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How The SA Government Can Help Small Businesses Thrive

The Xero report has gathered the top five priorities – as identified by South Africa’s small business owners.

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Small businesses are a critical component of the South African economy. They account for 52% of the country’s GDP, contribute millions in tax revenue and help address the nation-wide unemployment problem by creating more jobs. The government does acknowledge this to some extent and has made some effort to support their growth – but more needs to be done.

The Department of Small Business Development launched in 2014. Its aim is to support South Africa’s entrepreneurial community. However, the initiative hasn’t quite achieved its objectives and, according to Xero’s 2017 State of Small Business report, only 4% of small businesses feel that the department has helped their organisation. A surprising 89% say it is has not helped their businesses in any way.

The reality is, the current national and global economic climate is putting South Africa’s small businesses under immense pressure. They require specific attention and support. The Xero report has gathered the top five priorities – as identified by South Africa’s small business owners. 

1More funding options

Almost half (48%) of small businesses would like to see more help from the government with regards to funding. Currently, 85% of South African start-ups are self-funded. This route requires personal resources that are out of reach for many would-be entrepreneurs. And even those who do manage to fund their own companies, won’t necessarily have enough to grow their businesses to their full potential.

Related: Smart Money For Small Businesses

Access to outside funding options is thus crucial. If the government makes more money available to small businesses through subsidies and grants, then more new companies will be able to launch – and grow.

To limit the number of South Africa’s successful entrepreneurs to those with enough money to fund their own companies, perpetuates economic inequalities, frustrates individual ambitions and does little to help the country’s progress.

2Less red-tape

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South Africa is a country of rules. Our regulatory environment is notoriously restrictive and 44% of entrepreneurs would like to see less red-tape. It’s not necessarily the regulations themselves that are the problem – but rather the level of bureaucracy. The government expects full compliance, yet offers little official assistance to help businesses navigate the corridors of power.

Small business owners, who typically don’t have much time to spare, have to spend valuable hours travelling to and from various government agencies and departments. The issue is the current lack of co-ordination between these offices and their individual legislative interpretations. Entrepreneurs are often shunted from one to the other, seeking a signature here and a stamp there – only to be told that they’ve missed a step and have to start at the beginning.

Compliance is of course, crucial. However, small business growth should not be interrupted by unnecessarily obstructive rules and regulations. If the government would like to boost the economy even further, it needs to create a legislative environment in which small businesses can thrive.

3Offer tax breaks

High taxes keep 16% of South Africa’s entrepreneurs up at night and 42% would like the government to offer tax breaks. Prohibitively high taxes can hurt the country’s economy: Businesses move overseas to more tax-friendly locations and take jobs and revenue with them.

Tax breaks benefit both the small business community and the government. They make it more affordable for would-be entrepreneurs to start a business. And, as more companies launch, tax revenue increases.

Related: Cash Flow Tips For Small Businesses To Survive Rocky Times

4Improve access to finance

Access to finance is a recurring issue. With so few subsidies and grants available, small businesses battle to secure the funding they need to grow. Banks are hesitant lenders, especially when it comes to start-ups – and 35% of entrepreneurs look to the government to help them access the financial solutions they need.

The good news is, the government can help. The Department of Trade and Industry, along with its various satellite organisations, offers loans with flexible repayment terms and lower interest rates. Of course, this doesn’t meet the growing demand, and more finance options need to be made available to help entrepreneurs get their businesses up and running. 

5Education investment

The high unemployment rate in South Africa is compounded by a severe skills shortage. Small businesses need very specific skills and have to hire carefully – the wrong recruit can become an expensive mistake. Too many entrepreneurs struggle to find the right people with the experience and skills that they need – which limits their growth potential.

Almost a quarter (22%) of small businesses believe that the government needs to invest more in education. While this is no short-term solution, it is a necessary step towards building South Africa’s talent pool and safeguarding its economic future. If this doesn’t happen, neither the companies nor the country will be able to function at maximum efficiency.

The government has much to gain from working in the best interests of the small business community. The sooner the two parties are on the same page, the better for the economy.

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4 Black-Owned Businesses Participating in This Enterprise Development Programme That Are Growing – Fast

The Department of Small Business Development (DSBD) and Property Point have joined forces to take 16 small to medium-sized, black-owned, businesses, through a life-changing enterprise development programme.

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The Department of Small Business Development (DSBD) and Property Point have joined forces to take 16 small to medium-sized, black-owned, businesses, through a life-changing enterprise development programme.

In its first three months of operation, this programme has already seen incredible results with an average growth rate of 27% per business,  R17,8million in contract secured and 21 direct jobs created. This is a unique collaboration in that it is set up specifically to encourage access to markets for the beneficiary businesses and is the first of its kind in the industry.

But who are the people behind the numbers?  Meet four out of the 16 business owners , Thabiso, Falvia, Malusi and Mandla taking full advantage of this opportunity.

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Entrepreneur Today

How WordPress Can Help Your Small Business

WordPress is an amazingly large platform filled with incredible tools from useful plugins to intriguing extensions. It’s a platform for bloggers, social media influencers, and increasingly, small business owners.

Josh Althuser

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WordPress is one of the largest content management systems available. In fact, it powers nearly 30% of all US websites. Its ease of use and a open-source nature has prompted the platform to become overwhelmingly popular.

For many, WordPress is an invaluable resource that makes website management simple and promotes their brand easily. It is Little Wonder then that so many businesses use WordPress to handle their website and online presence management. Even though it is very popular, learning WordPress is an entirely different task.

Not many small businesses can afford to have a WordPress developer. In that case, it is important for many owners to learn as much as they can about WordPress.

Achieving effective market growth

There are those who still wish to use traditional services but are usually dumbfounded by the price and time requirement for making custom websites outside of the platform.

The abundant array of tools and applications makes using WordPress simple but effective for market growth.

For many businesses just starting out, getting traction and marketing growth are very difficult and can be taxing experiences if done by hand.

Related: 7 Ingredients Of Small Business Success Online

With a platform like WordPress achieving a beautiful website and pushing a brand is much simpler and easier than trying to do everything yourself.

Optimising your website with SEO

One of the most important aspects of business writing on a website is search engine optimisation or SEO. WordPress fortunately comes with a number of plugins that makes SEO very simple such as Yoast.

This service scroll through text and automates the SEO process to make sure your content is pushed to the best of its ability while also giving your brand the most exposure it can possibly take.

SEO is a very taxing and tedious process for many small business owners and the WordPress platform makes it simple.

Monitoring your website and developing leads

There is also the issue of monitoring who is coming to your website and who was looking at your products. again, on the WordPress platform there is the Google analytics plugin which allows owners to analyze who’s coming to their website and for how long.

This can be used to determine if your marketing or branding is effective and can determine what things need to change to increase exposure.

For small business, exposure is everything and awareness is the key to a successful business.

Increasing site security

Keeping a site secure is another main issue for people who run their own website and luckily WordPress has a plug-in for that.

Vaultpress, the premier security plugin, keeps your website secure and in the event of a catastrophic failure it can restore the entire site.

Business owners often fear their website crashing as it would reduce the amount of traffic it could garner and may interrupt their business practice. The WordPress platform has many tools which prevent loss of data or breaches of security so that your business can continue to run smoothly.

The benefits of using WordPress

These tools, mixed with a host of other utilities, make WordPress the premiere platform for websites for businesses of any size.

With its integration software you can automate messaging, simplify marketing and, optimise the speed of your website to give users an incredible experience without the cost of a full development team.

The technological age requires that all businesses must have a website or at least a web presence of some kind. it has been shown time and time again that a website is the best way to make a big impression on the consuming public.

Related: 10 Online Marketers To Watch In 2018

Time, as it moves slowly forward, shows us that the world will revolve around the Internet and technology. A web presence then, is not just a good idea or a trendy notion, but rather imperative to stay competitive in the future. To that end, there is no better platform to create a website on than WordPress.

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Government Funding

New Fund For Small Businesses To Be Developed

Government has allocated R2.1-billion toward the development of small- and medium-sized businesses.

Entrepreneur

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Driven by the Departments of Small Business, Science and Technology and the National Treasury, it was announced during the 2018 budget speech that entrepreneurs could unlocking funding for their businesses through a new funding initiative.

What is the new Fund?

Minister of Small Business Development, Lindiwe Zulu, explains where the fund stands and how it will work:

“The Fund will be operational during 2018/19 financial year but the planned disbursement of the funding will be the beginning of 2019/2020 financial year.”

She says R1 billion has already been transferred to the Department of Small Business Development from the national fiscus.

“The Department of Small Business Development together with National Treasury and Department of Science and Technology are working with the Government Technical Advisory Centre (GTAC) to develop the architecture of the Fund where issues around the management of the Fund will be considered,” she explains.

Related: Government Funding and Grants for Small Businesses

Who will the Fund be for?

“The Fund is targeting high growth businesses as our research on the ecosystem shows that there is a lack of funding of enterprises that are at an ideation and early start-up phase,” Zulu explains.

Her department together with the other participating arms of government, will identify areas of collaboration across research, mentorship and training of enterprises on financial management.

“The work that is being undertaken now will assist government to decide on how the fund will operate, but the government is conscious of the economic environment and would not look at setting up a completely new structure that will add to operational costs,” she says.

Addressing parliament on the fund, the minister said the financial mandate of the fund will be informed by the exercise that is being conducted through GTAC.

“Government is looking at having this fund as a soft loan which will provide affordable finance to small businesses and the emphasis will be more on ensuring that the Fund is sustainable rather than profit maximisation,” she explains.

Related: 11 Uniquely South African Business Ideas

How to apply for funding

Contact the following departments if you would like to access a portion of R2.1 billion:

Department of Small Business Development

  • Address: 77 Meintjies Street, Sunnyside, Pretoria
  • Tel: (+27) 861 843 384
  • Email: sbdinfo@dsbd.gov.za for information on the department and its services.

Department of Science & Technology

  • Address: DST Building (Building no. 53) (CSIR South Gate Entrance) Meiring Naude Road, Brummeria
  • Tel: (+27) 12 843 6300
  • EmailIsaac.Ramovha@dst.gov.za or zama.mthethwa@dst.gov.za for information and brochures about the department’s scope and funding.

National Treasury (GTAC unit)

  • Address: 40 Church Square, Pretoria
  • Tel: (+27) 012 315 5944 or (+27) 012 315 5645
  • Email: info@gtac.gov.za for information from the Government Technical Advisory Centre who will manage the small business fund for National Treasury.

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