Perceptions towards entrepreneurship education, and entrepreneurial success of informal hairdressing salons owners in Richards Bay, KwaZulu-Natal.

Abstract

South Africa is seen as the economic powerhouse of Southern Africa and it is critical that strong economic growth is achieved on a sustainable basis to alleviate poverty and unemployment. Small to Medium Enterprises (SMEs) have played a key role in achieving sustained economic growth in South Africa and their success going forward will assist with driving growth. This will ensure that employment is created, and prosperity will increase in South Africa and the region. However, SME’s face hurdles to growth of which access to finance is a major constraint. This study aimed to unpack the different aspects of the financial obstacles that SMEs face as well as role of alternative stock exchange platforms in promoting the growth of SMEs in the South African economy. The study was qualitative in nature and was approached from a SME’s perspective. Data was collected by conducting one on one interview with the SME’s top management after which the data was analysed using NVivo, a computer data analysis programme. The study highlighted several challenges that SMEs faced when raising finance for capitalisation. The main challenges were poor financial management which lead to cash flow constraints and business failure, weak business management skills which undermined the quality of and understanding of business plans and a lack of sufficient collateral. The lack of quality training was also found to compound the challenges to gain financing for SMEs. The opportunities leading from the study suggest that entrepreneurs have the potential to improve their chances of accessing finance by enrolling in entrepreneurial and business management studies, thereby learning to overcome poor financial management, and improve their business management skills. Additionally, mentoring programs will be useful for training entrepreneurs in practical business management skills and collateral shortfalls may be overcome by accessing government led schemes assistance for working capital.