Top 4 Factors limiting the growth of small business in South Africa.
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Much is to be done to improve the business environment in South Africa in order to harness the growth of small firms. In this article we analyse the factors limiting the success and growth of small businesses in South Africa.
Improper record keeping
The improper record keeping comes as a result basically of inadequate education and training in business; because of this a firm loses track of its cash flows and in turn leading to cost control and liquidity problems just to name a few. If the records of the transactions a business undertakes are not kept properly, growth cannot be achieved since the firm loses track of where it is heading.
Professional advice and consultation
Improper professional advice and consultation is a factor limiting small business growth. Professional advice provided include that from lawyers, banks, consultants and so on. Advice commonly sought is in the areas of financial management advice, market research, business strategy, public relations and advertising and personnel and recruitment matters. The key point here is showing how these services influence the growth of small firms. Small businesses which seek advice from professionals are better performers than firms which never used advice from outside sources
Competition
Competition on the other hand is also as a barrier to growth. The nature of the market into which a firm operates is a key influence upon its growth .Low growth firms seem to have the poorest understanding of their competitors.
Technological barrier
Furthermore, another factor limiting the success of small firms is technological barrier. The firms that adopt modern technological tools in their business are more likely to cause the business to grow faster than small business without modern technological tools .This is basically because modern tools enable efficiency and effectiveness to be achieved in doing business, therefore saving money, time and energy .