Minister of Small Business Development, Lindiwe Zulu, has published a new government gazette amending the definitions of micro, small and medium enterprises in South Africa.
The gazette states that the new turnover threshold values have been established to account for inflation since they were last revised in 2003.
The new schedule also defines small enterprise using two proxies – ‘total full -time equivalent of paid employees’ and ‘total annual turnover’ – removing the third proxy of ‘total gross asset value’ which was previously considered when establishing the size of South African businesses.
The final change is the collapsing of `very small enterprise’ into the ‘micro enterprise’ category.
This is because many users found this size or class category unhelpful and inconsistent with international practice, the gazette states.
Help for small businesses
In his February state of the nation address, president Cyril Ramaphosa announced that government will focus on significantly expanding the small business incubation programme in 2019.
The incubation programme provides budding entrepreneurs with physical space, infrastructure and shared services, access to specialised knowledge, market linkages, training in the use of new technologies and access to finance.
“The incubation programme currently consists of a network of 51 technology business incubators, 10 enterprise supplier development incubators and 14 rapid youth incubators,”he said.
“As part of the expansion of this programme, township digital hubs will be established, initially in four provinces, with more to follow.”
The president said it was expected that the hubs will provide most-needed entrepreneurial service to small and medium enterprises in the rural areas and townships – but more especially to young people who want to start their businesses.