SME Survey 2006: Skills and finance the answer for SME growth
Since 2003, SME Survey has probed factors behind the competitiveness of small, medium and micro enterprises by polling some 6000 businesses across vertical markets.

According to Arthur Goldstuck, SME Survey principal researcher, businesses which fall within this category face many challenges which can hinder their ability to generate profits and create employment for others.

“The business environment is also constantly under change in terms of the introduction of new regulations and legislation with which businesses – including SMEs – must comply. Notably, government is extending the requirements of BEE compliance to the SME, although the conditions of the legislation are somewhat simplified over that which applies to big business,” he says.

SME Survey 2006 has confirmed, however, that the most notable challenges faced by the SME relate to the availability of skills and finance.

In evaluating the enabling environment for SMEs, respondents were asked to rate the importance of a range of resources while also indicating their level of satisfaction with their access to these resources. The resultant Satisfaction Index demonstrates the level at which the average SME is able to meet its need for these resources.

“Access to Skills and Expertise on the one hand and finance on the other continues to be regarded as the holy grail of running an SME with 91% of respondents indicating that these resources are important,” he says.

However, the Satisfaction Index for these factors demonstrates the difficulty faced by the SME in accessing these resources. Notes Goldstuck: “The Satisfaction Index highlights the areas in which the enabling environment for SMEs is lacking. The resources that rate highest in importance have the lowest relative ranking in terms of satisfaction with access to these resources; while 79% rate access to skills and expertise as very important and a further 12% rate it as important, only 37% are very satisfied with access to this resource,” he explains.

The resultant Satisfaction Index for skills and resources is 52, while access to finance rated just 56.

Despite well over half of respondents (57%) regarding Access to BEE Status as an important resource, it has barely moved in terms of the proportion of SME decision-makers regarding it as important. As with the 2005 survey, a far higher proportion of people regarded it as important than the proportion of respondents who in fact did report having BEE Status. “This suggests that respondents are well aware of its importance, even if it hasn’t helped them yet,” says Goldstuck.

Access to BEE Status rated 60 on the Satisfaction Index.

With the importance of access to finance having increased over 2005, Goldstuck says this indicative of the growing costs of running a small business. “Financial resources play a major role in both survival and competitiveness. Together with expertise and skills, finance is the bedrock on which the growth of the SME sector must be built,” he concludes.