Shoprite report finds 42% of small businesses say they are growing
The survey of 800 SMMEs found the share describing themselves as expanding rose by a third on last year, while fewer than half are growing at all.
Forty-two percent of South African small, medium and micro enterprises describe themselves as growing and expanding, according to the Shoprite Group’s latest State of the SMME in South Africa report. That share is up by 33 percent on last year, but it still means fewer than half of the businesses surveyed report growth.
As eNCA reported on 21 September, the findings rest on research among 800 businesses carried out by World Wide Works. The report also found businesses that have been trading for more than 20 years and employ up to five people.
Shoprite Group’s Maude Modise said small businesses are staying the course. “At scale, however, is still an issue,” she said. “There is an opportunity to start a business. People are starting businesses.”
What the numbers measure
The 42 percent figure is a self-description. Businesses were asked whether they consider themselves to be growing and expanding, not audited on turnover, profit or headcount. That makes it a measure of how owners read their own trajectory, which is useful for sentiment and weaker as a hard count of output.
The 33 percent movement is a change in that self-description, not a third more revenue or a third more businesses. Read together, the two numbers say confidence has improved while the majority of firms still do not place themselves in the growing category.
The finding that some businesses have traded for over two decades while employing up to five people points to the other side of the picture. Longevity and scale are not the same thing in South African small business, and the report’s own framing says so through Modise’s remark about scale.
Why scale is the hard part
A business that has survived 20 years and still employs five people is a stable livelihood. It is not yet a firm that adds jobs in the numbers the country needs. The gap between starting and scaling is where most of South Africa’s small business policy debate sits, and it is the gap this report describes.
For an ordinary reader, the practical meaning is narrow and worth stating plainly. More small business owners say things are moving in the right direction than a year ago. Most still do not. The constraint the report’s own spokesperson names is not whether people can start, but whether they can grow once they have.
The source
The research was commissioned by the Shoprite Group, a listed retailer with a direct commercial interest in the informal and small business market it supplies and buys from. That does not make the findings wrong. It does mean the report is a company’s own view of a market it trades in, and the figures should be read as such alongside independent data on SMME turnover and employment.
Source: eNCA, Small businesses are making big money - Shoprite Group report.
