No one ever said that owning a small business is easy. We work with small business owners every day and have learnt a lot about the challenges they face – and the solutions we can offer them.
Below are 4 challenges that small business owners in South Africa face, as well as a funding suggestion to get your small business to where it needs to be.
Access to finance is one of the most significant barriers facing small business growth in South Africa. Most small businesses lack funding to start and run their businesses and on top of this, haven’t built up enough of a credit rating to receive funds from traditional South African lenders. This makes it challenging for them to secure loans or other forms of funding to expand their businesses.
“Never take your eyes off the cash flow because it’s the lifeblood of business.” - —Sir Richard Branson,
Cash flow refers to the movement of money in and out of your business in terms of income and expenditure. Globally, 61% of small businesses struggle with cash flow. And, nearly a third of the small businesses surveyed admitted to being unable to pay vendors, loans, themselves or their employees because of cash flow issues.
The past two and a half years have shown that traditional supply chain processes are not enough. Globally businesses of all sizes struggled with supply chain issues due to the Covid-19 pandemic, disruptions like the Suez Canal blockage, riots, the container shipping crisis, and power issues in Asia and Europe.
In 2022, supply chain professionals faced more challenges as floods and droughts in South Africa made it harder to maintain business continuity and resilience.
South Africa comes with its own set of unique challenges. Last year, workers at Transnet, a national logistics and freight company, went on strike costing the country billions every day while pausing import and export activity. The transport group CEO, Portia Derby, said that backlogs caused by rioting at the ports and rail systems would require between six and nine weeks to clear.
“An astounding 74% of South Africa’s youth is unemployed, while at the same time, an estimated 77 000 jobs are available, but nobody has the correct skills to do them. Add to this the fact that more than 300 000 jobs have been outsourced to employees who live overseas…” – Mamongae Mahlare, Group CEO at Takealot
52% of CEOs globally believe that skills shortages will affect their profitability over the next 10 years. According to James Formy, RMB’s CRO, South Africa’s skills shortage is one of our biggest economic risk factors which could hold us back on our economic recovery plan.
While all businesses struggle with skills shortages, small businesses in South Africa struggle to attract skilled talent due to competition from larger corporations.
At Geddes Capital, we specialise in helping small business owners find the funding they need to keep their business afloat – and grow towards the future they deserve. We have various financing solutions from Business Loans to Bridge Finance.
Get in touch with our team to find the funding solution for your small business.