Have you ever thought that you will not really have such a big impact on the economy if you open a small business? Think again. The impact of small and medium business in South Africa has gone unnoticed for too long. Small businesses – a field of possibilities.
It is estimated that small and medium business provides jobs for about 60% to 70% of working forces of the world. In South Africa, this percentage is estimated at only 21%, ranking sixth on the continent for small and medium business providing employment. It is safe to come to the conclusion that the small and medium sized business sector is far behind other countries in Africa and the entire world.
This gives entrepreneurs the ideal opportunity to better South Africa’s ranking. You should not be afraid to start small or think that your business will remain small. There are always opportunities for growth if you recognize and use them.
If there are more small and medium businesses formed in South Africa, the deduction can be made that the large percentage of unemployment will drastically decrease. This will also, in turn, have economic growth to effect. This will unleash the potential that our country holds.
It is a well known fact, that the rate of economic growth in South Africa is not what it needs to be. The current rate is not nearly enough to reduce the high rate of unemployment in South Africa. Small and medium business can turn this entire statement around. South Africa needs a program which accelerates the growth of the economy, achievable and sustainable. Small and medium business development can do all this. Small businesses – a field of possibilities
There are quite a few supporting structures that have been implemented in South Africa to promote the growth of small and medium businesses. The institutions that have been implemented by the government, includes the following:
- The Department of Small Business Development
- The Small Enterprise Development Agency
- The Independent Development Trust
- The Municipal Local Economic Development
These are some of the institutions that were formed to aid in the formation of most small to medium sized businesses. The government also placed a focus on developing entrepreneurial skills in previously disadvantaged women. This gave these women the tools to also form a part of the small and medium sized business sectors.
It is also believed that a lot of smaller businesses in South Africa are off the record. Some of these non-VAT business do not keep any records of their business or the people that they might have employed along the way. It is estimated that about 78% of all non-VAT business does not keep any records whatsoever.
A 2013 study done by Stats SA showed that 69,2% of non-VAT business was started because of the unemployment of the, now owner of a small business. The last two factors also point to an underlining problem that faces South Africa. A lack of skills under the people of South Africa can ruin any attempts that the government do to improve the state of the current economy.
The focus needs to be put on the education of potential entrepreneurs and equipping them with the needed skills to keep thorough records of their business and managing all the aspects of their own business effectively. It is only when this problem is addressed that there will be remarkable changes noticed in the economy of South Africa.