Are services the key to growth?


IT’S that time of the year when we are planning the ILO Month of the Woman Entrepreneur due to be celebrated in August.  A small group of us ended up talking about the services sector and how most enterprise development initiatives focus on tangible goods only.

The most talked about business ideas involve the manufacture of goods and I am convinced a focus on services could be beneficial for the following reasons.

Low capital requirement — Services is one of those industries with relatively low barriers to entry because one normally starts off with intellectual capital.

There is also the opportunity of differentiating products just by focusing on one’s unique characteristics.

In some cases a laptop is all that is required to start a small business.

With the change in business regulations now allowing entrepreneurs in certain categories to work from home, the costs of running such a business are even lower.

One may argue that without an office it’s difficult to receive payments but with the spread of internet banking clients can make payments direct into the business’ bank account.

Internet banking saves telephone and transport costs involved in checking if the cheque is ready, going to collect it or going to the banking hall to get statements now and again.

Opportunities — There are many unexplored opportunities in the services sector. Take for example the provision of services to the small business owner.

It’s well documented that small business people are pressed for time and sometimes it’s not cost effective for them to hire people to do all the things required.

This is because the services are only required on a part-time and not full-time basis.

While it’s common to engage accounting and legal services as and when required, it’s not easy to find a company that can offer sales and marketing services.

And I mean at a rate affordable to small businesses. Affordable websites is another area. I have seen some exorbitant quotations for websites and yet one can get a basic website for free on sites such as and  For small additional amounts websites can be custom designed and hosted with the chosen domain.

One company that continues to meet the requirements of the small business is and their home page allows anyone to test their proposed name on the different domains, howing availability.  Their prices are very low but the secret to their success is high volumes.

And these are all services rendered without actually meeting the customer.

In South Africa there are companies that provide secretarial services to small businesses. All phone calls to the business are routed to this service provider and calls are answered professionally at their call centre.

The entrepreneur is able to get all the messages throughout the day if they are not available to take the call.

Some even offer well equipped meeting rooms which can be used as and when required. This concept would work in Maseru since many people are working from home.

Job creation — I can understand the bias towards manufacturing as this is an industry which is seen to create jobs. I am of the view that services create jobs downstream.

By outsourcing things such as graphic design, accounting, marketing and business plans, a services business creates jobs indirectly.

Take a look at and you will see the power of freelance services. Elance offers thousands of companies access to professionals who offer their services on projects and jobs posted on the website.  Payments to the service provider are made through the website.

Exports — When development of products for export is being encouraged, rarely if ever are services mentioned.

International consultants are a good example of professionals who have developed and marketed themselves across borders.

Motivational speakers, trainers and coaches are now offering their services through webinars and teleseminars, enabling anyone in the world with a telephone or internet connection to join in. They have realised that people don’t have to meet face to face to do business.

A couple of years ago someone asked an American workshop facilitator: “What exactly drives the United States economy, how do you generate money?” His answer was “services.”


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