Small businesses in South Africa have unlimited potential for job creation and growth, as well as social upliftment and development, as small and medium-sized enterprises (SMEs) provide approximately 60% of all employment opportunities in the country.
As policy makers, business people and civil society must put in place measures to work towards economic recovery and small business entrepreneurship should be at the center of public discourse as one of the main opportunities to solve South Africa’s most pressing economic and social challenges, says David Morobe, Executive Managing Director for Impact Investing at Business Partners Limited.
He says that after seeing small business confidence decline steadily as SMEs struggled to weather the challenges of the pandemic years, a recent SME Confidence Index from Business Partners Limited found that was changing.
“We are encouraged that small businesses have confidence levels of 77% that current economic conditions are conducive to business growth and this is the highest in a decade. It is a positive sign that the sector is finding its feet again after two years of instability and it is particularly relevant now with job creation, given the unemployment crisis in the country.
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Financiers must continue to support SMEs for job creation
A report by Finfind in partnership with the South African SME Fund puts the total number of SMEs in the country at around 3 million, including the informal and formal sectors. According to the report, the average number of employees per SME ranges between 12 and 27, with most full-time positions offered by medium-sized companies with an average annual turnover of R10 million.
For Morobe, creating the number of jobs needed to reduce the unemployment rate is an ambitious task, but one that can be achieved through unwavering collaboration between the public and private sectors, as well as other actors who support South African entrepreneurs. . .
“Fortunately, industry trends locally and abroad are broadening the landscape of opportunity and giving entrepreneurs a chance to explore uncharted business territory. As financiers, we must continue to provide the necessary support to SMEs to facilitate their growth and sustainability.
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Cloud technology can revolutionize the small business sector
The increasing development and application of technologies, such as cloud computing, have the potential to revolutionize the industry. According to the 2022 State of South Africa’s Small Business report by accounting technology firm Xero, half of businesses are now using cloud technology, with 30% saying it has allowed them to expand their customer base and 28 % saying cloud technology has made a direct impact on the efficiency of their business operations.
Cloud technology offers SMBs reach and huge potential for growth, says Morobe. “SMBs will continue to grow as new and emerging entrepreneurs embrace the trend of remote working and the digital nomad approach to work. Cloud technology dramatically lowers the cost of doing business, which could free up capital for human resources, innovation, and other business avenues.
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The rise of social entrepreneurship, job creation
The worlds of business and social activism are merging globally to form the basis of a whole new class of entrepreneurship, one that values profitability in the same way that it prioritizes aspects such as community development. , social justice and charitable purposes.
“Social entrepreneurship is growing rapidly in South Africa and we have seen exemplary organizations develop around issues such as education, access to public services, environmental conservation and climate change.”
The rise of social entrepreneurship also presents a range of opportunities, Morobe says. “Conceptually, entrepreneurship can be summed up as problem solving and in South Africa, with its fair share of unique socio-economic challenges, these problems are opportunities in disguise for entrepreneurs.”
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Emerging trends in customer experience
Another trend driving innovation in the industry is the evolution of customer experience (CX). Given the rate of fierce competition in the market, SMBs are increasingly using the optimized customer service experience as a point of differentiation and the basis of their value proposition.
“Some of the most significant developments in customer experience are the use of chatbots, personalization, omnichannel customer engagement, data management and security. As customer experience evolves in South Africa, More job opportunities will arise for customer experience professionals at all levels, from call centers and customer service agents to community managers and product support managers.
According to Morobe, as the main driver of these trends, technology will continue to provide entrepreneurs with the opportunities they need to develop successful businesses in new and unexplored sectors, as well as innovative ways to succeed in existing sectors and stimulants.
“Coupled with the government’s desire to increase infrastructure development, attract foreign investment and promote training programmes, the SME sector can help create jobs for millions of South Africans.