Small firms not ready for 2010

Pretoria - More than half of emerging small, medium and micro-enterprises (SMMEs) live from hand to mouth and are unprepared for the 2010 Soccer World Cup.

This is evident from a comprehensive survey conducted by Markdata & Partners for the Tourism Enterprise Partnership (TEP).

The take-home pay of owners of even the star-performing SMMEs is currently much the same as that of a senior civil servant. Most owners' income is less than that of a semiskilled worker.

About 4 500 SMMEs in and around host cities and in prime government development areas were intensively targeted in the survey. Established enterprises with an annual turnover of more than R25m were excluded.

Industry leaders reckon poor township education contributes to the situation, but the enterprises are also generally located on the periphery of host cities and in townships, outside easy tourist access.

According to the results, state assistance, such as subsidised loans, is associated with failure rather than success, while training courses do not make much difference

The research results indicate that individual mentorship produces better results than standard courses.

Even businesspeople apparently realise that there is little time left before the 2010 Soccer World Cup. They want to make use of suppliers' databases, know they need to market better, and say they need access to spectators and soccer supporters.

• About 1 600 or 35.5% of these businesses have been identified as star performers. They are viable and ready to deliver products and services in 2010 and after. Only 20% are owned by previously disadvantaged persons, and these enterprises' monthly turnover is typically about R38 000, half of which is used to cover operating expenses.
• Another 2 208 or 49% of the enterprises are potential stars, viable or "largely viable" - and with assistance could make a contribution. More than 60% are owned by previously disadvantaged persons. Their monthly turnover is about R4 000, about half of which the owners take home.
• In all, 745 or 16.5% of the enterprises are struggling or marginal businesses with no prospect of making a contribution. Previously disadvantaged persons own 90% of these, and their monthly turnover is about R1 100.
• Emerging SMMEs are especially engaged in the provision of accommodation, arts and crafts, as well as food and beverages.
• This sector supplies 12 000 beds at occupancies of more than 50%, with tariffs ranging from R250 to R350/night.
• Only 20% of the arts and crafts sector is ready to deliver products in 2010. The threat of imported and imitation goods can be counteracted by improved local product quality.

- Sake24