Factors that affect the survival, growth and success of small Black businesses in South Africa.

Abstract

The purpose of this research was to assess the factors that affect survival, growth and success of black owned small businesses in South Africa. The study was motivated by the need to understand and implement some of these factors to the survivalist and micro enterprises in South Africa who are struggling to survive beyond the 3-year mark. A range of literature was reviewed including journals and research papers on the subject of SMMEs, government papers and acts, to help understand the dynamics of the SMME sector in South Africa. Primary data was collected in the form of a questionnaire which was given to twenty (20) black owned SMME owners whose businesses have been in operation beyond 5 years, in order to get their views on the factors which contributed towards their survival and growth. The 4 key findings of this study are that firstly, small black business owners consider the 4Ps of marketing in making business decisions for maximizing sales revenue. Secondly, without the strategies to handle the five forces identified by Michael Porter, any business would ultimately find itself pushed out of the market and ultimately shut down. Thirdly, whilst induction training for the staff is generally carried out in successful black owned small businesses, ongoing staff training and development is very limited in black owned small businesses. Finally, customised and updated business theories still play a practical role in contributing to the survival, long term growth and success of black owned small businesses. Some of the recommendations made by this study are that: there is a need for a qualitative definition of small businesses in South Africa, that would translate to updated theories which cater for the different cohorts of small businesses. The study also recommends that that there is a need for the transfer of research and development to both black owned SMME staff as well as to survivalist and micro enterprises in order for them to be able to emulate the pockets of excellence from the successful black owned enterprises.