Shocking data from Statistics South Africa (Stats SA) shows that 146 businesses closed in March, up from 135 in February, raising concerns about financial pressure and how companies can avoid liquidation. This brings the total number of closures to 377 in the first three months of 2026.
Although most of these closures were voluntary, analysts say the rising numbers signal growing financial pressure across the economy.
About 85% of the businesses that closed in March did so voluntarily, with 130 companies choosing to shut down. Only 16 were forced into liquidation through court processes.
Sectors such as finance, real estate, and business services were among the hardest hit, followed by trade, catering, and accommodation. These industries continue to feel the pressure of weak consumer demand and rising operating costs.
“Small business failure is rarely caused by one mistake. It is usually a combination of problems that build up over time,” said Futhi Cabe, Head of SME Segment at WesBank.
He said many small businesses close within the first few years due to avoidable challenges such as lack of customers, falling sales, poor productivity, and weak cash flow management.
Cabe warned that cash flow remains one of the biggest risks facing entrepreneurs. Businesses can appear profitable on paper but still fail if money is not coming in on time or expenses are too high.
He added that poor record-keeping makes it difficult for business owners to track performance and respond to problems early.
“Running a business is not the same as doing the work. You need to manage, plan and control the business properly,” he said.
He stressed that many entrepreneurs also fail to follow a clear business plan consistently, often becoming distracted by day-to-day operations instead of focusing on long-term sustainability.
He further warned that businesses focused only on survival often struggle to grow, adding that long-term success depends on managing resources such as cash, time, staff and stock effectively.
Businesses are also facing higher expenses linked to fuel, electricity, transport, and logistics. At the same time, many consumers are reducing spending due to economic uncertainty, placing further strain on revenue streams.
Global instability is also contributing to pressure on local businesses, with ongoing geopolitical tensions affecting supply chains and pricing in key markets.
