|
|
Like this article? PLEASE +1 it! |  |
|
SME's - major external reason for failure
| Guest post by: Dr. Rob Smorfitt |
Article Overview: My auditors claim that South Africa has one of the worst payment cultures in the world
 |
Free Download - SMEs – SMEs struggling in South Africa. Why? By Dr. Rob Smorfitt |
SME's - major external reason for failure
SME's - major external reason for failure
In South Africa, the one external reason that contributes to most SME business failures is non payment by clients.
Corporate South Africa and government are the two worst offenders!! If you have budgeted the funds, you have the funds available, then why not pay on a 30 day basis at worst, or COD at best.
The government spends billions on development capital to create new businesses, then promptly destroys thousands of businesses through non or very slow payment.
Corporates complain that doing business with SME's is so difficult because they just cannot get their act together. Well how can you when you customers never pay you on time. No business can function without working capital, and for SME's it is often sitting in their customers' bank accounts.
The result is a knock on effect as the SME paid late is also the SME who pays late. This culture in South African business is not very conducive to building businesses.
Rob Smorfitt
SMEs - are African governments doing it right
SMEs - a changing trend in SME failure
What can business and governments do to promote SMEs?
Leverage Subject Matter Experts
Restricted Access to Finance
Article Tags: entrepreneur, entrepreneurship, nonpayment culture, SME, SME payment terms, SMME, Smorfitt
|
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  
 SMEs in Africa the skills challenge grows SMEs entrepreneurs with no skills SMEs entrepreneurship in a true democracy SMEs why compliance models work in Africa SMEs the future is bright |
Related Forum Posts
Re: How do you back up your computer?
- Seems like I saw a note on here somewhere that the system is to save info from one computer. The reason I ask is because I use the external hard drive to access files from either my desktop of laptop - it sounds like I couldn't do that with this service. Did I explain that really bad?
Shri
Why Franchises Fail
- Another reason franchises can fail is due to lack of effort on the franchisees part. If the franchisee does not give it their 110% and purely imitates rather than innovates they will increase their chance of failure.
Re: Alert to Forum!
- I heard there was some major problem that was discovered in IE... I dunno if thats the reason sites became vulnerable or not...
Re: 10 Reasons Who Startups Fail & Book Recommendations
- Great post. But there is a paramount reason why business star up fail that is not addressed here. Which is the fear of failure. Someone said the fear should not been seen as a monster, but should be seen as horse that you can tame and ride as you like.
Re: A great website is closing down
- Hmm..
Sad to see such hard work result in failure. Although we've all experienced and anticipate the potential for failure it's always unfortunate when a venture doesn't work out.
Hope they can catch the next one.
Phil
Share this article with your friends. Fund someone's dream.
Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
by: 
4 Building Blocks of an Effective Talent Management System
Simon Fuller Quotes
Lesson #3: “Tell ‘em quick and tell ‘em often”
Searching for the Stars: How Yang and Filo Took Their Business to New Heights
Salesperson Wimp-Out: I Need Help 
Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.