Johannesburg - Wednesday, 8 May, will see South Africans make their way to the polls to vote in the 2019 general elections.
Uppermost on many people's minds will be hope that the X they put next to the party of their choice, will bring some respite from the stranglehold of unemployment and financial pressure that has held many hostage, especially in the SMME sector.
StatSA's report in December 2018 that South Africa was out of the technical recession following a 2.2% growth came as welcome news, giving hope that the country's sluggish economy is finally starting to show signs of life.
At this year’s State of the Nation address, President Cyril Ramaphosa singled out the Small and Medium Enterprise (SME) sector as key in stimulating economic activity, creating employment and advancing broad-based empowerment in South Africa, effectively reiterating the government’s National Development Plan’s goal of creating 90% of jobs by 2030 through small businesses.
While the growth rate of 5.4% that will be necessary to cut unemployment is attainable, StatSA reports that "the technical recession in the first half of the year was a rude awakening that South Africa would not automatically ricochet without deeper structural change that would set the country on a new growth path that would be able to overcome high levels of unemployment (which is currently at 27.5%), poverty and inequality".
Therefore, strong and decisive leadership, along with innovative thinking, become crucial.
It's been firmly established that the SME/SMME sectors plays a crucial role in the South African economy in terms of overcoming unemployment, creating economic participation and transforming an unequal society. And while catch phrases like “inclusive growth” and “economic drivers” bring a frisson of excitement to this challenge, the reality is that an unsteady national economy topped by 2018's bruising technical recession has left small businesses in a precarious position.
The latest figures from the Small Enterprise Development Agency (SEDA) show that the overall number of small businesses has declined over the past two years. The decrease was largest among firms that had been operating between two and three years, with a collapse of 15.5% specifically in those with young owners. For those still operating, there’s an overall drop in profit and turnover. Jobs offered by SMEs are down by 20%, including the employment of small business owners.
At Property Point, we recognise that successfully incubating and accelerating small business is crucial to the South African economy if we are to overcome unemployment, create economic participation and transform an unequal society. Property Point, a Growthpoint Properties initiative, has been tracking the economic environment through our Monitoring, Evaluation and Research division.
With the challenges identified, we firmly believe that small business has an advantage in this difficult economic climate – its agility. That, along with government’s pledge to significantly expand its Small Business Incubation Programme, should be a game-changer in time to come.
The time has come for entrepreneurs in the SME sector to change and adapt by shifting strategies in response to changes in the economy.
Of course, when times are tough it is easy to default to panic mode. However, entrepreneurs can rise above this if they focus on five key areas to help them move forward, namely…
On the business front, the recent South African Business Incubation Conference (SABIC) highlighted that incubators should build their capacity to support SMEs in the digital age and use market intelligence to deliver data-driven support solutions.
This is where Property Points shines and shows decisive leadership.
Named 2018 Accelerator of the Year at SABIC, Property Point was launched by Growthpoint in 2008 and has since made enormous strides in developing sustainable small businesses. It has helped companies, big and small, scale new heights, and contributed positively to the property sector and South Africa as a whole.
To date, Property Point has facilitated market opportunities worth R1.14bn for the 168 SMEs that have taken part in its two-year enterprise and supplier development programmes, which have created more than 2,405 full-time jobs. Its SMEs report an average 44% growth in revenue.
Property Point delivers the enterprise and supplier development programmes of a growing portfolio of partners including Growthpoint, Attacq Limited, Fortress REIT and the Department of Small Business Development (DSBD).
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