Gauteng Business News

Send  Share  RSS  Twitter  05 Nov 2010

SME's: Crime and Competition Still the Biggest Headaches for SMEs


Recent Gauteng Business News

Crime still tops the list of the major worries for decision-makers at small, medium and micro enterprises (SMEs).

While there is no doubt that the financial crisis has caused sleepless nights for many business owners, according to the SME Survey 2010, sponsored by the National Youth Development Agency (NYDA), there are a number of other issues that also keep SME owners awake at night. Principal researcher Arthur Goldstuck says that, while the data suggests that many of the biggest factors have changed since the last survey, the number one issue remains the same.

“Crime is far and away the most important concern for SME decision-makers. However, a higher proportion of decision-makers at established SMEs have sleepless nights over crime – 50% of these respondents – than those at emerging businesses - still high at 27%. This is probably due to the fact that emerging businesses remain more focused on getting their businesses properly established, while those that are already established make more likely targets for criminals,” he says.

“After crime, the issue that causes the most sleepless nights is that of competition. In the emerging SME sector, 14% of businesses consider competition to be a major headache. The proportion is even greater among established SMEs (18%). This indicates that, in a tight economy, the same businesses appear to be fighting for a smaller piece of the pie.”

He suggests that in previous surveys, competition was not viewed as a major worry, so the current percentages indicate that market conditions are much tighter than before. This is clearly where the recession is biting hard, since there has not been an explosion of new businesses in the SME market.

“Another aspect that worries SMEs is the lack of credit. While it is far less of a worry than crime, it still pops up among 9% of emerging SMEs - but only for 3% of the more established businesses. A more serious issue is fear about cash flow. It affects 12% of emerging businesses and 7% of established SMEs.”

However, one worry that sat in the top five worst problems during the last survey has all but disappeared off the radar. Goldstuck points out two years ago, most SMEs were nervous about the high interest rates. This has now fallen away almost completely and is the one positive impact the recession has had on the SME space.

“This is not to say that there are no other positives. It is significant that most of the issues identified two years ago as being major worries - aside from crime and competition – have been dramatically reduced in 2010. Even crime has fallen back somewhat in comparison to the previous survey. Although the World Cup and the build up to the event may be the reason for this, thanks to an increased police presence, it may also be that SA is slowly turning the tide on crime,” concludes Goldstuck. “If it is the heavier policing surrounding the World Cup that led to this perception, then that in itself suggests the solution.”

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