Small businesses in South Africa face significant risks, with over 75% encountering failure or bankruptcy, according to Vuyelwa Nyakaza, Managing Director of Sukume Consulting.
Nyakaza noted that although the SME sector contributes 39% to the country’s GDP, the failure rate ranges from 50% to 95%, depending on the industry.
She emphasized the importance of proper research and consultation for prospective entrepreneurs.
“A lot of the issues affecting entrepreneurs have to do with lack of ideas and skills or enough knowledge and in some cases what are the basic things it takes for an entrepreneur to succeed in this space and so, statistically, the first three years of a business, 75% of businesses don’t make it and a high part of it is because of the skills issue, financial management,” Nyakaza.
VIDEO | Challenges facing small businesses in South Africa: