Small business deserves to be a bigger priority
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By: Morné Stoltz, MiWay Head of Business Insurance
According to a report by BANKSETA, small, medium and micro enterprises (SMEs) are estimated to provide employment to up to 60% of the South African labour force, yet the private sector has been slow to lend real support to struggling entrepreneurs.
Given the plentiful challenges SMEs face on a daily basis – among them rigid labour relations, excessive red tape and a shortage of resources to tackle the quantities of necessary paperwork – there remains little in the way of options for small businesses looking to improve operational efficiency as a means to further growth.
A recent report by Goldman Sachs suggests that an additional investment of R12 million by government and the private sector could boost the economy by as much as 5% - something that could account for a significant reversal of fortunes for a country currently weighed down by recent junk status downgrades and the onset of recession.
Yet, while investment in the traditional sense is undoubtedly a top priority, the fact remains that many emerging businesses simply don’t possess the necessary resources or business smarts to facilitate rapid growth, with many stumbling early on as a result of unforeseen legal issues, inability to obtain credit and BEE related concerns.
Simply put, small businesses in South Africa are starved of the resources required to operate an enterprise on any scale, with administrative tasks likely to consume a vast majority of billable hours. Between legal compliance, SARS documentation, bureaucratic red tape and staffing concerns, emerging enterprises are left with very little time to get on with what they actually do best.
And while corporate South Africa has for many years acknowledged the importance of this sector to the country’s economic well-being, it appears there’s little understanding of the issues currently facing entrepreneurs who are starved of time, resources and expertise rather than funding.
So what should the private sector be doing to drive the success of this sector? Here are a few of the key challenges that need to be addressed if the country’s SMEs are to realise their immense potential:
Paperwork can cause significant productivity backlogs for SMEs. By alleviating entrepreneurs of day-to-day administrative duties, the private sector could go a long way towards driving productivity in the sector.
For any start-up, expenses can quickly start to accumulate, particularly when strong supplier networks are not yet in place. By offering assistance in procuring more reasonably priced goods – be they corporate vehicles, stationery or office furniture – corporate South Africa could more effectively mitigate cashflow concerns, tapping into available supply chains so as to tackle this critical business imperative.
This is a key area in which numerous inexperienced enterprises get stuck, either due to a limited understanding of requirements, or simply thanks to it being assigned to the bottom of an ever-growing to-do list. As such, it’s important that business owners have access to readily available compliance assistance and advice – not only to alleviate backlog, but also to ensure they don’t run into unforeseen legal troubles.
Significant problems can arise in the event of a staffing dispute, as smaller enterprises seldom have the means or know-how to deal with such issues, which can prove costly – and in some cases, fatal – for emerging businesses.
MiWay is an Authorised Financial Services Provider (Licence no: 33970)
Date Posted: 2017-09-07
Posted By: MiWay Insurance Limited
Listed under these Business Listing Categories: Financial services,
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