With the small business sector being such an crucial element of the economy as a whole, it was not surprising that the Government is vouching to do more for both new and growing businesses. With a large amount of small business support
already being provided in areas such as business planning
, business finance
, general business support, grants and business loans, more money will be provided to entrepreneurs. Small businesses of course benefit the economy hugely. From an employment perspective alone, the sector is the largest employer in the country by far.
But small business owners often say that they don't see the support being provided. Entrepreneurs around the country will tell you that they often feel isolated in dealing with their day to day challenges and it really here where the support needs to be focussed.
In a recent interview with Engineering news
, the Department of Trade and Industry (DTI) director-general Tshediso Matona
said at the launch that it was essentially a "no brainer" that small businesses had great potential to grow the country's economy and provide employment in the country.
Matona emphasised that the DTI planned to double its efforts in this sector, through policy strategies and institutional architecture.
"Incorporated in South Africa's new industrial policy initiative, government envisages that the SMME sector could create a further 2,5-million direct and indirect employment opportunities over the next ten years."
The survey indicated that black business owners made up 84% of the small business sector, and that 58% of the owners were female. However, women in general engaged in the lower end of the entrepreneurial field, mainly engaging in product reselling.
TNS research surveys client service director Rob Powell said that the difficult economic climate over the past two years had definitely instigated the start of more small businesses.
The survey indicated that 41% of businesses have started up over the last two-and-a-half years, and that over 40% started up their own businesses because they could not find a job in the formal sector or were unemployed. Further, 35% of respondents, mostly women, said that they would take up employment in the formal sector if they were offered the opportunity.
Powell said that it was evident that the SMME sector was still very uninformed and unaware of support structures available to small business owners.
He said that currently, 41,8% of business owners did not have any engagement in the formal or informal financial sector, and that people were generally credit and even insurance averse.
FinMark Trust CEO Maya Makanjee said that one of the greatest challenges in the SMME sector was to now "take it to the next step" and assist active players in expanding their skills sets and in accordance their business size and the number of employees that they were able to employ.
The survey indicated that out of the six-million small business owners, more than 60%, or around 3,8-million, of them did not employ any other people.
"The main gaps that exist in the SMME sector relate to education and skills, cash flow, record keeping and budget management, the emotional barriers relating to credit use, and leveraging existing access to cellphones and other infrastructural support, providing access to low-level insurance and product unbundling," said Powell.
The FinScope study showed that for 67% of respondents this were their only source of income, while others also received grants and support from government and other family members. FinMark Trust information and research specialist Trevor Kaseke noted that around 500 000 people could be taken off government support, if the relevant role players were able to assist these business owners in growing their businesses.
Matona agreed saying that the everpresent and dire challenge of unemployment in South Africa, could be tackled by targeting and developing entrepreneurship and providing the proper infrastructure for the development of the sector.
Currently, around 73% of small business owners work out of their homes and respondents of the survey had identified a lack of space and a lack of funding as stifling the growth of their businesses.
"The growth and support of the SMME sector remains at the apex of government's economic policies, and we also call on other actors in the economy to play their role in promoting this vital economic sector and fighting unemployment in the country," concluded Matona.
Entrepreneurs and small business owners alike will be hoping that this time round the support reaches their officer, suburbs and stores but it remains to be seen if it has any effect on their day to day business activities, turnovers and ability to be competitive.
Labels: business finance, business planning