Ambitions for SMMEs in SA

Many entrepreneurs in SA can be forgiven for wondering if the slog is worth it.

Research released earlier this year revealed that there are only 250 000 formal SMMEs in South Africa. Entrepreneurs who have started up a business over the past 10 years have done so in an environment largely negative, with slow economic growth and an unstable political landscape.

“So, all in all, a very difficult setting to launch, grow or even maintain a business,” says Bizmod MD, Anne-Marie Pretorius.

Pretorius says that many entrepreneurs who operate in SA can be forgiven for often wondering if the slog is worth it.

Yet they continue, despite economic uncertainty, strikes, retrenchments and downscaling.

“It is this tenacity that sets entrepreneurs apart, and I often wonder how much more successful they would be in an easier and more supportive environment.” Greater policy certainty on all key government policies from land reform to regulations surrounding labour broking.

Being able to do away with bad policy faster.

An example of where this did not happen was in the changes of visa requirements; leading to an unnecessary dent in our tourism industry, an industry that should be targeted for growth.

Lower compliance requirements for companies with a turnover under R50 million.

The cost of compliance for smaller enterprises is significantly higher in comparison to their income and available cash.

Smaller companies need simpler frameworks where compliance is required.

A portal similar to Sars e-filing, which makes compliance across various pieces of legislation clear and simple, would be ideal.

The Labour Relations Act is a key piece of legislation that has done a lot to protect the rights of the employee. It has attempted to balance the power relationship between employee and employer.

Some innovation is, however, required in labour practices, allowing for mutually beneficial flexible working relationships. Buy small, buy South African! A framework whereby large corporations and government would have to allocate a certain minimum percentage to buying from smaller local companies.

There are encouraging signs that this is happening more, however this is still not an ingrained practice. In addition, consumers should be more informed on what items are South African produced.

Easier access to funds enabling entrepreneurs to grow their businesses. There are currently a few options available, but all of the options require significant governance and red tape.

Make good financial governance aspirational, attractive and easily accessible.

The process for tenders to be corruption free and fair, enabling more companies to add value.

Pay SMMEs in 30 days or less. Enormous pressure exists on smaller companies when not paid on time.