Vital for economic growth but facing serious challenges, South African small and micro businesses are displaying unwavering entrepreneurial spirit, according to new research commissioned by Regus.
Even though some might have fallen into business ownership through redundancy, a staggering 88% of South African entrepreneurs reported that given the chance they would do it all over again – more than the global average of 85%.
This latest Regus research, canvassing over 26 000 business managers and owners in 90 countries, confirms that nimble and flexible South African entrepreneurs regard red tape (82%) as the biggest deterrent to setting up a business today.
Difficulties accessing credit (81%) and lack of government support (73%) followed. More than half of South African entrepreneurs also cited the state of the economy and market domination by large corporations as serious hindrances.
Regus area director Kirsten Morgendaal comments: “Thank goodness for the unstoppable entrepreneur. Who knows what state the economy would be in if they decided to play safe and downsize like a lot of their larger and arguably better resourced competitors.
“The challenges they face are not new, but they are clearly saying that little impact has been felt from state support initiatives, despite the best efforts of government.”
Betty Mafura-Shoko, MD of international recruitment agency Prime Time Solutions, says: “I agree: official mechanisms have not done anything much for my business. But if you want to be a successful entrepreneur, you soon find that nothing comes easily. It’s a white knuckle ride and you have to have nerves of steel.
“That’s why it’s usually the entrepreneurial community that generates growth out of an economic downturn, while the big boys run for cover.
“I just don’t understand why government doesn’t recognise this and change its focus to more evenly pay attention to SMEs. We generate around half the nation’s wealth, but we get a tiny fraction of state attention. Nevertheless, running my own business was the best decision I ever made and I’d do it over again any day.”
SMEs are “engines of growth” accounting for up to 99% of businesses and 40% to 50% of GDP. In South Africa, in particular, they account for 99% of firms. Globally, 50% of all jobs are generated by SMEs, and yet they attract just a tiny proportion of overall investment across the G20.
Kirsten adds: “Entrepreneurial firms will need to remain nimble to navigate choppy waters and succeed. The lack of institutional support means that business owners will continue to increasingly favour flexible working in order to avoid lengthy leases and free up their working capital so they can concentrate on growing their business.
“Already globally, more than half of entrepreneurs are using flexible working locations for most of the week, compared with 39% for those that do not own their businesses.”
South African entrepreneurs list their top challenges as lack of access to credit; red tape; lack of government support; current market conditions; and market domination by large corporations.
