Archive for October, 2011

The Gauteng Economic Development MEC Qedani Mahlangu said in a News24 article last Monday that the government had put in place plans that would support the Small and Medium Enterprises in the province with the aim of growing the economy and creating jobs:

“In one such initiative … 100 000 young men and women entrepreneurs will be trained and assisted financially so that they can employ three and five people each to create one million jobs.”

Are these initiatives what the South African small business entrepreneurs asking for? Local SMME Business Owners responded to a question in the Sage Business Index around what they felt were the most important things Government can do to assist businesses as follows:

Skills development and education 48%
Reduce business bureaucracy and legislation 40%
Reduce business tax 37%

These priorities are potentially stemming from the sentiments of South African SMME business owners that government bureaucracy remains a hindrance. Businesses are in agreement with the factors that restrict them – irrespective of country the least favourable aspect of doing business is government bureaucracy and legislation, followed by governments handling of economic challenges.

Over half (53 percent) of South African businesses polled say that government bureaucracy and legislation is one of the least favourable aspects of doing business. When probed further, 62 percent of businesses stated employee and labour law whilst 48 percent said procurement and tender procedures for public sector contracts were the most cumbersome aspects. Smaller businesses further cited a lack of sufficient support and advice.

Money matters ranked highly amongst South African SMME’s, with 43 percent of smaller businesses (two to twenty four employees) declaring that they experience trouble managing cashflow, and that a lack of funding or access to capital is problematic (28% of one person businesses compared to 10% of 500+ employee businesses).

It will be interesting to see whether the measures which MEC Mahlangu has made mention of to support entrepreneurship and aid job creation tactics in South Africa will have a positive effect on the sentiments of the SMME business owners and entrepreneurs in next year’s Sage Business Index, in comparison to the results currently on hand (conducted during July & August 2011).


What are the least favourable aspects about South Africa as a place to do business?

Ivan Epstein CEO (and co-founder) of Softline and Sage AAMEA (Asia, Australia, Middle East and Africa) shares some of his insights into the results of the Sage Business Index, which has been conducted for the first time in South Africa to provide unique insights into the South African SMME business landscape for start-up’s, small businesses, medium enterprises and entrepreneurs.

Ivan Epstein

Ivan Epstein

Here are some interesting snippets:

“It is apparent from the research that South African small to mid-sized businesses are more confident about their own businesses prospects than the prospects for the South African or the global economy.”

“Given the economic conditions in which South African businesses are operating, it is encouraging to see positive elements coming out of this research. Small businesses are less concerned by macro factors such as the global economy and are more focussed on getting on with business. For them it is about making their businesses work.”

“Even amidst a tougher economic climate, businesses are recognising the continued importance of investment into their businesses as this will continue to drive the growth and success of SME’s.”

Read more about the Sage Business Index and find more resources, reports and results:

Sage Business Index: Overview of Results Launched

Sage Business Index: South Africa Infographic