Department confident it can reverse small business failure

Department confident it can reverse small business failure

The Department of Small Business Development is working towards reversing the high failure rate of new small businesses.

“We are determined to create a conducive environment for the development and growth of small businesses and cooperatives through the provision of enhanced financial and non-financial support services, competitiveness, market access, promotion of entrepreneurship, advancing localisation and leveraging on public and private procurement,” Minister of Small Business Development Lindiwe Zulu said.

Speaking at the 2014 Consumer Goods Council Summit in Midrand on Tuesday, she said her department was concerned that small businesses had a high failure rate.

“Researchers tell us that the failure rate for new businesses is almost 80 percent in the first year, and only about half of those who survive remain in business for the next five years.

“We are confident that together, we will be able to help reverse this trend,” Minister Zulu said.

She said her department would lead an integrated approach on the promotion and development of small businesses and cooperative through a focus on the economic and legislative drivers that would stimulate entrepreneurship to contribute to radical economic transformation.

“Together with our partners in government, we will create a conducive environment for the success of small enterprises and cooperatives and to provide a market for these enterprises through public procurement,” Minister Zulu said.

The Department of Small Business Development had developed a number of programmes that would assist small enterprises and co-operatives.

The programmes included centres for entrepreneurship, micro franchising, incubation support and cooperatives supplier.

Other programmes included red tape reduction which was aimed at addressing the regulatory burden and B’avumile skills, an enhancement programme aimed at enhancing the skills of women to produce quality and commercially viable cultural products for participation in major local and international markets.

“For the SMMEs and Cooperatives to play their envisaged role in the development of the economy, we must take into account that the issues of standards and quality go hand in hand with the development and growth sustainable enterprises,” she said.

Minister Zulu said consumers would not buy goods that were not of good quality.

“Even for the local market, products and services need to comply with certain compulsory technical regulations either set by government or private specifications set by those who procure these products and services,” she said.

Minister Zulu called for small enterprises to comply with both local and international standards.

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