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 \nin South Africa revealed that although much assistance is available, many \nsmall businesses still fail. The question that arose was whether small \nbusiness owners are receiving the proper assistance in respect of the right \nfunctional areas of the business, for the appropriate duration, at the right \nstage of the business life cycle and by the right people. Taking all these \nissues into account, the main purpose of this study was to determine what \ntypes of business interventions have the greatest impact on the success of \nentrepreneurs and small and medium enterprise owners. \nThe literature study includes the history of small business development in \nSouth Africa and the interventions that have taken place in this and other \ncountries. It also provides a definition of a successful small business and the \ngeneric business needs of small business owners. \nThe sample used in this study was drawn from the members of the \nConfederation of Employers of South Africa (Cofesa). The research findings \nof this study are reliable for the SME owners who are members of Cofesa. \nThe Cofesa group is not representative with regards to demographics, \nlocation, economic sectors or qualifications of South African SMEs. The \nfollowing are some of the findings of the study of successful small business \nowners: \n* They generally make use of assistance in the areas of finance, marketing \nand human resources. \n* Most of them make use of assistance on a continuous basis during all the \nstages of the business life cycle, suggesting the way forward for aspirant \nbusiness owners who should start making use of assistance even before \nstarting their businesses. \n* Consultants or business specialists are mainly used for assistance. \n* More than two-thirds of the business owners thought that their businesses \nwere more successful after they had received assistance. \n* The assistance was neither the cause of failure nor was it the main cause \nof their success. \nAssistance is a contributing factor to success but not the main reason for it. \nThe success of a SME will depend mainly on other factors such as type of \nproduct, product quality and marketing. Assistance, however, proves vital and \nshould first be provided for the areas as identified by the respondents in this \nstudy (mainly finance, marketing and human resources).

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