It’s a fact: small businesses are surviving the recession.
Why? It’s simple: “They’re surviving because they have to survive. They have no choice. There is nothing to fall back on.”
This was the reaction from Professor Nicholas Biekpe, president of the Africagrowth Institute on the provisional results of the 2009 SME Survey which indicates that only 5% of small and medium enterprises (SME’s) are currently trading at a loss while about 67%, according to the owners, are still profitable. Other facts emerging from the survey include:
- Of the 67% that say they are still profitable 39% say their businesses are only just profitable,
- 28% reckon their businesses are very profitable.
- 5% of the respondents have no or very little confidence they can survive the recession,
- 28% show high confidence, and
- 31% very high confidence in their abilities,
- Whilst 36% say they have neither high nor low confidence.
The SME Survey which is sponsored by Standard Bank, the National Youth Development Agency (previously the Umsobomvu Youth Fund) and Fujitsu, has been conducted for the past 6 years and 2 500 business owners are questioned. According to Arthur Goldstuck, managing director of World Wide Worx and chief researcher of the 2009 SME Survey, this year’s survey investigates the SME’s ability to deal with the first recession in 17 years, whilst many of those surveyed had never before done business in a shrinking economy.
The preliminary results of the survey, which will be released in full in October, were a surprise to the researchers who expected a far worse picture. The link between survival, which seems to be what makes the SME sector so resilient and confidence, which is an important element to survival, was a crucial one. But it seems that small businesses owners have that fighting instinct and coupled with a commitment to manage costs in a recession, are able to survive the bad times. Source: Fin24.com