The Reality of Challenges Facing SMMEs in South Africa

By Innovator Trust on 29 Oct 21

The Reality of Challenges Facing SMMEs in South Africa

The allure of being a budding entrepreneur, starting out with a big idea and the prospect of seeing that idea sprout to become a reality, is an admirable path to embark on. But in a country like South Africa, the reality of an entrepreneur is a much more complex tale.  It is often the case that more of the good bits are favoured over the valley moments when the entrepreneurs tale is told, creating a false perception and begging the question, “What is the price of success for a small business in the rainbow nation?” 


Levels of Challenges

Taking a more holistic look at the complexities of the SMME landscape would be to look at some of the internal challenges entrepreneurs face daily. At the grass-roots level, challenges are often rudimentary, such as access to technology or tools to trade, things like airtime, data, software, even something as simple as a smartphone. For those small businesses who may still be in the early start-up phase but generating some revenue, issues relate to a lack of or poorly setup foundational infrastructure, systems and processes, access to information, skills training, business mentorship or access to entities setup to provide support to SMMEs.
In a focus group study conducted by the Innovator Trust among ICT small businesses, to ascertain where the challenges lie, the outcomes revealed that although fundamental items like software, computers and internal skills are the basics required to do business, it is the strategic elements like networks, market research, access to decision makers, complex contract models and negotiation skills that are vitally important. Other critical needs identified in the study were sales support, lack of technical and strategic financial skills and a lack of access to professional services (HR, Legal) that a business would require. 
Mbavhalelo Mabogo, founder of taxi-tech start-up company, Quickloc8, operating since 2018, highlights some of the gaps for small business owners, despite having a formal business education. “The challenges I’ve experienced as a business owner centre around not paying close attention to the things I thought were insignificant, the boring stuff like admin, it catches up with you over time. I have an MBA and you think it prepares you but I got the surprise of my life. When you become a business owner you realise you are dealing with people, real human beings with real problems and aspirations. This has been my greatest challenge and also the biggest area of my growth,” says Mabogo.

Mental Health for the Small Business Owner

On a more personal level, the challenges experienced within the world of the small business owner are amplified. It is often that one person at the helm of the business, who meets the knocks first; unshielded, unprepared and often without warning. How 'well' the individual is able to manage challenges is different for every leader, but the mental health effects over time, is something that is common to the experience of small business owners, and a topic that is often neglected in the lecture halls and textbooks of business schools. Mentorship is particularly important in easing the mental burden on SMMEs, providing the opportunity to focus on the critical business needs at hand and thus ensure a greater level of sustainability in the long-run. 

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