Small businesses are the backbone of the South African economy, contributing 34% to the national GDP and employing between 50 and 60% of the country's workforce
Small businesses are the backbone of the South African economy, contributing 34% to the national GDP and employing between 50 and 60% of the country's workforce . From local spaza shops to budding digital enterprises, these companies might be small in stature, but make an enormous difference to countless families, offering much-needed jobs during a period of record unemployment.
Yet despite a growing entrepreneurial presence in South Africa, many SMEs still don't receive the support they need to truly prosper. Whilst some fail due to lack of critical skills and industry expertise, others simply aren't able to rely on the support of fellow businesses and clients, and as such struggle to compete with more established, internationally-recognised brands.
In challenging economic times, it's more important than ever to embrace the spirit of ubuntu and support local businesses. It's also vital that SMEs look out for each other, establishing mutually beneficial networks that enable them to attract and retain new clients, and thus continue to provide work for countless families across the country.
Here are a few tips for SMEs and everyday consumers alike to aid in promoting, supporting and celebrating the small business sector:
Sharing is caring
The biggest ally for any small business is…. another small business. As such, it's important for small business owners to attend relevant networking events and take advantage of shared working spaces to make connections and build client and supplier bases. Working closely with complementary businesses can make an enormous difference to any enterprise's bottom line, and can aid in strengthening the client offering, optimising efficiencies and freeing up necessary time to map out clear and achievable growth trajectories.
Rally Your Troops
Entrepreneurs typically tend to spread themselves thin, opting to do too much with too little to save costs and preserve the business's bottom line. Yet by cutting corners, many business owners shoot themselves in the foot and end up not allocating enough time to establishing a clear company vision. If there's an important project that needs to be executed, be it a website or a social media campaign, it's worth spending a little more to get the job done right. Even better, when you are able to tap into the resources from the SME circle and eco-system you’ve nurtured around your business.
Understand and manage your risks
Whilst minimising costs is one of the primary objectives of many entrepreneurs, this approach can ultimately turn out to be financially devastating if risks aren't properly calculated and accounted for. While small business owners are typically experts in their chosen field, they're not always prepared for the potential pitfalls that could place their company at risk. This is where the role of a broker or reputable insurance company, can prove invaluable as a means to proactively protect your business. So whether you operate a school shuttle service or run a home bakery, take time to engage an insurer to better understand your unique risk profiles and take the necessary measures to set up your enterprise for success.
Get social
Not only do social media channels such as Facebook and LinkedIn offer your business the opportunity for relatively cost-effective exposure via targeted campaigns, these platforms also provide access to a wealth of information and networking opportunities at no cost. All it takes is a click of a button to join a group or forum and interact with like-minded industry professionals, which can go a long way towards building your business ecosystem and establishing necessary support networks.
Don't delay pay
Many small businesses operate without much financial wiggle room, so it's important not to delay payments or to force these enterprises to shoulder costs they simply aren't able to sustain. A missed or delayed payment can severely compromise a small business's cash flow, so if you've commissioned an SME to complete a job, do your best to reimburse them timeously, as this can spell the difference between success and failure.
Spread the word
Support comes in many forms, and one of the best and easiest ways you can uplift local businesses is by ‘giving them airtime’. Whether it's by telling your friends, posting on social media or leaving a review online, there are many ways to make your voice heard and build credibility for businesses you believe in. These companies typically don't have large budgets to promote themselves, so every bit helps when it comes to word-of-mouth marketing.
Consider local-and-lekker alternatives
In a world where we're constantly bombarded by advertising, it's often easier to go with the 'safe' choice. Sometimes we even do so unconsciously. But next time you're in the market for a product or service, make sure to do a little research on smaller, local alternatives. By supporting these up-and-coming enterprises, you're not only aiding the economy, but you're also empowering hundreds of households around the country and celebrating the courage and tenacity of those who go it alone against the odds.
Small businesses offer up a vital economic lifeline to South Africa. By working together and offering our support to small business owners, we're not only promoting our own economy, but also encouraging others to take the plunge and pursue their entrepreneurial dreams. It's important to remember that small businesses work for all of us, so it's on us to do the same in return.
Miway is a licensed non-life insurer and Financial Services Provider (FSP 33970).
