Unemployment, poverty, high levels of illiteracy and low levels of production are some of the reasons as to why the South African economy is weak against foreign competition. South Africa is struggling to attract and preserve foreign investments. Thus, there exists a need for entrepreneurial skills from individuals to develop, support and motivate others to increase the productivity in this country. Starting a small business and operating it effectively comes from the need to build a culture for business development. This includes the ability to preserve, be goal driven and be part of social corporate responsibilities. One of the most sustainable methods of creating employment is through creation and development of entrepreneurial skills that will lead to an increase in the labour market and eventually decrease the unemployment rates. The focus of this article will be to provide a better understanding of Small Medium Enterprises (SME) operations in South African market structure as well as ascertaining the extent to which they flourish and contribute to the economy.
SMEs have become a driving force in the economy for many countries in the recent years. This includes small firms, who are developing and growing the economy, providing a source of employment, developing new investments, maximise opportunities and inspiring people to become entrepreneurs. SMEs are mostly controlled by the owner of the business and have a limited number of employees. Although SMEs are good for the economy, if the businesses are not guided or helped, it will prove the statistic right as being part of the 75% SME in South Africa that fail within 24 months (Fatoki & Odeyemi, 2010).
Given that South Africa is a young country in the democratic era, it ind...
... middle of paper ...
...eeds to implement more workshops to develop the skills, include mentorship as well as put more emphasis on contributing to the Skill Development Levy. Another aspect is that SMEs can help to recover the economy is through ensuring that the allocated resources are used effectively and are able to produce at its maximum.
In conclusion, it can be seen that SMEs play a vital, dynamic role in the economy. There is an upward trend in the share of employment in SMEs and the growth of GDP. Given that South Africa is a developing country, SMEs assists in decreasing the rate of unemployment, allow for skills to be learned and practiced, increase level of output and lastly, acts as a mechanism to increased GDP. Through greater access to finance, business infrastructure and human capital development, SMEs will be strengthened to be the next economic engine of growth.
Small businesses success is dependent on the perceptions they create within their communities. A business trying to get established in their market depends on their local economy for support in order to get their name out there. If a business is not operating ethically or showing social responsibility to their community, they close those doors to the support they need in order to grow. Small businesses can have the greatest impact on a community by creating jobs and providing good and services for customers in smaller markets that larger corporations are often not interested in serving (Ferrell & Hartline, 2011).
This helps by making people focus on available resources, instead of trying to produce or sell various products which will cause overstock or understock. Many companies can specialize in certain products. An example would be international trade, in which one country produces grapes and another country produces mangos, each country can sell them at a low cost and so they can also obtain goods at a low price. Additionally, labor is more easily. If a person has a talent or certain abilities, they can put them to use instead of doing something that they do not know how to do it properly. For example, in a milk factory you have two people, one is good at milking cows and the other person is good at purifying the milk. The most intellectual action is to not make workers multitask, instead they should do the task they are proficient at. Specialization increases economy activity. This concept is very beneficial because is less time consuming and people can thrive at what they are good
...omy. It must be very difficult but some measures are required in order to reduce diversification of production and corruption inside the business, and to let small and medium businesses grow.
There are over 28 million small locally owned businesses in the United States and 70 % of these businesses are owned and operated by a single person. Owning a small business is not an easy task it takes hard work and dedication, Steve Jobs once said “you need a lot of passion for what you’re doing because it’s so hard”, people don’t realize
Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
In conclusion, a precise and more appropriate definition that reflects the size, the nature and needs of SMEs is essential and advantageous not only for a particular SME itself, but also for policy makers and supporting agencies in planning and nurturing the proper growth and development of the SMEs sector in Malaysia as a whole.
It is becoming increasingly apparent to governments and policy makers that the role of small and medium enterprises “SMEs” is crucial to the development and growth of any economy. SMEs are now widely known as the force that can motivate the global economy. A number of countries that have adopted this philosophy have managed, through long- term planning and the implementation of SME-serious policies, to upgrade this vital sector. "China and India, for example, are two countries which, according to the World Bank's estimate, will be leading the world's economy for the next 30 years. Both have a very strong SME sector, which has extremely contributed to the growth of their economies. “Said Jan Sturrason, a Swedish expert at Price-Waterhouse Cooper”.
Small and medium enterprise (SME’s) have very important role in the economy. Their contribution in increase in production, employment, number, and exports over a period of time is tremendous. The role of SME sector in the overall nation building is well recognized across the globe.
Growth in the small and medium business in Canada and other developed countries has been very significant. This sector of the business community now represents about 40 percent of GDP and accounts more than half of total employment. Today small businesses are more diverse and more vigorous than ever, but they also faces newer and more challenges or inhibitors to their growth than their older conter parts. This research will attempt to find the answer to the following hypothetical question:
SMEs are very performing and present a lot of advantages to success a turnaround strategy.
Within every major economy, a great factor in providing the energy of the core of the nations economy is the small and medium enterprises. These cluster of firms are what provide new economic activity, new innovative products and services, along with growing employment and in general a crucial system in ensuring the economy is at a stable growth level. With a majority of this activity stemming from family controlled or managed businesses, the focus on developing a global and long term perspective for these firms are ever growing in importance because of the global perspective entrepreneurship has started to take.
Nowadays, entrepreneurship becomes most popular career, where our government encourages our graduated student to involve in business so that unemployment will not happen in our country. Policymakers, academics, and researcher agree that entrepreneurship is a vital route to economic advancement for both developed and developing economics (Zelealem et al., 2004). Entrepreneurship has many types for example small business and others. Today small business, particularly the new ones, is the main vehicle for entrepreneurship, contributing not just to employment, social and political stability, but also to innovation and competitive power (Thurik & Wennekers, 2004).
Throughout Europe, great attention has been paid to the small business area and to the contribution that entrepreneurial small businesses can bring beneficial to transforming the economy (EiM, 1994).The concept of entrepreneurship is often considered with new venture creation and small enterprise management, and the terms of owner-manager and self-employment (Gibb, 1996). While Kirby (2003) has argued that entrepreneurship is far broader than these concepts mentioned above. Not all owner-managers can be considered as entrepreneurs, nor are all small business entrepreneurial (Carland et al., 1984). Carland also has argued that entrepreneurial small business is aiming at profitability and growth, and the business is regarded to be innovative.
Lack of capital is regularly the most basic test that an effective SME faces as its exceptionally achievement makes this and it rapidly turns into an endless loop.
Entrepreneurship is an important aspect of social, economic and community life. It can be viewed as a critical factor to economic growth as well as a way of addressing unemployment (Nolan, 2003).Entrepreneurs are people who are persistently focused on identifying opportunities, they seek to create something worthwhile while taking into account foreseeable risk and rewards associated with the efforts (Nolan, 2003). Furthermore, entrepreneurs are frequently understood to be individuals who discover market needs and establish new business to meet those identified opportunities. The following assignment will firstly discuss the types of entrepreneurship, secondly it will discuss the reasons people become entrepreneurs, and thirdly it will discuss the importance of entrepreneurship.