FIN24 / 30 AUGUST - 21:10 / KHULEKANI MAGUBANE
The Seed Academy has painted a bleak picture of the state of entrepreneurship in South Africa, after its latest survey found that 22% of entrepreneurs had to make do with revenue of less than R10 000 a year.
A further 26% of post-revenue entrepreneurs have revenue of R50 000 - R100 000 a year, the Academy said.
The survey collected data from 1 000 entrepreneurs around SA.
According to Seed Academy, the survey shows that entrepreneurs are not thriving, and the country's "entrepreneurial ecosystem" is in urgent need of intervention.
High rate of business failure
A decade ago, the Small Enterprise Development Agency conducted a study that found up to 75% of small businesses started in the country failed, giving SA one of the highest rates of business failure in the world economy.
Seed Academy CEO Donna Rachelson said the survey was conducted over four years, and it is SA’s largest and most referenced entrepreneur survey.
She said South Africa still battled with early stage funding and high-impact business support.
"We see small progress in terms of business survival rates, revenue increases and more women entrepreneurs, but what we really need is for stakeholders in the ecosystem to pull together and make major trajectory changes that support all entrepreneurs from seed through to scale-up stages," said Rachelson.
The survey summary said South African entrepreneurs, on average, employ between two and four people, but the environment they operated in remained difficult to navigate.
Entrepreneurs also report that they don’t know how to access available support.
"Key challenges for entrepreneurs include inability to raise funds, finding customers, wearing too many hats; followed by lack of guidance, slow sales, customers paying late and unpredictability of business conditions," the report said of support mechanisms.
Rachelson recommended that funders play a more active role in educating entrepreneurs about their processes of business support, and put in place interventions that assist entrepreneurs to become "funding ready".
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER