Time to innovate and look for new opportunities in sector, value chain.
This is according to a small, medium and micro enterprises (SMME) business expert.
The SMME sector experienced an adverse impact from the pandemic when government placed the country under severe lockdowns restrictions to reduce the spread of the virus, leading to the closure of many businesses classified as nonessential.
According to Statistics SA 2019 figures, SMMEs generated R2.3 trillion (22%) of the R10.5 trillion (68%) revenue attributed to the formal business sector.
Shawn Theunissen, head of leading business accelerator Property Point, said while the environment for SMMEs remained challenging, there was enough scope for the sector to operate successfully.
“The small business is the fastest-growing business segment of the economy, hugely contributing to the total
country revenue,” he said.
“Data shows us that SMMEs are playing an increasingly important role in the South African economy and we believe that the focus for many businesses will be keeping the lights on in this current sluggish economy,” he said.
“Surveys have revealed that up to a third of SMMEs went out of business due to the lockdown and entrepreneurs will have to remain highly vigilant if they want to survive during these times.”
While upbeat about future business growth, Theunissen said South African industries still had a long way to go before
reaching levels of production, seen before the pandemic.
ALSO READ: Repo rate expected to stay the same, economic outlook revised for SA
The economy remained more than 5% smaller than it was at the end of 2019.
Giving an outlook of the sector for 2021, Theunissen said SMMEs had good reason to be buoyant.
“While large business increased turnover by 5.4% per year, medium business increased by 8.4% and small business by 12.3%.”
Saying SMMEs must optimise cash flow in the short to medium term, Theunissen added that they would have to “innovate and look for new opportunities in their sector and value chain”.
For more news your way, download The Citizen’s app for iOS and Android.