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Supporting small business remains a business imperative

Supporting small business remains a business imperative

Nedbank has released its latest quarterly results to coincide with Small Business Friday on 5 September – a symbolic day that seeks to galvanise everyone in South Africa, including consumers, to support small businesses and 'Vote Small Business'. In addition, this release of results will culminate in the last 2014 SimplyBiz seminar on the day at Montecasino, Johannesburg, showcasing prolific and award-winning South African comic, John Vlismas.

Small Business Friday™, which was launched in 2012 by Nedbank in association with the National Small Business Chamber (NSBC), continues to gain momentum and raise awareness of the important role small businesses play in the South African economy and in the creation of a vibrant society. Nedbank continues to support small, medium and large enterprises through various initiatives. These include the NSBI, a tool for the SME, private and public sectors to engage on issues pertaining to small business and, notably, to guide small businesses in taking business decisions

According to the latest results of NSBI, overall business confidence in the small-business sector improved slightly in the second quarter to 46,5 points from 45,3 in the previous three months. This is in line with the latest economic growth figures that show that the economy improved only marginally in the second quarter.

'It is encouraging that respondents recorded an improvement in both their current and future financial outlook to 5,3 and 6,0 respectively, compared with 5,1 and 5,9 in the previous quarterly results. Furthermore, they also expressed increased business confidence with regards to current operating costs and the health of cashflow,' says Busi Radebe, Economist at Nedbank.

'The NSBI is an important tool in the bank's efforts to support the sector and help create an environment where small businesses can thrive. We believe that gauging current sentiment among small-business owners will serve as a catalyst for a mutually beneficial dialogue with all roleplayers, including government, the private sector and the public.'

'It is in this spirit that Small Business Friday™ was conceptualised – to encourage consumers and large businesses to keep small businesses top of mind when making purchases in their communities. With a specific view to addressing the issues of late payment and cashflow that many small businesses were challenged with in 2013, as outlined in the NSBI, Nedbank became the first signatory to the Prompt Payment Code™, an initiative by the NSBC that encourages organisations to pay small businesses within a maximum of 30 days from receipt of invoice. As a bank for small businesses we have taken this a step further, and pledge to pay businesses with an annual turnover of less than R5 million within seven working days when all requirements have been met,' says Alan Shannon, Head of Relationship Banking and Sales.

Radebe notes that, on the downside, small-business owners voiced concern over the level of support being provided by both government and the private sector. Government support fell to 2,0 – a record low and marking a continued decline over the last year while the role of the new Ministry of Small Development was met with mixed feelings.

Other concerns were challenges with procurement opportunities from the private sector and factors such as the reduction of red tape, financial assistance and tax rebates for small businesses from government.

However, the results did show increased confidence about the possibility of expansion into other African markets and further afield, with the confidence level rising to 37% from 28% in the previous three months. This is a positive development given the view stated in 2013 that businesses were struggling to break into new markets.

Despite optimism surrounding the possibility of expansion, the employment market within the small-business sector remains stagnant.

'In light of the fact that the SME sector employs two-thirds of the workforce, it is evident that the future of our economy – and the solution to unemployment – simply lies in helping more small businesses grow and thrive through active support,' says Radebe. 'Think about it this way – if one million of the estimated 2,8 million SMEs could employ just one person, one million additional jobs would be created.'

'A collaborative framework with all stakeholders cannot be overstated for ensuring that we work towards sustainable economic growth and deliver on the objectives set out in the National Development Plan (NDP), which seeks to address some of the gaps experienced by the SME sector,' concludes Radebe.

Nedbank once again invites everyone – from government and consumers to large corporates – to support small businesses on 5 September and beyond.

 

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