The Western Cape is the fastest growing province in South Africa for small and medium enterprises, while Gauteng has the most SMEs, new research shows.
Results from the 2015 National Small Business Survey, released by the National Small Business Chamber (NSBC), show continued resilience of SMEs despite the weak economy. The annual survey canvassed 18 500 small businesses throughout South Africa.
The bulk of small businesses operate in the manufacturing and business services market with 14% of respondents each, followed by IT and professional services at 12% and 11% respectively.
The 2015 survey found that 57% of small businesses cite a lack of funding and insufficient cash flow as the biggest obstacle preventing growth, closely followed by poor sales at 52%.
“Cash flow is of vital importance to the health of a small business. Enhanced efforts to encourage and promote best practice between government, larger organisations and their SME suppliers will go a long way in ensuring small business continues to play a role in growing the South African economy,” said NSBC CEO Mike Anderson.
“One of the more significant challenges facing small businesses is the inability to further develop a customer base in order to boost top-line growth,” he said.
Some 37% of respondents said that if their business were to receive a R100 000 cash injection, it would be used towards marketing efforts. Similarly, 43% of small businesses placed sales and marketing as a key area in which they require the most assistance, with business and strategic planning following with 30%.
Almost a third (32%) of respondents believe that failure to market their business has been their biggest mistake thus far.
Despite tough economic conditions, 78% of small businesses surveyed plan to hire more staff in the next year. This is despite many small businesses citing regulations that make it costly to fire poorly performing staff. — © 2015 NewsCentral Media
