Developing a business model framework for support services to small- and medium enterprises in the services industry in South Africa

Du Plessis, Lourens (2012-03)

Thesis (MBA)--Stellenbosch University, 2012.


There is no doubt as to the important role of small businesses in the creation of employment and development of the South African economy. Unfortunately support services for the small business are generally hard to come by and expensive if not sponsored by government, an NGO or corporate entity. For the small business owner who has been operating for a number of years and knows what is required to operate successfully, it is difficult and time consuming to find an affordable solution. This paper aimed to find a business model framework that would bring support services closer to small and medium enterprises (SMEs) in the services industry in South Africa. It must have the capability to relieve an SME of resource-intensive support burdens (administrative and otherwise) and thereby allow an increased focus on its core service-delivery value proposition. Based on systems theory it is safe to say that all entities in the economy are somehow interrelated and exert some influence on each other. It is therefore well within reason to conclude that the output of this research could be beneficial to SMEs on the supply- and demand- side of the service industry. For the purpose of this report, an SME was defined as a company that had the following characteristics: active owner involvement on all levels, a relatively small market share, had a staff complement of between 3 and 50 employees and provided a service (i.e. solving a problem). In creating an appropriate solution, it was important to understand the target audience, the business owner, much better. The data source for this research was the data gathered during the Finscope South Africa Small Business Survey 2010. Underlying the research was a hybrid approach that utilised both quantitative and qualitative methodologies. The data was gathered throughout South Africa by means of a structured questionnaire created by a team of experts. It focused on measuring specific perceptions, attitudes and behaviour of SMEs and SME owners. A multi-sided platform or catalyst showed the most potential for satisfying the need to reduce the barriers between SMEs and service providers. A catalyst has three primary activities – building, stimulating and governing. These activities create and sustain a successful catalytic reaction and partnership. The research provided a wide range of South African SME and owner characteristics that were most beneficial in developing a business model framework.

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