Small business funding to be improved

The main problems small business face is finding customers, raising funds, a lack of guidance and entrepreneurs’ tendency to wear too many hats, according to a survey of over 900 start-up entrepreneurs. Seed Academy, a school for entrepreneurship, surveyed entrepreneurs who have been in business less than five years. The results showed that while entrepreneurs faced key challenges, the majority were startlingly positive and motivated to grow and develop their businesses.

These challenges confirm that entrepreneurial development should be aimed at providing business education, helping to create a network, offering tangible guidance to find customers and of course, preparation to raise funds at the most appropriate time for the business.

Funding emerged as a key issue. Only a small percentage of entrepreneurs fund their businesses from the vehicles formally established to support them. This raises questions regarding the accessibility and effectiveness of funding programmes, explained Rachelson.

The SA National Development Plan aims to have 90% of new employment created by small, medium and micro enterprises (SMMEs) by 2030, so it follows that job creation should be a key outcome of entrepreneurial activity. The results indicate, however, that the number of businesses that employ five or more employees are still in the minority. The biggest motivator to start a business is the identification of an opportunity. Only 8% of respondents started a business as a result of not finding a job, which is a leading indicator in the development of successful entrepreneurs.

Key findings are:

• Focus be on entrepreneurial development;
• Female entrepreneurship needs to grow;
• Promote a culture of entrepreneurship;
• Enhancing the angel network;
• Innovative funding mechanisms be offered.

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