The economist at KZN treasury presented evidence to show that South Africa generally lags the global economy by 6 months, and the KZN economy lags the South African economy by a further 6 months.
So if we assume that December 2009 was the estimated time when the global recession was turned around, then KZN can expect to turnaround by the end of 2010. So KZN business people, just 6 months more to suffer, or so the experts say. Watch this spot :)
Monday, June 21, 2010
Saturday, October 24, 2009
SMEs - Will SMEs flounder or flourish in South Africa under Zuma
South Africa is going through immense political turmoil at present. Labour and the Communist Party are wanting a greater say in government for bringing Zuma to power. Labour is demanding the end to labour broking, of which government is an enthusiastic user. Umkhonto we Sizwe are attacking moderates like Kader. The ANC Youth League and it's leadership, using the term broadly, are demanding the nationalisation of the mines. Netshitenzhe has resigned. Trevor Manuel is under pressure to go from these same players. Look at our FPI.
Talk about supping with the devil. Zuma must be regretting his choice of partners I should imagine.
Labour broking is a direct consequence of labour market rigidity that has its roots firmly embedded in the unbelievably complex and labour friendly legislation in South Africa, which is further complicated by the CCMA who believe it is their duty to always award money to labour, even when finding in favour of business. Never mind the impact on inward FDI.
The efficiency of SARS in tax collection is sadly not recognisable elsewhere, mores the pity. Policies are uninformed by reality, and becoming more and more socialist as the days progress. Purchasing by government does not focus on sustainable business creation. I could go on and on, but the message would remain the same.
The fragile embryo stage SME component of our economy is very much like the humpty dumpty story, sitting on the wall. The question is how it will land, soft or hard. There is ample evidence that entrepreneurship prefers a free market (or close as possible) in order to grow and create new businesses and jobs.
However, the closer we move towards socialism, the more like we will have omelette instead of boiled eggs.
This means that the SME sector is under serious threat from these people, and as businesses we need to understand the seriousness, and tell Zuma that he has our support to follow the capitalist line, as opposed to the socialist line. He can get the votes he needs without these living antiquities and uninformed posers that claim to be the leaders of various fringe organisations.
Rob
Talk about supping with the devil. Zuma must be regretting his choice of partners I should imagine.
Labour broking is a direct consequence of labour market rigidity that has its roots firmly embedded in the unbelievably complex and labour friendly legislation in South Africa, which is further complicated by the CCMA who believe it is their duty to always award money to labour, even when finding in favour of business. Never mind the impact on inward FDI.
The efficiency of SARS in tax collection is sadly not recognisable elsewhere, mores the pity. Policies are uninformed by reality, and becoming more and more socialist as the days progress. Purchasing by government does not focus on sustainable business creation. I could go on and on, but the message would remain the same.
The fragile embryo stage SME component of our economy is very much like the humpty dumpty story, sitting on the wall. The question is how it will land, soft or hard. There is ample evidence that entrepreneurship prefers a free market (or close as possible) in order to grow and create new businesses and jobs.
However, the closer we move towards socialism, the more like we will have omelette instead of boiled eggs.
This means that the SME sector is under serious threat from these people, and as businesses we need to understand the seriousness, and tell Zuma that he has our support to follow the capitalist line, as opposed to the socialist line. He can get the votes he needs without these living antiquities and uninformed posers that claim to be the leaders of various fringe organisations.
Rob
Sunday, July 12, 2009
SMEs in South Africa - why is finance difficult to access
SMEs in South Africa do struggle to raise start-up finance from banks. The question is why?
There has been little, if any, in-depth research into why banks are not lining up to lend to this large, risky, yet very profitable market.
I myself am hoping to research the following suggestion in order to see if it has any validity. The suggestion is that a major contributory factor is that SME and entrepreneur are being interchangably used in South Africa.
There is a continuum of entrepreneurial endeavour suggested by Burch, and I believe that the SME owner is not synonymous with being an entrepreneur. Some SME owners may well be entrepreneurial, but it is not a given.
Consequently, banks have no tools with which to assess these SME owners, which makes the loaning of finance to them extremely difficult.
There has been little, if any, in-depth research into why banks are not lining up to lend to this large, risky, yet very profitable market.
I myself am hoping to research the following suggestion in order to see if it has any validity. The suggestion is that a major contributory factor is that SME and entrepreneur are being interchangably used in South Africa.
There is a continuum of entrepreneurial endeavour suggested by Burch, and I believe that the SME owner is not synonymous with being an entrepreneur. Some SME owners may well be entrepreneurial, but it is not a given.
Consequently, banks have no tools with which to assess these SME owners, which makes the loaning of finance to them extremely difficult.
Sunday, June 21, 2009
SMEs - the new Companies Act
There is a new version of the South African Companies Act on its way. This is a highly modified version of the previous Act, and is supposedly coming into action later this year.
A key change which is interesting from a number of respects, is an attempt to introduce the equivalent of Chapter 11 in the USA as I understand it. The intention is to help businesses that get into trouble to get through the difficulties they are experiencing by giving them some temporary protection from their creditors.
The current system is prohibitively expensive and not particularly helpful to SMEs.
I am busy reviewing this new version of the Companies Act and will hopefully be able to shed more light on this particular topic in the next week or two.
However, it will require that the business be an incorporated business, in other words a company, remembering that the Closed Corporation will also disappear and become a simple form of company, on which I will also provide more information.
A key change which is interesting from a number of respects, is an attempt to introduce the equivalent of Chapter 11 in the USA as I understand it. The intention is to help businesses that get into trouble to get through the difficulties they are experiencing by giving them some temporary protection from their creditors.
The current system is prohibitively expensive and not particularly helpful to SMEs.
I am busy reviewing this new version of the Companies Act and will hopefully be able to shed more light on this particular topic in the next week or two.
However, it will require that the business be an incorporated business, in other words a company, remembering that the Closed Corporation will also disappear and become a simple form of company, on which I will also provide more information.
Sunday, June 14, 2009
SMEs in South Africa - is tendering good for SMEs
How important is government business and large business for SMEs?
I believe it is very important, but there are riders here which must be considered. The purpose of government allocating business to SMEs, is to try and grow the SME sector, as growing SMEs are key players in job creation.
But how can these SMEs keep growing unless they receive continuous business. Sustainable SME creation and growth is completely dependent on continuous business from the buying organisation. But government and large businesses are strong believers that tendering is the best means to purchase the products and services they need. They feel the need to remain impartial in the purchasing process. Yet they espouse supply chain management as their credo. Supply chain management expressly guides the buyer to choosing suppliers that enhance the efficiencies of the buyer at every level. So surely tendering is in contradiction of this credo.
Is tendering an anachronism from the past? Is it not time for government and large businesses to treat the purchasing function in the true spirit of supply chain management, and stop resorting to tendering practices that “are objective” when in fact subjectivity is exactly what is needed.
If government policies are to achieve the goal of creating and growing SMEs, and large businesses are to find the efficiencies they desperately seek in their supply chain, through the use of SMEs, then we need to return to subjective purchasing practices.
Government and big business are equally as guilty in the South African context. I have heard senior people openly admit to simply keep changing supplier in order to supply orders to anyone who applies to be a supplier. This is counter-productive and in my mind counter-intuitive.
Let us create sustainable SMEs not one-order wonders!
I believe it is very important, but there are riders here which must be considered. The purpose of government allocating business to SMEs, is to try and grow the SME sector, as growing SMEs are key players in job creation.
But how can these SMEs keep growing unless they receive continuous business. Sustainable SME creation and growth is completely dependent on continuous business from the buying organisation. But government and large businesses are strong believers that tendering is the best means to purchase the products and services they need. They feel the need to remain impartial in the purchasing process. Yet they espouse supply chain management as their credo. Supply chain management expressly guides the buyer to choosing suppliers that enhance the efficiencies of the buyer at every level. So surely tendering is in contradiction of this credo.
Is tendering an anachronism from the past? Is it not time for government and large businesses to treat the purchasing function in the true spirit of supply chain management, and stop resorting to tendering practices that “are objective” when in fact subjectivity is exactly what is needed.
If government policies are to achieve the goal of creating and growing SMEs, and large businesses are to find the efficiencies they desperately seek in their supply chain, through the use of SMEs, then we need to return to subjective purchasing practices.
Government and big business are equally as guilty in the South African context. I have heard senior people openly admit to simply keep changing supplier in order to supply orders to anyone who applies to be a supplier. This is counter-productive and in my mind counter-intuitive.
Let us create sustainable SMEs not one-order wonders!
SMEs in South Africa - the end of Closed Corporations
The Companies Act is about to undergo a major review. This has a number of good aspects and as with everything else in life a number of bad. The questions is whether or not you have a clue about this Act and how it will impact on you?
Too many businesses simply allow the government to do what they like, without providing feedback, whether positive or negative. It is imperative that you read the legislation and decide for yourself what the impact will be on your business.
So go to the following website link and review the Act. http://www.michalsons.com/wp-content/uploads/2009/04/companies_act_71_2008.pdf
Understand the impact.
If you have any problems with the Act then let us know on rob@smorfitt.co.za and we can forward your input to the government.
Too many businesses simply allow the government to do what they like, without providing feedback, whether positive or negative. It is imperative that you read the legislation and decide for yourself what the impact will be on your business.
So go to the following website link and review the Act. http://www.michalsons.com/wp-content/uploads/2009/04/companies_act_71_2008.pdf
Understand the impact.
If you have any problems with the Act then let us know on rob@smorfitt.co.za and we can forward your input to the government.
Sunday, June 7, 2009
SMEs in South Africa - the African opportunities
As suggested in my blog 2 weeks ago, the African markets present a big opportunity for South Africa.
I saw some data which says despite the recession, Africa should still achieve 6+% GDP growth this year, albeit that it is off a low base. South African trade data show an increase in South African / Africa trade already, as well as the expected decline with USA and Europe.
The big corporates are already trying to penetrate these markets, but SMEs can do so as well.
There are a number of Africa oriented business magazines around. Have a look and get yourself informed. I purchased "African Business" and found a lot of useful information.
I saw some data which says despite the recession, Africa should still achieve 6+% GDP growth this year, albeit that it is off a low base. South African trade data show an increase in South African / Africa trade already, as well as the expected decline with USA and Europe.
The big corporates are already trying to penetrate these markets, but SMEs can do so as well.
There are a number of Africa oriented business magazines around. Have a look and get yourself informed. I purchased "African Business" and found a lot of useful information.
Subscribe to:
Posts (Atom)