There are various funding initiatives that are offered by the local government which are assisting in growing small businesses. 21% of SME’s reported receiving funding from government grants. 17% received funding from the Department of Trade and Industry. 16% of small companies were funded by the National Youth Development Agency.
Out of the SME’s that were funded by the private sector, 24% were funded by business incubators and 20% were funded by a bank. More can be done by the private sector to ensure that small businesses have equal access to the market.
Another challenge facing small business owners is the ability to find clients. With the world turning to digital platforms as a medium of communication, every business must have an online presence. If your business is not online, learn how to market your business online.
Internet infrastructure is another challenge that small business owners face. 50%of SME’s find that stable and reliable internet poses a challenge to their business. High data costs and a lack of suitable internet infrastructure is a hindrance to the growth of these businesses.
SME's are competing with huge corporations that have the ability to monopolize the market. The majority of small businesses generate R200 000 or less annually, while nearly half employ 2-5 employees. Only 20% of SME’s generate between R200 000 and R1 million, with 1% of these companies employing 21-50 employees. This shows speaks to the need to teach small business owners how to scale and the business.
Addressing the challenges faced by SME’s positions small businesses to be the drivers of the economy. It also benefits the South African population by decreasing unemployment and making the local economy attractive to foreign investment.
