SA’s small-business sector is a crucial player in the country’s economy, contributing at least 20% to GDP and around 6% of corporate taxes. It also employs close to half of the country’s workforce. According to the Small Enterprise Development Agency (SEDA), 40% of small enterprises and 72% of microenterprises in SA are owned by women.

Sipho Pityana, president of Business Unity South Africa (Busa), acknowledged during his keynote address at the SME Indaba held earlier this year that while the SME sector has an important role to play in growing the economy, these small enterprises are not always favoured. In addition, SMEs are often burdened with challenges such as access to funding, lack of access to markets, inadequate skills, uncompetitive regulatory frameworks and technological disruptions.

What Pityana said rings true because a lot of SMEs are struggling, and many (around 50%) close their doors within five years of opening. Despite being so integral to the economy, these small entities are somewhat neglected, not always receiving the support or funding they need to grow and to thrive. Big business, having realised this, has upped its game, with many organisations running business development programmes for SMEs – often for women-owned SMEs specifically.

Phumzile Chifunyise, enterprise development manager, SAB and AB InBev Africa, says there is a need to formalise women-owned businesses into formal markets. ‘In the case of beverage manufacturing, there are still a lot of women-owned businesses that are operating at the level of markets for example, and don’t always get to grow into bigger markets of supplying retail chains or even exporting out of the country.’

She adds: ‘We need to be more aware of the status quo in terms of understanding how much of our supplies are from women-owned businesses. Through exercises like this, we can start putting strategies in place to increase that representation.’

SAB has a women-focused enterprise and supplier development (ESD) programme in place to address this. Lerumo, powered by SAB KickStart, is targeted at black women running SMEs in the beverage manufacturing industry, with the intent to help them thrive in commercial markets and grow as a result. Last year, 32 women entrepreneurs benefited from the programme. ‘We are challenging ourselves to leverage on our expertise and efficiencies as a beverage manufacturer to assist women-owned small businesses to gain access to channels that they have difficulty in accessing on their own. On offer is business coaching, access to industry insights, operational investment opportunities and market access. You just need to be willing to put skin in the game to unlock opportunities,’ says Chifunyise.

Suzanne Ackerman-Berman, transformation director at Pick n Pay, says entrepreneurs tend to be creative innovators who want to push boundaries. ‘They don’t always have the necessary business skills to grow their businesses and too often we see small businesses struggle because, for example, they have given away too much equity in exchange for capital or paid too much, or because of onerous compliance processes – something that our government really needs to change quickly,’ she says.

There is always more that can be done to advance small business in SA, Ackerman-Berman continues. ‘Big business has the skills, expertise and access to market that can facilitate and provide the necessary help needed to bring more small players into the formal sector,’ she says. ‘The key to success is opportunity. That’s where we focus our efforts. Some 46% of people in our ESD programme are women.’

Nyanga businesswoman Khosi Liwani was thrilled that she could take her business to the next level with the spaza modernisation programme, a collaborative effort by Pick n Pay and its partners. First piloted in 2016, the programme has to date opened 18 stores in Gauteng and three in the Western Cape. It combines the traditional spaza store format with cutting-edge systems and retailing techniques to create a township shopping experience never seen before.

Liwani’s Cape Town spaza store, Ndwamba Market, received new refrigeration and IT systems and will now stock more than 1 000 lines of edible and non-edible groceries, fresh produce and perishables. Services such as money transfer, ticketing, airtime and data, bill payments, lottery tickets and prepaid electricity have also been added to its offering. Liwani’s staff, meanwhile, received expert training in IT systems, customer service and hygiene, as well as other skills.

Heather Lowe, head of enterprise development at FNB, says that from an ESD perspective, the bank aims to include specifically black-owned, female-run businesses in all its initiatives, to meet both gender and transformation where possible. FNB’s commitment to growing women-owned and -led businesses in SA has seen it enter into partnerships to facilitate mentorship for promising enterprises. The bank enables qualifying women-owned businesses in their growth curve by assisting with transacting, lending, investing and insuring solutions. This includes facilitating business registration online via the FNB registrations system (which links to CIPC) and to instant accounting and payroll solutions.

It also extends to support in the incubation stage of selected businesses through Vumela. Established in 2009 by FNB Business Banking, Vumela aims to plug the holes in SA’s current SME support and funding landscape. R588 million in capital has been raised from investors through this programme to date.

Enterprise and supplier development incubation organisation Black Umbrellas collaborates with the private sector, government and civil society to address the low levels of entrepreneurship and the high failure rate of black-owned emerging businesses in SA. The programme focuses on nurturing and supporting 100% black-owned businesses in the critical first three years of their existence through the provision of nationwide incubators. It currently has nine incubators across SA, and more than 1 500 businesses have thus far been assisted.

Black Umbrellas CFO Nyasha Madavo says that if SMEs are to survive and thrive, they need a supportive ecosystem in which to operate, supported by conducive legislation, regulations and policy. ‘We simply have to make it easier to set up a business and get going.’ SMEs also need access to affordable funding to enable their growth and capital investment plans, she adds. ‘Many entrepreneurs are self-funded, and challenges around not having collateral and having poor credit ratings continue to impact black-owned SMEs in particular. We need to find innovative solutions to address these challenges.’

One of the ways in which SA’s automotive industry plans to grow is by transforming the automotive value chain – in particular, increasing the participation of black-owned suppliers. Toyota has a broad objective to develop black-owned and black women-owned suppliers in its value chain – be this through financial support, mentoring, structured process improvement programmes or training.

The vehicle manufacturer recently selected just such a company, Imvusa Interior Trim, owned and managed by Judith Serafim, to be a Tier 1 supplier (Tier 1 meaning the supplier sells a finished product to Toyota). The carmaker says the interior trim commodity is one in which there is room for another supplier to allow competition and increase the number of small black-owned businesses. As such, they are doing everything they can to ensure that Imvusa is successful – and Serafim along with it.

Apart from financial support and skills training, there is broad agreement that the ongoing mentoring of women SME owners as they grow their businesses is vitally crucial. ‘Surveys that I have studied show that 80% of executives said they received some form of mentorship. In other research, 93% of start-ups admit that mentorship is instrumental to success,’ says Dee Pillay, Training and Transformation Business Solutions director. ‘Experience is a very expensive asset to acquire yet it’s crucial to business success. Mentorship is one guaranteed way to gain that experience from others. A successful mentor will also have an unlimited network of people who can benefit your business,’ she says.

‘Self-confidence is very important to success for entrepreneurs, and a mentor who has experienced the highs and lows of running a business is in the perfect position to give positive and encouraging words of advice. And not only do they have the right words to share, they would also have ideas to help you navigate your way to success.’

By Toni Muir
Image: Muti