4 Problems That Keep South African Small Business Owners Awake At Night

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4 Problems That Keep South African Small Business Owners Awake At Night


The 2007 Small and Medium Enterprise (SME) Survey reports that South African small business owners are not aggressively working to grow their market share and stay ahead of the competitors. Instead, they tend to place greater focus on operational matters of their companies.

Here are the 4 most worrying issues small business owners face, in order of importance:

  1. Crime

Arthur Goldstuck, principal researcher of the survey and MD of World Wide Worx says 27% of respondents cited crime as the most worrying factor. "This came as a surprise," he says.

  1. Cash flow

19% of the respondents worry about cash flow. "This is both the scourge and the beauty of the smaller business. If you don't worry about cash flow who will?" says Melt Van der Spuy, a director of business banking at Standard Bank, one of the largest banks in the country.

  1. Debtors

The issue of debtors, which is related to cash-flow, came next with 13% of respondents rating it as important.

  1. Competition

Competition was a lowly fourth-ranked, with only 12% of respondents deeply worried about what their rivals were up to. "When competition keeps you awake, you're concerned about market share. This doesn't seem to be a focus for South African entrepreneurs, and tends to be a bigger factor in the corporate environment," he says.

Where SMEs look for help

The survey also looked at places SMEs were most likely to go for help to deal with their most pressing concerns. The research found that:

  1. Accountants were the most favoured - The research found that 72% of the respondents turn to an accountant.
  2. The bank - 59% of respondents say they look to the bank for help.
  3. Legal advisors - Legal advisors were the third favoured providers of assistance and advice, with 53% saying of SMEs relying on legal advisors.
  4. Consultants - About 33% of respondents said they rely on consultants to provide the help they need.
  5. Mentors and Coaches- The survey found that only a small number of respondents (9%) use a mentor or coaching. However, 50% of those using these services regard themselves as highly competitive as compared to those who don't use mentors and coaching.

Why SMEs have some resistance to mentors


Van der Spuy says the accountant is a good choice for independent business advice. "While the business owner can turn to the bank for advice, the accountant is likely to have the clearest picture of that particular business, certainly from a financial point of view," he says.

He is also a firm believer in the value of such mentoring and coaching services. "A mentor can add the same value as a non-executive director does to a corporation, by providing independent advice and guidance.

However, mentoring is not well understood or trusted amongst small business owners, he says. In addition, the costs associated with finding the right coach can be a challenge for the owner, he adds.

The 2007 SME Survey, which is being run for the fifth year, was conducted by World Wide Worx, a local ICT research house. It was sponsored by banking giant Standard Bank and Fujitsu Siemens Computers.

More 5000 decision-makers from small and medium enterprises were surveyed this year. The survey aims to explore factors that impact on the competitiveness of South African SME.

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