South Africa’s small businesses are optimistic about the future, with 58% expecting to grow in the next year, 29% expecting to stay the same and only 12% expecting to shrink, according to a survey released by accounting software company Xero.
Four-hundred South African small businesses across 22 sectors were interviewed for the report, titled The State of SA Small Business.
Twenty-seven percent of the small business owners interviewed cited access to funding as a major barrier to starting a business, with most small and medium-sized enterprises (SMEs) relying on personal savings, friends or family to start their businesses.
The research further revealed that 40% of the country’s SMEs relied on error-prone spreadsheets and paper records and, with the economic output of small businesses in South Africa estimated at 52% of the gross domestic product (GDP), the report highlighted that a potential R1-trillion of GDP was at risk.
Although South Africa’s small businesses were confident about their prospects, 86% believed government did not support them enough.
“We are passionate about helping small businesses operate more efficiently, because of the impact it makes to individuals and for the impact we can make on the larger business community,” said Xero co-founder Gary Turner, adding that the company’s research highlighted the key challenges facing the small business community in South Africa.
“This is a large and vibrant entrepreneurial community and this research shows that significant opportunities exist for small businesses and their advisers