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SMEs - a South African perspective on SME start up and growth
| Guest post by: Dr. Rob Smorfitt |
Article Overview: How does the South African government plan its interventions to increase the start up and growth rate of SME's
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Free Download - SMEs – SMEs struggling in South Africa. Why? By Dr. Rob Smorfitt |
SMEs - a South African perspective on SME start up and growth
A major problem that exists in South Africa, is simply that no one knows how many SME's exist! Current estimates vary from 1.2 million to 3 million. The margin of variance is too vast to make any meaningful contribution to the debate regarding SME development in South Africa.
Legislation that forces the use of incorporated entities such as closed corporations, cooperatives and various forms of companies, when tendering for government business, has seen a massive increase in the number of legal business entities registered. This has skewed the data massively, and therefore no true assessment of the growth in the SME establishment rate can be made.
The problem is further skewed by the fact that no one tracks the establishment of sole proprietors and partnerships, and often partnerships such as law practices often make use of legal entities for the trading component of their partnership. This leads to increased duplicate numbers of businesses being counted if at all.
Previously all businesses had to be registered with their local municipality. This has largely fallen away and is longer a requirement in most towns and cities. As a result overtrading is common in many towns. Examples include IT suppliers, tyre fitment and signwriting businesses.
It is imperative that a database of SME's in South Africa be established which is accurate, so that interventions and their impact can be correctly assessed. Only once we have established a means to evaluate our interventions can we measure their success and change them if necessary to be meaningful. Like any good business, market research and intelligence is critical in our decision making.
It would also help in establishing sustainable businesses, by providing guidance to businesses to reduce overtrading.
Rob Smorfitt
SMEs - my PhD topic and African context
SMEs - opportunities in Africa
SMEs - surviving the recession in Africa
Facts about SMEs in Africa
SMEs – SMEs struggling in South Africa. Why?
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About the Author: Dr. Rob Smorfitt RSS for Dr. Rob's articles - Visit Dr. Rob's website Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
Click here to visit Dr. Rob's website  
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Re: In-House or Outsource?
- Unfortunately, in the South African context, very few SMEs see outsourcing as an option. They believe it is too expensive, and they are paranoid that someone will "steal their ideas".
I believe that the three main functions that cannot be outsourced are marketing, sales and strategy. These must be done in house I believe. If you do not have the marketing skills then get them. Hire a consultant or attend a course, but get the skills. Even if you use a consultant, you need to understand what marketing is about, as no one knows your market like you do. Marketing is made to seem difficult and complex, but everyone who really understands their markets, can easily learn to do their own marketing.
In South Africa, labour legislation is extremely inflexibile, and consequently labour broking is a large industry. This is an ideal starting point for SMEs in South Africa, as it is a legally complex area, whih comes with severe penalties.
I say do it!
Rob Smorfitt
Re: How will an african make money truely on the net?
- [quote="MichelleJ":2a9hm5bq]Hi Topeyinka
I am just wondering, with Paypal as long as they can get your credit card verification
I don't think that they worry if you are an African or not. I also live in South Africa and
there was no problem getting verified with them once they had checked my credit card
details that proved the card belonged to me.
Michellej[/quote:2a9hm5bq]
Hi Michelle,
You can use paypal to send money and buy as a South African, but you are limited to receive payment. So what is the use of spending money without making it. You cannot accept payment with your paypal.
Any way South Africans can make use of 2CO to recieve payment on theie websites.
Re: Newbie from Africa
- [quote="MichelleJ":1mn7d7fx]Hello Biiyke
Welcome to the forum. Which part of Africa are you from it is quite a big continent? I live in South Africa.
MichelleJ[/quote:1mn7d7fx]Hello MichelleJ,Nice to hear from you.I live in Nigeria.I am also trying to reach the South African market because I know You guys have a lot of unique stuff to show the world!
Re: Hello from South Africa
- Thanks Topeyinka
Nice to see yet another South African here!
Cheers for now
Cyn
[quote="topeyinka":3dokkoo1][quote="CynthiaMinnaar":3dokkoo1]Hi Everyone
My name is Cynthia Minnaar and I run my own online business full-time from my home in Pietermaritzburg, South Africa.
Although I have been submitting articles to Evan Carmichael for quite a while now, it has taken me far too long to finally join the forum! However, I am pleased to finally be here and look forward to learning and contributing.
Great to see familiar faces in the Moderator panel - Hi Carol, David & GT.
Cheers for now
Cyn[/quote:3dokkoo1]
Hi Cyn,
You welcome to the forum. You will always find this forum educative and interactive.
I am also in South Africa, I stay in Pretoria.
You are in the right forum for a new life lift.
Cheers![/quote:3dokkoo1]
Re: How will an african make money truely on the net?
- Hi
From what I understood, if you are verified with Paypal, you can receive payments
into your Paypal account and withdraw money in this country if you get their debit
card. I will make further enquiries as there must be a way, there are many South Africans
doing business on the internet. I know that other African countries such as Nigeria are
unable to use Paypal etc. but don't think it applies to us here.
MichelleJ
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