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
To learn more about this author, visit Rob Smorfitt's Website.
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Rob Smorfitt
(Visit Rob's Website)
Based in Pietermaritzburg, South Africa.
Married with 3 children (22, 21 and 14).
Have an MBA and am currently doing a PhD
in entrepreneurial success. I have been
self employed since 1982. I have started
26 and bought 5 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 in full time employment in my
bigger businesses. 6 books written in SME
and Project Management educational field.
Written articles for various magazines,
newspapers and websites.
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