A number of Some South African small businesses have a positive outlook, despite the current economic climate and Covid-19 pandemic. This is according to the 2020 Business Partners Limited SME Index, which has found that confidence among SMMEs has increased.
The index is a quarterly measurement of the attitudes and confidence levels of South African SMME owners. According to David Morobe, who is an executive manager at Business Partners Limited, they showed a confidence level of 54% that the economy would be suitable for business growth next year. This is a 15 percentage point quarter-on-quarter increase. “SMEs’ confidence levels that their clients will pay them on time also rose significantly, up 12 percent from last quarter,” he said.
“In line with this improved optimism around payment collection and a more conducive environment, respondents’ confidence levels that their businesses will grow in the next 12 months jumped up 16 percentage points from last quarter to 72 percent,” Morobe said. He believed that small business owners thought that the economy may have ‘bottomed out’. So, because of this, they were learning to adjust to the current environment and were preparing for the next 12 months.
Morobe did warn though that it was important for SMMEs to keep their finger on the pulse. Many of them were concerned that in the next six months, their biggest challenge would be cash flow.
“We are living in volatile economic times, and SMEs need to at the very least, ensure that they are in a financial position where they can ride out a similar scenario in the future,” he said. The index highlights that small businesses need assistance with accessing finance and resources specific to their needs.
He encouraged financiers to make funds available. “Considering that 11 percent of SMEs surveyed were still waiting for feedback on their applications for Covid-19 relief finance, it is imperative that financiers not only finalise reviewing applications received, but also look into making finance for working capital available to SMEs that are ready to resume business operations,” he said.
Also, it was time that small businesses finally received the help they needed, Marobe said. “Now is therefore the time for government, big business and other stakeholders to commit to the promotion and facilitation of entrepreneurship and growth within the SME sector,” he said.
“In addition to reducing the red tape that still complicates business compliance matters and offering further relief in the form of tax breaks, these SME stakeholders need to work together to make the business ecosystem as conducive as possible for SME growth.” The survey follows a commitment from 50 companies to start paying their SMME service providers within 30 days.
