Tag Archive: BizindexZA


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

DOWNLOAD THE FULL PDF REPORT: Sage Business Index Report 26 September 2011
(2.3MB – please be patient whilst this PDF document loads in a new tab once you have clicked the link)

Click here to view full sized Infographic

Sage Business Index South Africa Infographic.jpeg

DOWNLOAD THE FULL PDF REPORT: Sage Business Index Report 26 September 2011
(2.3MB – please be patient whilst this PDF document loads in a new tab once you have clicked the link)

Sage global survey amongst small and mid-sized businesses reveals drop in global economic confidence but business performance holding steady

Businesses say amidst economic uncertainty, lack of government support and rising costs they remain determined to invest for future growth

26th September, 2011–Softline, part of the Sage Group PLC, today released the results of The Sage Business Index – Local and International Business Insights. Polling over 10,000 businesses across Europe, North America, South Africa and Asia, the research shows that whilst there is a general decline in confidence in global and local economies, businesses remain cautiously optimistic in their own growth prospects.

The research, which included 2,026 South African small to medium size businesses, was carried out by Populus, a UK based opinion and research consultancy firm. The global survey results revealed that business performance held steady or improved over the past six months and that despite economic challenges ahead, businesses are looking to invest for growth in the next six months. Businesses are also calling on their governments to provide more support by reducing the red tape which they say is stifling both their growth and a general economic improvement.

Economic confidence – overall decline with some positive signs at country level

Across the board, businesses said that compared to six months ago, the global economy was in decline with the average index score declining 15% to 44.47. In respect of their local economies, business confidence was higher with an index score of 47.11; however this is a sharp decline from the 57.17 previously scored.

South African businesses rated their own business prospects positively at 62.58. This is in sharp contrast with their index scores for the South African and the global economy which were much lower at 44.10 and 45.92 respectively.

Commenting at the official results presentation in Johannesburg today, Ivan Epstein, CEO (and co-founder )of Softline and Sage AAMEA (Asia, Australia, Middle East and Africa) said, “Looking at the results against an international backdrop, South Africa scored the second highest index rating of all the countries polled in terms of individual business confidence. Entrepreneurial spirit and business culture was identified by businesses as one of the most important aspects for doing business successfully in South Africa. This endorses my strong belief that South Africa is a breeding ground for successful entrepreneurs and small businesses.”

Business performance and challenges – revenues maintained, cost challenges

In terms of international business performance there was some positive news with over two thirds of businesses surveyed showing either steady or improving revenues over the past six months. Only 12 percent of businesses said they were forced to reduce their number of employees.

In South Africa, 75 percent of businesses polled showed either steady or increasing revenue. Employee numbers remained consistent with 50 percent of businesses reporting that they had not increased employee numbers over the period.

The biggest challenges identified in the survey of the past six months were the rising cost of energy, fuel and raw materials (53percent); winning new customers or accessing new markets (47 percent); maintaining or growing revenue (41 percent); and managing cash flow (37 percent). South African businesses cited similar challenges with political instability emphasised as a further concern.

Future plans – invest to grow

In terms of investment priorities looking forward, 41 percent of South African businesses intend to invest in sales and marketing 37 percent will consider diversifying into new markets and 32 percent will invest further in training and/or the launching of innovative products and services.

The role of 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.

“We want to represent an honest picture of the realities facing businesses every day and most importantly define how Softline, Sage, governments and industry can further support small and medium sized businesses in both South Africa and around the world,” concluded Epstein.