EDITORIAL FEATURE
Doing Business
in South Africa
Ludmila (Mila) Rusakova Golovine
Similarly, as with most
cultures, the initial
business
contact should not
focus on the actual
deal. As stated previously, South Africans
like to do business
only with those that
they trust. Therefore,
it is necessary to be
patient and let the
conversation begin
with topics such as
family. This will allow
the South Africans
to get to know you.
Once trust is established, the actual
business venture may
be discussed.
A
s a continent, Africa may not be mentioned much in the media as a place to do
business but there is one country within
whose economy has maintained steady
growth in the face of tremendous political and
social change and that is South Africa. South Africa currently occupies the status of the second
largest economy in Africa behind only Nigeria.
It possesses 80 percent of the world’s platinum
reserves and 11 percent of its gold reserves. In
2011, South Africa formally joined the BRICS
group comprising the top emerging economies
in the world alongside Brazil, Russia, India, and
China. With its sound financial structures and
myriad of business opportunities, this country
is a very attractive place for entrepreneurs. Nevertheless, success can only be achieved by those
savvy enough to learn the proper business etiquette for this country.
It is important to note that South Africa is one
of the most culturally diverse countries on Earth.
In addition to the native black population which
comprises many tribes and makes up the majority
of the population, there are white South Africans
of English and Dutch descent. Moreover, successive waves of immigration over the years have led
to sizeable communities of Indians, Chinese, and
Malays. Thus, many refer to South Africa as the
“Rainbow Nation”.
Along with the cultural mosaic there is also a
linguistic one. The country currently has eleven
official languages, namely: Afrikaans, Ndebele,
Northern Sotho, Southern Sotho, Swazi, Tsonga,
Tswana, Venda, Xhosa, and Zulu. English is the
last official language and is used as the language
of administration. Therefore, it occupies a predominant position in the country’s communication. Importantly, business documentation does
not require translation into all of the official languages. English will suffice which will facilitate
written business dealings. For face-to-face communication, however, it will be necessary to find
out if an interpreter will be needed.
14 SMALL BUSINESS TODAY MAGAZINE [ AUGUST 2015 ]
As with most cultures, South Africans tend to
deal only with those that they know and trust.
They are somewhat mistrustful of those who are
unknown which can sometimes slow or even halt
a potential business venture. Very often, they
will only work with someone new if a trusted associate vouches for them. Consequently, when
trying to launch a new venture in South Africa,
it is imperative to find a local who can make the
necessary introductions and confirmations that
will allow the process to move forward. A formal
written introduction from a third party is also a
good idea if possible. This action will carry more
weight than word of mouth.
Similarly, as with most cultures, the initial business contact should not focus on the actual deal.
As stated previously, South Africans like to do
business only with those that they trust. Therefore, it is necessary to be patient and let the conversation begin with topics such as family. This
will allow the South Africans to get to know you.
Once trust is established, the actual business venture may be discussed.
While most countries have only one communication style, South Africa has two. Depending on
the ethnic group, both direct and indirect communication may be employed. White South Africans
prefer direct speaking. They tend to negotiate in
much the same way as Americans. Their business
culture is based on consensus and win-win negotiation. Any vagueness is considered non-commitment. Therefore, it is necessary to begin with
a realistic figure when negotiating pricing. As in
American business, white South Africans do not
like to haggle so it is imperative that flexibility be
shown. Furthermore, decisions are usually made
by consultation with subordinates.
Consequently, they are made somewhat slower than in the US. Here again, patience must be
maintained. Black South Africans, on the other
hand, are more diplomatic. They employ indirect