Small business development will be the key to SA overcoming its chronic unemployment problem. Sustained growth is a prerequisite. We need to see dramatic improvements to the education system The containment of administered costs and a significant reduction in red tape is also needed.
This is especially important where small and microenterprises are concerned — these start off as suppliers to established businesses. Wwhen big businesses grind to a halt or realise losses, hundreds of small businesses are put at risk along with employees’ futures.
Labour legislation
Labour legislation in South Africa relating to hiring, bargaining, remuneration and the procedure of dismissing employees is cumbersome. Particularly to small business where the owner has to do everything. The spiralling labour costs is also a threat to building a stable economy, which forces small businesses to downsize – destroying jobs instead of creating jobs.
We are facing increasing unemployment. Our high inflation rate, high fuel prices, high consumer indebtedness and rising interest rates over recent times is hurting everyone.
SMEs are in for tough times.
Maximise opportunities
SMEs need to attract clients who are going to afford what SMEs sell. They should go back to basics by being diligent in procuring new opportunities in the market. They need to manage their cash flow to insulate themselves from external economic headwinds. This involves managing the debt of the business, however small it is.
Furthermore, SMEs need to be niche players, as they cannot compete with big players. Find a niche which is not possible for large businesses to pursue. SMEs are agile and small and can focus on making a success of opportunities. Entrepreneurs usually see challenges instead of problems and solve them.