World Entrepreneur Day (21 August) is a perfect opportunity to celebrate the role South Africa’s Small & Medium Businesses play in job creation and economic growth. But it is also a time to reflect on what needs to be done to help them grow and thrive – entrepreneurial spirit, drive and passion are essential but not enough on their own.
Small & Medium Businesses are losing £13,780 per second globally (The cost for South Africa is R231 per second) as a result of unproductive, admin-heavy tasks. Economic research conducted by Plum Consulting and Sage shows that our small businesses are being drained of important resources through unnecessary admin, wasting an average of 120 working days, accounting for around 5% of the total manpower.
In South Africa, a 5% increase in productivity could lead to an increase in gross value added (GVA) of over R9.5-billion. This would be partly achieved by reducing time spent on business admin and taking a better approach to adopting technology and using it to streamline time-intensive tasks. This, in turn, could help start-ups to survive longer, grow faster and evolve into job-creating scale-ups.
Bear in mind that half of start-up businesses fail in their first 12 months. And the burden of admin – unnecessary time which would be better spent investing in growth – is commonly cited as one of the top reasons why. Using technology is the key to unlocking this untapped productive time from our nation’s businesses.
We will face many obstacles before we can unlock South Africa’s full productivity potential. Many business owners I speak to emphasise just how burdensome bureaucracy is for them, and how much it distracts them from growing their businesses. Expense reports, invoicing, payroll and constantly chasing for late payments are not activities that should dominate an entrepreneurs’ time in 2018 and beyond.
As the global economic climate becomes increasingly competitive, growth from small businesses will only accelerate if we truly adopt a digital-first agenda. If we could redirect some of the 120 hours spent on basic administrative tasks back into innovating, attracting customers and growing revenue, we could make real headway in closing the global productivity gap.
Our future economic success hinges on the success of our businesses today. There is a real opportunity for our policymakers to investigate where regulatory frameworks are hindering progress and to make changes that boost our country’s competitiveness. Targeted intervention to build a thriving and productive landscape should be the main priority of every layer of government.
A focus on digital skills and not just infrastructure, a simplification of business taxes coupled with making greater use of local businesses as suppliers to government are important steps to help businesses flourish. By championing and enabling our local businesses in the right way, our economy will be truly poised for growth.