Critical resource for SMME survival
At least 80 business consultants and owners from the Border region and former Transkei attended the relaunch of the regional chapter of the Institute of Business Advisors Southern Africa (IBASA) held at the Eastern Cape Development Corporation (ECDC) last week.
This had been identified as a critical resource to ensure that small, medium and micro enterprises have a fighting chance in this economic climate.
The capacitation of SMME’s is critical because 55% of waged employment is within this sector, which contributes 25% to the Gross Domestic Products (GDP) of South Africa.
Metros such as Buffalo City contain 67% of formal SMMEs. Sadly, research conducted by Moneyweb shows that 70-80% of small businesses fail within five years.
Lack of business support has been recognised as a cause for failure. Other factors include having the wrong motivation to start a business, poor service, and poor infrastructure.
The Institute is an independent, non-statutory, professional body that is recognised by South African Qualifications Authority (SAQA). It grades and accredits business advisors, consultants, coaches and mentors serving micro, small and medium enterprises (SMME’s) in Southern Africa.
Managing Director for IBASA, Andre du Preez, says the professionalisation of the business advisory sector seeks to address the challenges faced by those whose businesses do not have longevity.
“Entrepreneurs are hard workers, they are persistent, and they do not sleep. But they may lack knowledge and the skill sets to do critical analysis of their own businesses for sustainability. Self-analysis of your own company is not advised,” warned du Preez.
He adds that threats to start-up companies are based on wide-spreads myths centered around instant gratification. Often companies believe that if they can secure one tender, they can build a foundation on that, which has not been proven. Secondly, the notion that if you are black, female and young it ought to be easy to get business, has been proven to be untrue.
“However, being young in business has a lot of advantages which is why we encourage the introduction of entrepreneurship courses in schools. Young people are sharper, they have access to vast knowledge but most importantly, they think differently,” he said.
Businesses are encouraged to get membership of IBASA and access the services that the Institute provides in order to harness their business skills. Advisors give an informed picture of the challenges and opportunities facing small business in the region.