SME Age in South Africa
Following our previous post regarding how SMEs are contributing to employment in South Africa, we consider SME age and how long SMEs survive, below. Currently, SMEs are not making a material difference to employment in South Africa as most SMEs are less than 5 years old and have not survived long enough to make a significant contribution to employment.
Source: SME South Africa, An Assessment of South Africa’s SME landscape Challenges, Opportunities, Risks and Next Steps, November 2018.
According to SME South Africa, just 15% of SMEs in the country are more than 5 years old. Furthermore, several papers note that between 70% - 80% of small businesses fail within five years.
When we include micro enterprises (i.e. SMMEs instead of just SMEs), figures from SEDA suggest that 57% of SMMEs are more than 5 years old. While this is an improvement, micro enterprises are usually smaller and therefore have limited impact on employment. Therefore, we need more SMEs to be sustainable in the long term if we want to see a material impact on the economy and unemployment.
Being able to monitor the financial health of your business is key to ensuring its sustainability. Boraine Consulting assists SMMEs with a full suite of accounting, tax and consulting services. Our focus is on improving the sustainability of SMMEs through financial literacy and empowering SMMEs with tools and information to make sound financial decisions about their businesses.
If you’d like a consultation, contact us at firstname.lastname@example.org
Additionally, click here for a free health check of your business.