The biggest challenges businesses in South Africa are facing right now

Yoco, a provider of payments and mobile point of sale, has released its inaugural small business survey: The Small Business Pulse, to provide small businesses with insights into their current environment.

Survey responses were received from 3,621 small businesses in Yoco’s database of over 28,000 micro, small and medium-sized businesses countrywide.

The report found that the current technical recession has created a challenging business environment. Despite this, small business operators remain positive about the potential for their businesses to grow and become more profitable, as well as their ability to employ more staff.

Despite the confidence regarding their own prospects, small business owners do echo some concerns held by larger businesses regarding South Africa’s general business environment.

More than half of small business operators surveyed stated that their businesses are performing better now than they were 12 months ago, while 83% of respondents expect their business to grow in the next 12 months, and 78% of small business owners expect to see more profit during this period.

The report found that 37% also expect to grow their staff in the year ahead.

An analysis of Yoco’s internal data reveals that the average value of transactions per merchant has increased by 6.1% in Quarter 3 2018 relative to the same period last year.

In terms of challenges faced by SMBs, the survey found:

  • Over half (51%) of the respondents noted that the biggest business challenge they face is the poor state of the economy.
  • One-third cited political instability as a key obstacle.
  • Concerns around inflation (29%), currency fluctuations (26%) and tax rates (21%) are further challenges that the prevailing economy presents to business owners.
  • 40% of respondents cite cash flow as a barrier to business success.
  • 22% state that lack of access to finance is a concern. The limitations in accessing finance are of particular importance to those who have operated for less than 4 years.

Access to finance is generally considered to be a barrier for business operators, with only 17% stating that it’s easy to source finance for their business.

Access to finance was declined to 42% were declined because they hadn’t been operating long enough, the report said.

Read: How many jobs are created by small businesses in South Africa

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The biggest challenges businesses in South Africa are facing right now