SMME owners: Vast number suffer from anxiety and depression

The impact of the Covid pandemic contributed to the decline of South Africa’s small, medium and micro enterprise (SMME) sector and the wellness of those driving the SMMEs has also taken a knock, with lack of confidence, burnout and higher suicide rates, according to Monique Schehle, strategic insights consultant at Momentum.

68% jobs in SA

Reflecting on the latest SMME study Momentum has undertaken, in collaboration with the University of South Africa, Schehle yesterday said while the total sector estimate stood at 2.4 million businesses – providing 68% jobs in the country – 1.6 million remained informal.

“Operating informally precludes a large chunk of the SMME sector from accessing key services and benefits – like assistance from banks and government institutions, due to nonexistence of documents.

“Due to lack of information, the bulk of the SMME sector has been reluctant to formalise, making it difficult for the government to make policy decisions aimed at supporting them to grow,” said Schehle.

NOW READ: Lockdown sees SMMEs countrywide suffer, survey finds

The study found that:

-Panic, anxiety and depression – key to the destruction of startups – was common among entrepreneurs.

-Tight deadlines, loss of important clients, new competitors, lack of resources, failures, resignations and new laws and regulations were often the source of panic and failure.

-71% of entrepreneurs either agreed or strongly agreed with the statement: “It is a big responsibility to ensure this business can pay its employees.”

-Several South African entrepreneurs were forced into entrepreneurship due to unemployment, leading to many being unskilled or unprepared to enter the world of self-employment.

Doing it themselves

Said Schehle: “What we saw this year, in looking at the health of entrepreneurs, was that they have started to realise that they have to start doing it for themselves. Neither the government nor the private sector was going to do it for them.

“The first [advice] we gave was to ensure that they have the necessary support network around them to look after themselves.

“We also found that those driving the SMME sector were so much focused on making success in whatever small ventures they were involved in that they failed to look after their health.

“This has led to a growing lack of confidence, burnout and higher suicide rates.

“If the SMME sector, which is the backbone of the economy fails, then the whole economy crumbles. The first thing is self-care, taking time in your busy diary to invest in yourself – health, education and skills – because passion alone cannot get you very far.”

On what people could do to support the SMMEs, Schehle implored South Africans to “shop locally and for entrepreneurs to make good use of social media”.

Economy needs SMMEs

“The economy needs SMMEs to grow. Getting financial advice is also crucial.

ALSO READ: Future of SMMEs looks bleak as 90% struggling or closed due to virus

“SMMEs currently don’t have a sense of value in getting financial advice. They [need] business and financial advice – knowing how to bring the two together, especially if you are a micro or small enterprise.

“You may not know how to do a business or marketing plan – a crucial part in any enterprise,” said Schehle.

“Given an opportunity, they would rather work for an employer than become entrepreneurs. Loss or inadequacy of current income sources, results in [anxiousness].

“Sixteen percent of entrepreneurs we interviewed indicated that they started their business due to financial pressures, while 9% started because of being unemployed.”

– brians@citizen.co.za