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How adaptable are SA’s entrepreneurs?

How adaptable are SA’s entrepreneurs?

From the future of jobs and cyber threats, to political and societal turbulence, small business owners in South Africa are confronting numerous external challenges as they try to grow their operations, according to the newly released GoDaddy Global Small Business Research Survey.

Even with these challenges, South African small business owners remain optimistic, with 76% reporting they expect to grow at least 25% in the next three years.

One of the biggest issues facing workers globally is the rise of automation, artificial intelligence and robot disruption that raises concerns about the future of jobs. However, the vast majority of small business owners in South Africa believe they are insulated from those risks. A healthy 70% felt protected against job loss from these technology developments.

While technology disruption is likely to pose challenges, it also can reduce the barrier to entry to create a small business. While only half of South African small businesses reported either having their own website (28%) or are planning to build one soon (22%), around 42% said they rely solely on social media platforms. Interestingly, South African small businesses were least likely to have a website among the countries in the survey and the most likely to rely on social channels.

Almost half (46%) of South African small businesses cited political instability and social turbulence, including economic, technological or cultural factors as a major challenge to their growth prospects. Around one third (34%) identified insufficient investment as a significant obstacle to growth, followed by failure to keep up with technology (20%) and cyber-security risks (13%).

“Small business owners in South Africa are optimistic and resilient in the face of external headwinds,” said Stefano Maruzzi, vice president for EMEA at GoDaddy. “As they face a swirl of technology and political change, we aim to provide them with the support and affordable online tools they need to adapt and prosper. By lowering the technical and financial barriers to entry that small business owners and entrepreneurs face in setting up their own websites, we can help them take their growth to new levels.”

Half of small South African respondents without a website cited affordability as the main reason they do not have one, while 28% attributed this to their lack of technical expertise. Owning a website, however, has an impact on business outlook and reach, according to the survey. Among the global respondents, 67% of those with a website expected to grow at least 25% in the next three years, compared to 56% of small businesses that don’t have a website, resulting in more small business owners who do have a website believing they will have increased growth.

While few small businesses (7%) in the South African sample reported being victims of a cyber-attack, for those who did, the consequences were severe. Those who were attacked reported that it shut down their business for some time, customers couldn’t reach them, they had to spend money to repair systems, and they lost access to accounts needed to service their customers.

Besides looking at how businesses are adapting to change, the GoDaddy Global Small Business Research Survey also looked at the attitudes of small business owners. Here are some of the key findings:

  • Small business owners in South Africa value the flexibility of running their own business, with nearly half (48%) saying it’s the best aspect of being an entrepreneur. For 13% of respondents, the money they can make is the biggest plus of running their own small business, while 12% cited helping the world to solve a problem.
  • On the flipside, 32% said that risk of failure and uncertainty about the future is the worst thing about being a small business owner.
  • Encouragingly, 91% of South African respondents said they would start their own business if they had to make the choice again knowing what they know now, and 84% reported they are happier since becoming an entrepreneur.
  • The skills shortage is a major challenge for small South African businesses, with 76% saying it is somewhat hard, hard, or very hard to find talented workers.
  • 57% of small South African businesses serve mostly local customers (within 80 kilometres of their location) and only 10% serve mostly international customers.
  • 41% of small business owners worked for a corporate employer before setting up their own venture; 26% were working for a small business; 16% were unemployed; and 16% were students.
Notes:

The GoDaddy Global Small Business Research Survey was conducted in April and May 2019 in Australia, Canada, Germany, Hong Kong, India, Mexico, South Africa, Turkey, United States, and the United Kingdom. Research firm Savanta conducted the field research of the 4,505 small businesses in the countries. The South African respondents comprised companies with less than 25 employees.

For more information about how GoDaddy can help your venture online, visit godaddy.co.za

*Must read: Business benefits of internet tools and platforms click here.

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