister Sithembiso Nyoni is on record imploring Zimra to use the carrot rather than the stick approach.
Government also insists that there is need for Zimra to craft packages that suit small businesses.
Apart from paying astronomical excise duty for imported goods, Miss Chikowore, who holds a marketing diploma, also does financial returns and payee as required by the law.
Although she used to hire professional accountants to do the financial returns, costs, which averaged $300 for the service, forced her to plead with Zimra to teach her to do it for herself.
Council charges too high
But Zimra is not Miss Chikowore’s only nightmare.
She also has to contend with the city council.
In Gweru, the local authority charge $649 to obtain a shop license.
The charge is universal, irrespective of the size of the business.
For one to apply for a shop licence, they need to have a tax clearance certificate from Zimra.
“The shop license is also very expensive. It goes for $649. The unfortunate part is that as SMEs, we pay the same amount as the bigger supermarkets.
“Because these companies are huge and enjoy economies of scale, they then reduce prices significantly and push us out of business. Council says you are all in business so just pay the same fees.
“This pushes us out of business. Such high costs of doing business are also forcing SMEs to flood the streets with the net result being that both Zimra and councils end up losing on revenue.
“Our laws are pretty tough on SMEs and favour the bigger companies. Due to the high costs of doing business, you can’t even re-stock and we end up failing to pay our salaries and rentals, among other things,” said Miss Chikowore.
Diversification
Miss Chikowore’s business has expanded to include handling Telecash payments for Zimpapers (1980) Limited’s newspapers and adverts in Gweru.
Vendors sell newspapers and at the end of the day, they cash-in the proceeds via Telecash through Gatelect Marketing.
Similarly, the vendors are also paid their weekly commissions through Telecash.
This revenue stream, which started in January this year, has boosted Miss Chikowore’s business.
Despite all her trials, the Gweru-based businesswoman still encourages budding entrepreneurs to venture into business, however small the capital they have might seem.
“I disagree with those that say ‘I don’t have money so I can’t venture into a business’.
“You don’t start big in business, all you need is to just work hard and avoid squandering your profits.
“That way you grow. One should also consult others when they run into problems, they will help you.”
