An analysis of business interventions and their effect on the perceived success of South African small and medium enterprises

Abstract

A prestudy by the author of the assistance available to small business owners in South Africa revealed that although much assistance is available, many small businesses still fail. The question that arose was whether small business owners are receiving the proper assistance in respect of the right functional areas of the business, for the appropriate duration, at the right stage of the business life cycle and by the right people. Taking all these issues into account, the main purpose of this study was to determine what types of business interventions have the greatest impact on the success of entrepreneurs and small and medium enterprise owners. The literature study includes the history of small business development in South Africa and the interventions that have taken place in this and other countries. It also provides a definition of a successful small business and the generic business needs of small business owners. The sample used in this study was drawn from the members of the Confederation of Employers of South Africa (Cofesa). The research findings of this study are reliable for the SME owners who are members of Cofesa. The Cofesa group is not representative with regards to demographics, location, economic sectors or qualifications of South African SMEs. The following are some of the findings of the study of successful small business owners: * They generally make use of assistance in the areas of finance, marketing and human resources. * Most of them make use of assistance on a continuous basis during all the stages of the business life cycle, suggesting the way forward for aspirant business owners who should start making use of assistance even before starting their businesses. * Consultants or business specialists are mainly used for assistance. * More than two-thirds of the business owners thought that their businesses were more successful after they had received assistance. * The assistance was neither the cause of failure nor was it the main cause of their success. Assistance is a contributing factor to success but not the main reason for it. The success of a SME will depend mainly on other factors such as type of product, product quality and marketing. Assistance, however, proves vital and should first be provided for the areas as identified by the respondents in this study (mainly finance, marketing and human resources).