Surviving in a tough economy while navigating numerous challenges, small business owners often overlook the fact that they hold the key, not only to their own success, but to the future of the country.

It is widely recognised that small and medium enterprises (SMEs) are the driving force behind economic growth and job creation. In South Africa, SMEs drive 40% of the economy, with 50-60% of new jobs being created in the sector. A thriving SME sector is therefore the key to addressing South Africa’s staggering unemployment rate and dismal economic growth.

So what hampers the success of SMEs? It is certainly not a lack of optimism and enthusiasm. This was recently confirmed by a survey conducted by the South African Institute of Chartered Accountants (SAICA), among almost 900 SMEs throughout South Africa. The Institute is ideally positioned to address the question, given that approximately 20% of all SAICA members work in practices that provide auditing, independent review, financial services and business advice to SMEs.

The survey revealed that even though 2013/14 had been a rough financial year for many small businesses, the vast majority remain optimistic about the future. “When asked to rate the specific obstacles to their growth, the SMEs participating in the survey showed a large degree of consensus in identifying bureaucracy, tax, labour and funding as the main challenges” says Bridgitte Kriel, Project Director for Small and Medium Practices at SAICA.

“It is encouraging to note that government is moving in the right direction in addressing some of the challenges faced by the SME sector through the establishment of the Department of Small Business Development (DBSD) and the Small Enterprise Finance Agency (SEFA), as well as the tax relief, the small business desk in SARS’ revenue offices and the R3.5 billion allocated to the DBSD for mentoring of SMEs, announced in the recent Budget,” adds Kriel.

Yet, despite government’s interventions, the challenges SMEs face are not going to disappear overnight, and will never disappear entirely. In reality, all SMEs can hope for from government is to provide an ideal environment for SME growth. Once this is done, it’s up to small business owners to utilise every resource available to them and grab every possible opportunity to thrive – and that’s easier said than done. Where, after the demise of the friendly bank manager, do SMEs go for advice?

SMEs need quality, specialised skills in financial and business management, budgeting and cash flow management, compliance, tax and accounting – precisely the skills chartered accountants [CA(SA)] and auditors who are SAICA members can bring to a business. “Proper record keeping, budgeting and cash flow management, analysis of financial statements, professional tax structuring and compliance with tax, labour and company legislation, business plans and professional advice – this is what a professional chartered accountant or auditor delivers to a SME,” explains Kriel. “By providing these essential services, chartered accountants and auditors help SMEs ensure their businesses are legally compliant, and have accurate and comprehensive financial records, good business and cash forecasting and budgeting, as well as timely tax submissions. This exponentially increases the odds of a business surviving in a country in which a staggering 80% of small businesses fail, largely due to a lack of these financial skills.”

“SAICA believes that SMEs hold the key to their own success by accessing the quality, specialised skills in financial and business management, compliance, tax and accounting offered by professional SAICA-registered accountants or auditors. In doing so, small business owners build sustainable businesses that can access the assistance and funding available through public and private organisations to boost their success,” concludes Kriel. “Successful SMEs, tapping into the invaluable resource of professional accounting and audit services, will not only build the companies of the future, but will also create the thriving SME sector that will drive rapid economic growth and job creation, and, in turn, contribute to a vibrant economy in which their businesses and entrepreneurial skills can flourish.”