4 Problems That Keep South African Small Business Owners Awake At Night
4 Problems That Keep South African SmallBusiness Owners Awake At Night
The 2007 Small and Medium Enterprise (SME)Survey reports that South African small business owners are not aggressivelyworking 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 ofimportance:
1. Crime
Arthur Goldstuck, principal researcher ofthe survey and MD of World Wide Worx says 27% of respondents cited crime as themost worrying factor. "This came as a surprise," he says.
2. Cash flow
19% of the respondents worry about cashflow. "This is both the scourge and the beauty of the smaller business. Ifyou don't worry about cash flow who will?" says Melt Van der Spuy, adirector of business banking at Standard Bank, one of the largest banks in thecountry.
3. Debtors
The issue of debtors, which is related tocash-flow, came next with 13% of respondents rating it as important.
4. Competition
Competition was a lowly fourth-ranked, withonly 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 tobe a bigger factor in the corporate environment," he says.
Where SMEs look for help
The survey also looked at places SMEs weremost likely to go for help to deal with their most pressing concerns. Theresearch found that:
1. Accountants were the most favoured - Theresearch found that 72% of the respondents turn to an accountant.
2. The bank - 59% of respondents say theylook to the bank for help.
3. Legal advisors - Legal advisors were thethird favoured providers of assistance and advice, with 53% saying of SMEsrelying on legal advisors.
4. Consultants - About 33% of respondentssaid they rely on consultants to provide the help they need.
5. Mentors and Coaches- The survey foundthat only a small number of respondents (9%) use a mentor or coaching. However,50% of those using these services regard themselves as highly competitive ascompared to those who don't use mentors and coaching.
Why SMEs have some resistance to mentors
Van der Spuy says the accountant is a goodchoice for independent business advice."While the business owner can turn to the bank for advice, the accountantis likely to have the clearest picture of that particular business, certainlyfrom a financial point of view," he says.
He is also a firm believer in the value ofsuch mentoring and coaching services. "A mentor can add the same value asa non-executive director does to a corporation, by providing independent adviceand guidance.
However, mentoring is not well understoodor trusted amongst small business owners, he says. In addition, the costsassociated with finding the right coach can be a challenge for the owner, headds.
The 2007 SME Survey, which is being run forthe 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 andmedium enterprises were surveyed this year. The survey aims to explore factorsthat impact on the competitiveness of South African SME.
