With International SMEs Day rolling around again on the 27th of June, light is shone on the role of Small-, Micro- and Medium Enterprises (SMME) across the globe. Driving economic growth, innovation and job creation, they are vital spokes in the economic wheel that keep our lives moving forward.
Back in 2017, on 6 April to be exact, the General Assembly of the United Nations (UN) resolved that 27 June would be Micro, Small and Medium-sized Enterprises Day. The UN uses international days to educate the public about important issues, causes and individuals. Likewise, for this particular day, the motivation was to create awareness of the important role that SMMEs play in the global economy.
It’s calculated that over 90% of all businesses worldwide are SMMEs. In South Africa alone, there are more than 2,6 million businesses that fall into this category.
Small and Medium-sized Enterprises Have an Important Role to Play
SMMEs face many challenges. From the cost-of-living crisis and climate change to a lack of skills development and funding. Yet, they aren’t discouraged and continue to persevere. What’s more, entrepreneurs are change agents within their communities addressing important social issues such as poverty and unemployment.
These enterprises do the following:
- Drive economic growth by stimulating the economy through the sale of their products and services, as well as the purchase of goods and services they need to run their businesses.
- Create employment, especially for vulnerable groups such as women and youth. Entrepreneurs create jobs through self-employment and providing jobs to others when their businesses grow.
- Develop skills as employees are forced to wear many hats in a small enterprise, serving multiple functions all at once.
- Encourage innovation by providing a variety of products and services, and encourage creativity and development of new products.
- Increase export potential by gravitating towards products that are suitable for the export market.
- Improve local conditions due to their deep roots in local communities.
Challenges Faced by Small and Medium-sized Enterprises
The UN hopes that the 2024 International SME Day will be a platform to discuss and exchange “ideas on how key stakeholders, including policymakers, large companies, financial institutions, and the international community can support micro-, small and medium-sized businesses.” The aim is to advance the 2030 sustainability goals that the organisation has set, including alleviating poverty and developing decent work for all.
The belief is that if small to medium-sized enterprises are empowered to overcome their challenges, they can help reach this goal.
Some of the challenges that they currently face are:
- A lack of funding or access to funding.
- Skills shortages that prevent their businesses from growing.
- Struggling to understand and navigate the regulations across various industries.
- A lack of infrastructure and the high costs of renting or improving infrastructure.
South African SMEs have further specific challenges that they face.
One of the major factors impacting them is the energy crisis that South Africa is experiencing. Businesses are confronted with high electricity costs and a lack of supply. Without sufficient electricity, stores that rely heavily on electricity such as running fridges or operating machinery need to turn to alternative energy supplies such as generators and battery banks. Using these power sources can become a costly endeavour that negatively affects SMEs‘ profit.
There is also a high transportation cost involved for products as well as obtaining inputs. Escalating fuel prices and inadequate railway networks contribute to the expensive transportation that businesses and consumers need to pay.
It’s clear that SMEs have a lot to overcome to make a business successful. That is why SME South Africa supports South African SMEs by bringing them relevant and useful information that helps them start, manage and grow their businesses. Furthermore, we also created our SME Advice platform as a way to engage with experts across various industries. Here, entrepreneurs can engage with industry experts on the forum, read insightful blogs and watch webinars with interesting speakers.
SMEs can also explore SME Brief, our newsletter library. This platform is a one-stop-shop full of important advice, resources and articles, presented in a newsletter archive.
Furthermore, SME South Africa supports its business by providing them with access to a directory of experts through the award-winning consultation-on-demand platform, SME Advice.
Take a look at how these tools can benefit you today!
