Small and medium businesses (SMBs) in South Africa are proving their adaptability and resilience with 78% of SA SMBs reporting that they are confident and optimistic about their future success
This is according to the Small Business, Big Opportunity annual survey from Sage which surveyed 12,000 small and medium-sized business leaders globally.
While 78% of SMBs are confident and optimistic, this number is slightly down from 84% reported in 2023.
Productivity and technology
The SMB confidence can be attributed to:
- improved operational efficiency
- increased consumer spending
- adoption of new technology
- enhanced cash flow.
Close to seven in ten (68%) SMBs were satisfied with their productivity levels, while 44% highlighted improved efficiency as an important factor for confidence.
While confidence is up with 39% of SMBs seeing revenues grow in the past year, it hasn’t been an easy year for all of the country’s small businesses as 26% saw revenues fall.
SA SMBs appear more optimistic than their global counterparts, with 40% reporting cost increases over the past 12 months which is much lower than the global average of 51%.
Looking to the future, 31% of SMBs expect cost reductions in the next year, compared to just 21% of SMBs globally.
While SMBs recognise the huge value of digital transformation, they are trailing the global market in fully leveraging technology which is highlighted by the fact that 92% SMBs see digital technologies as essential for boosting business revenue.
This is much more than the global average of 87%, yet many have yet to translate this recognition into widespread implementation.
Only 78% of SMBs have reported that digital technologies are crucial for their daily business operations, lower than the global SMB average of 86%. SMBs are also less likely to turn to digital technologies to overcome barriers (26%, compared to 37% globally).
Instead, they will typically focus on cutting costs (43%).
Just 73% of SMBs have invested in artificial intelligence (AI) technologies over the past year, slightly above the global average of 69%. Although, only 47% of SMBs are relying on AI to drive revenue growth, compared to 63% of global respondents.
However, SMBs can close the gap quickly, with 76% planning to invest in AI technologies in the coming year, exceeding the global average of 72%.
Only 26% of SMBs are worried about the costs of AI, instead, they see data and privacy risks as a bigger concern (45%).
Resilience through adaptability
"South African SMBs are going for growth, with optimism and investment on the rise. However, there is a significant opportunity for them to drive higher levels of efficiency and profitability by fully embracing digital technologies," Pieter Bensch, Managing Director and Executive Vice President, Sage Africa & Middle East said.
"SMBs are the backbone of the South African economy, and their ability to adapt and grow under pressure is nothing short of inspiring. By doubling down on digital adoption and working in partnership with government and large enterprises, SMBs can unlock even greater potential and contribute to the broader economy."
With nine in 10 global businesses reporting that digital technologies play a vital role in enabling revenue increases, digital adoption could unleash benefits for the wider economy.
"Government and big business have an ongoing role to play in creating an environment for SMBs to flourish, particularly through providing access to affordable finance and promoting digital transformation," Bensch said.
IOL Business