Hope for SMMEs in 2010

2009-12-31 13:18

 

THE country is steadily pulling away from the recession and small,

medium and micro enterprises (SMMEs) will be vital in helping the economy get

back on its feet.

SMMEs provide the best prospects of job creation but consumer

demand will have to increase to justify them going that route.

At this point SMMEs are sceptical about the near future and believe

the downturn will still haunt them in the coming months.

“The credit market will remain tight in 2010 and businesses will

experience a further decline in customer orders,” says Tony Balshaw, a managing

partner at Grant Thornton, an auditing firm.

Balshaw’s comments are informed by the finding of the Grant

Thornton International Business Report 2009, which surveyed small businesses.

He

says that SMMEs with relatively low levels of debt and cash resources will have

better prospects.

Balshaw says major challenges that were faced by small businesses

this year include:

Declining demand and waning customer confidence;
A shortage of consumer and business credit;

Crime and political uncertainty and;

Failure of government to align public sector procurement policy

with the broad-based BEE codes of good practice.

Small business analyst Septi Bukula is no less pessimistic about

the prospects of SMMEs.

“I think the demand conditions will remain weak and businesses will

struggle to secure credit until the end of the first quarter next year,” he

says.

He says the recession has weakened a large number of small

businesses as it has shrunk consumer demand for goods and services.

“Consumers are going to remain cautious in terms of spending and

this is going to continue to affect small businesses,” says Bukula.

However, entrepreneurs in the tourism sector may need to swap their

raincoats for sunglasses.

Foundation for African Business and Consumer Services president

Mxolisi Zwane believes that small business prospects will start to improve

towards June.

“The indications are that 2010 and 2011 will be better for SMMEs,”

says Zwane. Part of his optimism is brought on by the month-long soccer World

Cup in mid-June.

But it will take a lot more than improved trading conditions for

small businesses to fly. The country is lacking in entrepreneurial spirit and

talent.

A study by Endeavor, a US-based non-profit organisation that

supports entrepreneurs in emerging countries, shows that South African rates of

participation in entrepreneurship stand at a low 5%.

The country trails behind other emerging market countries such as

Brazil (12%) and Indonesia (19%).


Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.