South African small businesses can expect a tough 2016, but there remain opportunities for those willing to search them out.
In a presentation delivered yesterday at Property Point's To The Point session, Small Business Insight’s Stephen Timm (pictured above), joined by policy expert Septi Bukula of Osiba Management, outlined some trends SMEs can expect next year.
Property Point is property group Growthpoint's supplier development programme. The seminar was held at the Southern Sun Hotel in Hyde Park in Johannesburg.
The National Treasury last month said the economy is set to grow at 1.7% next year, after an expected growth of just 1.5% this year.
Amid weak business confidence and low household demand, small firms can expect to still battle electricity constraints (although in the last 100 days there was just a single controlled blackout lasting 2hr30mins) as new power stations still come on line.
In addition a drought, brought on by the worst El Nino in 15 years, is also threatening to raise food prices and stoke inflation.
Government spending will also be tighter, meaning possibly fewer possibilities for contracts with the state (although infrastructure work will continue) – with possible tax hikes on the cards still.
The latest Manufacturing Circle (for the third quarter) survey found that 45% of employers in manufacturing sector are looking at cutting jobs in next year. This, while a survey by the SA Chamber of Commerce and Industry (Sacci) in October found that trade expectations for next six months have entered a negative outlook for first time since mid-2009.
Business Partner’s latest index reported average confidence levels of 57% that the SA economy will be conducive for business growth in the next 12 months. This was the second successive quarterly decline since peaking at 60% during the first quarter.
In addition in Small Business Project’s (SBP) 2015 SME Growth Index, released earlier this month, just over one in five firms reported a decline in turnover from the previous year and a further 20% reported no growth in turnover in the same period.
Still some opportunities
It's not all doom and gloom. Over the coming year and those to follow, business owners are likely to find a number of opportunities. Here are some:
Where can you find data and trends?
Business owners are busy people. But it helps to set time aside to plot the longer-term opportunities or trends in your particular business sector. Getting hold of quality data is often a good place to start. Here are some ideas:
Timm is a South African who writes on small business. This is a version of the presentation he and Septi Bukula of Osiba Management gave yesterday at a seminar run by Property Point. Follow Small Business Insight on Twitter at @Smallbinsight.
Stephen Timm is a