Government support is needed for small businesses still feeling the strain of poor cash flow, higher input costs, labour issues and a slowing economy.
This was one of the conclusions reached by the Nedbank Small Business Index, releasing its figures for the fourth quarter of 2013.
The Index reveals that small business cash flow remained fairly stable over the whole of last year, which mirrors that sentiment of a constrained economy.
Small businesses also faced higher input costs, with the contribution of input costs to overall operational costs rising from 43% in the third quarter to 48% in the fourth quarter.
In addition, 57% of business owners felt that labour conditions are unfavourable, with the current labour laws specifically posing the greatest constraint to their business.
Strike action has also continued to contribute significantly to reduced sales and production outputs, adding to the challenges that small businesses have to face.
Exacerbating the problem is the fact that both private sector and government support is still less than expected.
Support for small businesses from government fell from 2,4 out of 10 in the third quarter to 2,2 in the fourth quarter.
“From a government perspective, the areas in which small businesses would like to see improvement include a reduction of red tape, the amendment of black economic empowerment regulations and policies, a bigger contribution to the general improvement of the economy and better service delivery,” says Dennis Dykes, Nedbank Group chief economist.
