February 23, 2007, 16:30
The survival of the small businessperson in a township and rural areas could rest on franchising. The demise of thousands of small businesses in these areas started after the introduction of giant shopping centres around 2000, resulting in a number of small businesses going under.
The Small Enterprise Development Agency (Seda) says SMME's are responsible for over 75% of the country's GDP and are responsible for the employment of over 40% of the country's population. However, during its franchise information workshop held in Nelspruit recently, Seda says this contribution could be threatened unless small business people franchise to bigger companies.
The Kabokweni Shopping Complex near Nelspruit is nearing completion but neighbouring shops could be threatened with closure when it opens. A businessman in the area says the opening of the new complex will take his business away and will force him to close shop.
Other businesses elsewhere have already gone under. Ten years ago, in Bushbuckridge alone, over 1 000 shops closed down in the Green Valley area and 50 other small shops in Nkomazi were forced out of business, when the KaMaqhekeza Shopping complex opened in 2001.
The workshop made it clear that the survival of the small businessperson depended on accepting and understanding franchising. Mfundo Thango, a franchise management consultant, says: "The product that you are selling has been tried and tested and has been found to be what the market has been appreciating. If I just buy my small tuck shop I will never know whether the skill that I have will complement the product that I want to sell."
Some are not even sure whether franchising is the right choice. Richard Mkasi, a concerned businessperson, says: "To franchise is a good thing. But it will not help all of us to fall under one franchise because the small shops around the area they cannot close down and fall under one big shop."
The Seda in Mpumalanga says problems will always arise if people are not trained. Most of the problems are related to a lack of skills in business management. Ntokozo Majola, the Seda provincial manager in Mpumalanga, says Seda has become a lifeline for some small businesses. Another workshop will be set up to discuss survival strategies.
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