Gerrie van Biljon Economic conditions continue to strain the operating environment for small and medium enterprises (SMEs), and unless the private sector and Government work more closely together to create a more conducive business environment, confidence levels amongst business owners will continue to lag. This is according to Gerrie van Biljon, Executive Director at Business Partners Limited (BUSINESS/PARTNERS), who was commenting on the company’s latest SME Index results, which reveal that business owners’ confidence levels remain depressed. The first quarter 2016 Business Partners Limited SME Index – which measures the attitudes and confidence levels of South African SME owners – revealed an average confidence level of 51% that the South African economy will be conducive for business growth in the next 12 months. This is unchanged from the previous quarter, and a decrease of 9 percentage points when compared to the first quarter of 2015.  “Following the events of the firin...

Elize Giese As more businesses struggle to maintain profit margins and survive in this tough operating environment, the last thing SMEs should be doing is wasting more money while trying to cut costs. Elize Giese, Head of Investments at FNB Business says one of the biggest mistakes that SMEs make when trying to cut costs is failing to devise holistic strategies dedicated to assist their businesses from financial losses. Instead, small business owners often make rash decisions when under pressure to try and cut costs, but end up doing more harm than good. Giese shares ten common cost cutting mistakes that business owners should aim to avoid. Long-term consultancy contract – consultants make sense when there is a short-term need for specialist skills. If however, it is an important part of your business in the long term, it might make sense to hire a full-time resource. Using consultants for long term projects can prove to be costly for SMEs. Therefore, developing the required sk...

Mags Ponnan Despite the rapid growth of business accelerators, small business owners are still reluctant to take advantage of these initiatives due to a lack of knowledge and understanding of how impactful the right guidance and support can be for their business. Mags Ponnan, Head of Customer Value Propositions at FNB Business says in order for the country to create jobs and maintain sustainable economic growth, support should be provided to SMEs that often face leadership, operational and strategic challenges. “However, entrepreneurs that are eager to take their businesses to the next level should be cautious when enrolling in business accelerators as many of these programmes may be unique, sector specific and have different goals and objectives,” says Ponnan as he shares ten reasons why SMEs should consider joining business accelerators.  Mentorship – being a good entrepreneur alone is not enough to successfully expand a business. Entrepreneurs need to acquire certain...

Irregular or delayed flows of payments from customers continue to have a detrimental impact on the cash flow of South African small and medium enterprises (SMEs), severely restricting opportunities for expansion and job creation.  This is according to Gerrie van Biljon, Executive Director at Business Partners Limited (BUSINESS/PARTNERS) - a risk finance company which finances and invests in SMEs. Van Biljon says that the way in which a business manages its working capital and the speed of its cash conversion cycle ultimately impact its overall profitability. “Put simply, in order to produce and sell a product or service a business incurs costs including wages and raw materials, and if it doesn’t receive payment during a certain time period for the product it has manufactured, or the service it has provided, the business cannot purchase new material, pay staff or overheads. The most recent Business Partners Limited SME Index, which quarterly measures confidence levels amongst...

MODERATE IMPROVEMENT FORECAST FOR SMES IN 2015, BUT CONDITIONS TO REMAIN CHALLENGING Nazeem Martin  The single biggest challenge South African small and medium enterprises (SME) owners’ encountered in 2014 was the perilous state of the economy, which resulted in established businesses stagnating, as well as a decline in new businesses creation.  According to Nazeem Martin, MD of Business Partners Limited, a specialist risk finance company for formal SMEs, 2015 will be similarly challenging for South African small businesses due to the continued sluggish economic growth and the inability of Eskom to ensure an adequate, consistent and reliable power supply.  He says that overall, 2014 was a tough year for businesses and this was primarily attributed to generally adverse conditions. “Many factors during the year undermined businesses confidence and hence their desire and ability to grow and contribute towards economic growth in the country,” says Martin.  M...

CLOUD COMPUTING CAN EMPOWER SA ENTREPRENEURS 22 October 2014: Small businesses that use more than two types of cloud services grow 26% faster and are 21% more profitable on average than those that don't use cloud tools, according to a new report from Google and Deloitte which surveyed over 1300 IT decision makers in six countries including the United States, United Kingdom, France, Spain, Italy and the Netherlands. South African business owners and entrepreneurs should learn from the results of this survey and utilise cloud computing to their advantage.  This is according to Athol Wesselink, Chief Engineer at OpenWeb, a nationwide internet service provider (ISP) who says the use of cloud computing makes it more affordable for start-up businesses or Small, Medium and Micro Enterprises (SMMEs) to establish a small office or to work from home. “Users can benefit from several technologies, cut costs and focus on their core business instead of being impeded by IT obstacles.” W...