63% of small businesses fail

Johannesburg - Small business failure rates are as high as 63% in the first two years of trading, Absa said on Thursday at its Small Business Roundtable in Johannesburg.

"The biggest challenge that the country faces is creating employment through building a culture of entrepreneurship, but this has been difficult.
"Entrepreneurs have a certain set of skills and don't have the funds to employ the other sets to run a successful business," Nico Jacobs, head of Absa Small Business said.
Jacobs highlighted the importance of small business to the economy.
"Small businesses have moved from employing 18% of the South African employable population in 1998 to more than 60% today."

Reasons why businesses fail included poor management as well as lack of structure and infrastructure.
However, the lack of financial know-how was the biggest reason.

"But this has not stopped new entrepreneurs from entering the market," Jacobs said.
"Currently the new entrants mainly range from people who are unemployed, retrenched or retirees who realise they can't survive on their pension.

"They are then forced to start their own business, but are not equipped to handle the rigours, do not have the financial support or knowledge."

Jacobs added that in order to tackle this issue, Absa Small Business had developed a classroom-based mentoring programme – the Enterprise Growth Programme (EGP).

"One of the key highlights of this programme is that it will help develop entrepreneurial skills, teach participants how to effectively implement their business plans, understand the various aspects of a business and how they all tie in together."
The EGP currently operates in KwaZulu Natal, the Western Cape, Limpopo and Gauteng.
"The national roll-out is scheduled for February 2011."
We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders