It has been one of the toughest years for small and medium enterprises (SMEs) in South Africa, where various challenges experienced at all levels of the economy affected all types of businesses.
“Looking at the fluctuations in the rand value as an example, this year the country has seen the direct effects of political instability and global factors on the exchange rate, which have sent the rand tumbling a few times,” Gerrie van Biljon, Business Partners Limited executive director, said this week.
One of the major challenges in 2016 for business owners was their level of confidence in the market, according to van Biljon.
“The most recent Business Partners Limited SME Index survey for Q3 2016 indicated a drop in business confidence levels and even where there was a need for goods or services, the client or consumer was hesitant to commit,” he explained.
“It is a vicious circle and with fewer customers, there is less demand, and in return, businesses have less to spend.”
But does this mean the end of SMEs’ woes and that next year will bring fresh hopes?
Van Biljon said while 2017 would no doubt pose new challenges for SMEs, he urged entrepreneurs to remain focused on cutting costs and cash flow management.
“Tight control should be a priority, but finding and securing market share cannot be neglected either. To offer outstanding customer service is not negotiable since clients’ expectations are high and unforgiving of sloppy service levels, regardless of the circumstances,” he said.
While economic growth expectations are low, with a positive attitude and an open mind, entrepreneurs will again manage to survive and perhaps even thrive for another year, he added.