Top 5 challenges for small businesses in South Africa

Half of small and medium-sized enterprises (SMEs) in South Africa are positive about the current state of their own business, according to a new survey.

Small businesses represent more than 90% of enterprises in all economies and also constitute a majority of a country’s employment virtually worldwide.

Facebook, the OECD and the World Bank have teamed up to create an online monthly survey of small businesses to understand their sentiment, activities, and challenges.

The Future of Business survey was first launched in 17 countries in February 2016 and it has expanded to currently include 33 countries. The survey is administered each month by German research company FactWorks.

The survey has now collected a set of data from SA businesses who have a presence on Facebook.

It found that 37% of SMEs are neutral about the state of their business right now, while 13% are negative.

Looking ahead, the survey found that the majority of local businesses are positive about their future outlook (73%), versus 5% which are negative.

The survey also underlined the top five challenges faced by businesses:

  • Attracting customers;
  • Maintaining profitability;
  • Increasing  revenue;
  • Uncertainty over economic conditions;
  • Securing financing  for expansion.

“The data shows that business confidence grew seven percentage points among South African SMEs in the wake of the local government elections in August 2016,” said Nunu Ntshingila, head of Africa for Facebook.

“In December, some 73% of South African respondents described the six-month outlook for the future as being positive and 47% said they were planning to hire more people in the next six months, this supports the importance of job creation in South Africa.

With small businesses being the backbone of our economy it is encouraging to see that 23% of SMEs in South Africa state they created jobs in the past 6 months and 47% that they expect to create jobs in the next 6 months.”

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