AS the outlook of the mainstream economy seems to be all doom and gloom, it is important for small businesses to get the important attention they need to succeed.
Donna Rachelson, CEO of Seed Academy, the small business promoters, said that according to their survey on entrepreneurs, the number of thriving small businesses is increasing but too slowly.
“On average, South African entrepreneurs employ between two and four people but their impact on their local economy remains small.
“Many entrepreneurs have reported that they don’t know how to find or access available support.”
Apart from a need for accessible support, other problems include the funding drought, marketing and finding a customer base, trying to do too many types of business or a lack of guidance, slow sales, cash flow that drips in slowly or not at all and the unpredictability of business.
While business opportunities appear to favour young men, there needs to be space to include women entrepreneurs.
Small business problems
Nearly three out of four entrepreneurs need funds to boost their business, 28% need less than R10 000 and 30% needed less than R50 000.
The major problem for investors is the reduced tolerance for risk. The early stages of a business always appear less attractive to funders.
Rachelson said that funders need to be more active in educating entrepreneurs in their processes as to make them “funding ready” or more attractive to other investors and potential clients.
“The enterprise and supplier development sector needs to be refreshed. Small businesses need interventions from mentors and advisers, which can streamline the core functions of a small business. All too often, small businesses get caught up in big ideas and plans without first make sure they run as a competent enterprise first. Businesses must walk before they can run.
“Once a business is running smoothly, the owners can set aside capital and cashflow to find out which of their big ideas work or need to be put back in the box.”