The mid-term budget speech by Tito Mboweni brought home just how much South Africa is struggling to keep its economic head above water.
The status quo characterised by poor growth prospects, burgeoning debt and underperforming state-owned enterprises, does not make it easy for businesses to grow and thrive.
EasyBiz Technologies head of sales and services, Bridget du Toit, says this is especially the case for small to medium enterprises (SMEs). “The SME sector employs 47% of the country’s workforce, contributes more than 20% to gross domestic product (GDP), and pays 6% of corporate taxes. However, many are battling to stay afloat as the country’s economic crisis deepens.”
While the National Development Plan optimistically envisages SME’s contributing about 90% of new jobs in South Africa by 2030, du Toit says the sector needs certain things in place to achieve this: a growing economy, access to finance, the relaxation of regulatory requirements and a lifting of tax constraints.
“A stronger economy will encourage more businesses to expand, allow them to hire more people and enable them to buy more equipment. An economic turnaround like this requires an all-hands-on-deck approach – business, labour, civil society and government – and all South African players sharing a strong, common purpose,” she adds.
Du Toit identifies three actions SMEs can take to weather the storm and position themselves for future growth.
Don’t let dated technology slow the business down
SMEs need to identify where poor fitting or old technology is slowing them down. “They need to begin with a thorough review of their technology and processes to identify a few key wins. A business that has been going for a number of years may have old technology in place that was right for it at the time. That doesn’t mean it’s right for it now,” explains du Toit.
She says if people in the business are spending a lot of time on manual processes or capturing data across multiple systems, there are most likely opportunities to automate, whether it’s a payroll solution to manage payslips, a tax solution to manage e-filing, or an affordable cloud accounting solution to manage debtors and creditors more effectively.
Set goals for process and technology improvement
Once the pain points in the business have been identified, business owners need to evaluate what they want the technology to do for them. They need to set some goals, be it freeing up time for employees to focus on activities that will produce more income, or quantifying the hours they want to save and how they intend to reinvest these hours in the growth of their businesses.
Du Toit says most business owners want to improve their insight into the performance of their operations. “To do this, they need to determine what financial metrics they want to measure including which data and tools are able to provide the insights they need.”
Three possible improvements suggested by du Toit include the automation of manual processes; leveraging data analytics and intelligence; and improving data accessibility.
She says by automating manual processes, businesses can make better use of their people. “By reducing their workload and offloading trivial, repetitive tasks, SMEs can free their employees up to get more involved creative endeavours and tasks that promote business growth.
“It is important to ensure everyone can see relevant data when they need it. Data analytics and intelligence should be current and accurate, allowing for a predictive approach to opportunities and problems. And, by sharing data across all technological platforms, including mobile devices, data can be shared across all departments – 24/7,” she says.
Identify the right tools and solutions for the job
The issue for many entrepreneurs is the vast amount of business solutions available in the market.
“It can be difficult for SMEs to decide where to invest and how to prioritise. Three things they need to bear in mind are integration, scalability and mobility,” says du Toit.
Systems that SMEs set up today should be able to be integrated with future third party solutions. “I know this isn’t always easy to predict, but they can certainly work out what is going where and easily integrate with their customer vendor systems and integrated payroll accounting solutions,” adds du Toit.
She says scalable systems are those that will not only meet an SMEs current needs, but will be able to evolve with the business. “By automating today with the right solution, they can avoid growing pains and the need for further complex integrations and implementations down the line.
“From a mobility perspective, businesses today shouldn’t be limited to office hours or physical boundaries. They need to look for solutions that put their customer and financial information in the palms of their hands. It will also enable business owners and employees to work remotely, thus boosting productivity and responsiveness – it is undeniably the way of the future.”
She says changing to fast, agile and efficient systems is not easy. “It is, however, essential to enable scalability. I have noticed that high growth firms are not hindered by old, cumbersome systems. They have built efficient, automated processes and use cloud technology with a light human touch.”