Challenges facing new small business owners in South Africa

Small, Medium and Micro Enterprises prevailing in South Africa are facing major problems which are hindering their growth. It is likely that 70 to 80 percent of the new ventures will fail to make a mark in the market. No doubt that the industry people are skilled with first-rate ideas however they lack the ideas to successfully run the business. Various problems stand in the way of the small business owners and among them- environmental, financial and managerial problems are the leading factors.

Every year new business ventures come out in the market but their survival rate is near to the ground

Every year new business ventures come out in the market but their survival rate is near to the ground. South Africa has seen more than one million job losses in the recent years which have pushed up the unemployment rate even higher. The importance of small business ventures in creating employment is huge and its significance has been recognized throughout the world. However, these small business entrepreneurs cannot survive more than 5 years in the industry.

Besides all the factors responsible for the failure of the new business ventures, deficiency in the internal environment remained as the major cause of failure of these business ventures. The major areas of failure include, lack of management skills, financial knowledge, lack of proficiency in functional areas such as marketing and resource management. Some of the other reasons of failure are, unwillingness to adapt to change, incapability to perform as an entrepreneur, overemphasis on monetary rewards as well as restricted family business culture in South Africa. To thrive in today’s cutthroat environment appropriate training program should be put into practice along with providing managerial skills to the entrepreneurs.

Advertisements

One thought on “Challenges facing new small business owners in South Africa

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s