SAICA Releases 2015 SME Report

SEPTEMBER 26, 2015

The South African Institute of Chartered Accountants (SAICA) today released its annual SME Insight Survey. The survey findings provide meaningful insights into SMEs’ frustrations and current attitudes to entrepreneurship, offering suggestions on how to improve the SME environment.

Over 1300 business owners – compared to 800 in the 2014– took part in the survey proving the extent to which Small and Medium Enterprises (SMEs) desire a platform to raise their concerns.

The National Development Plan (NDP) tasks SMEs with creating 90% of new employment by 2030. While this might seem like a tall order, by gaining a thorough understanding this sector, government, Small and Medium Practices (SMPs), and SMEs themselves will be in a better position to succeed and meaningfully contribute to job creation.

Terence Nombembe, CEO, SAICA said, “By collecting these insights and investigating the findings our aim is to influence policymakers in creating a more enabling SME environment and to demonstrate the ways in which SMPs can better assist their SME clients.”

According to Nombembe, “The report distinguishes between external factors that impact SMEs – that is to say factors they have no control over – as well as internal factors that are within their control.”

By differentiating between external and internal factors the report highlights the ways in which SMPs can assist SMEs from within, to stimulate growth and suggest possible ways in which government can ensure the success of the sector.

Bridgitte Kriel, Project Director for Practice at SAICA, indicated that, “The 2015 survey results will be shared with various government departments and determine how policies toward this sector can be influenced. This information is shared with the purpose of creating healthy growth and sustainability in the sector.”

The highlights of the 2015 survey findings are:
• SME success increases with mentorship and technical assistance, and one of the best sources of mentoring for new SMEs may be more experienced SMEs.
• Policymakers need to reduce red tape.
• If government wants to do business with SMEs it will have to improve payment terms and simplify the tender process.
• BBBEE legislation should be the gateway to faster growth of SMEs, but for most it’s not.
• The number of people employed in SMEs grows rapidly with turnover, and with the length of time an SME survives.
• Many SME shareholders are also the chairpersons of their boards, the only directors, and the CEO enabling flexible decision-making but leading to poor governance.
• The main reasons for SME failure are cash-flow related.
• SMEs indicated that they consider their most difficult obstacles to be:
o Red tape
o Obtaining finance
o VAT registrations
o Compliance with legislation
o Finding customers

“This report was made possible with the assistance of DotNews and Sage Pastel – and we thank them for their support. This is but one demonstration of the effect of collaboration between organisations, and the way in which it unlocks infinite possibilities to positively contribute to the economy and the NDP,” says Kriel. -