Exploring business and owner traits of small and medium enterprises that exhibit increased revenues in South African townships : the case of selected townships in Strand

Sondlo, Dumisani (2012-12)

Thesis (MPA)--Stellenbosch University, 2012.

Thesis

ENGLISH ABSTRACT: Apart from meeting basic customer needs, small and medium enterprises in the townships are a source of employment and livelihood for many. Businesses in the townships of the Strand have mushroomed from a formerly neglected area, like others in various townships throughout South Africa. Yet very little is known about them and their owners. What are their characteristics? What traits distinguish those that make higher revenues from the rest? Many of these small businesses have emerged without government assistance, even though such support is often seen as a non-factor in determining the rate of an enterprise’s growth. Entrepreneurship, as literature often explains, is a dynamic endeavour which requires a business founder to display both determination and skill. Yet very few businesses normally survive the early stages. Many aspects of entrepreneurship need to be practically learned to enable the business to overcome many prevalent obstacles, and thus enable the enterprise to grow and contribute to job-creation. Not all entrepreneurs are alike in their capability to spot an opportunity. Also, entrepreneurs differ in their ability to either steer or set up systems to take an enterprise through its various transitions. Yet still, the financial strategic decisions made at inception stage often influence the rate at which businesses will generate revenues later in existence. Government, both local and national, has a responsibility to provide an enabling environment for businesses to thrive. Using a study of spaza and informal trade done in the past by Unisa and by Bojanala Platinum District Municipality as a baseline, this study surveyed 60.6 percent of businesses in the Strand townships that were identified through the database of both Khanyolwethu School and Sinobulumko Business Association. The main areas of focus were – the socio-economic and demographic profile, the physical characteristics, financing, relationship with suppliers, transport, income/turnover and traits that distinguish higher-revenue businesses from others. Analyses through the Mann-Whitney U, the Spearman's rank correlation coefficient, the chi-square and the Kruskal-Wallis test then showed that the businesses that tend to make larger monthly revenues are those that are owned by males, using cheque accounts for the business, and those whose main suppliers deliver merchandise to their premises. The businesses that make larger daily revenues were shown to be those that are owned by males, registered with CIPRO, using cheque accounts for the business and those whose owners have Grade 7 to 9 qualifications and above. For government, the results of this study call for a further refining of the criteria used for loaning to businesses in townships, as well as to make the public more aware of the assistance provided by government’s business support agencies. For banks, the study calls for the designing of a ‘Spaza Account’, tailored to the needs and skills level of businesses owners in the townships. Socially, the study calls for the tearing down of all the walls that make it difficult for open trade to take place

AFRIKAANSE OPSOMMING: Klein besighede in informele nedersettings spreek die behoefte aan van kliënte en genereer ‘n tipe inkomste, maar daar is min kennis oor eienaars se belange. Besighede in die Strand se informele nedersettings was gestig in minderbevooregte gebiede, soos baie ander regdeur Suid Afrika. Watter karaktereienskappe beskik hierdie eienaars om ‘n beter inkomste te genereer as die res van die inwoners? Baie van hierdie besighede het ontstaan sonder enige hulp van regering instansies ten spyte van ondersteuningsdienste wat aan hulle beskikbaar was. Afhangende van die groei van die besigheidseienaar word dit in elk geval nie in ag geneem nie. Entrepreneurskap verduidelik letterlik dat die besigheids eienaar uithouvermoe en vaardighede kan uitbeeld. Baie min van hierdie besighede oorleef hulle eerste fase vanuit die staanspoor. Baie aspekte van die besigheid moet prakties aangeleer word om daaglikse uitdagings te oorkom. Op hierdie wyse groei die mark en sodoende word werksgeleenthede geskep. Nie alle besighede is sodanig op hoogte van sake om geleenthede raak te sien nie. Dikwels verskil bestuurstyle van besighede om sisteme in plek te stel wat verandering kan meebring. Finansiële besluite wat geneem is aan die begin stadium het ‘n impak op inkomste wat op ‘n later stadium in die besigheid gegenereer word. Beide die nasionale en plaaslike regering het die verantwoordelikheid om ‘n goedgegewe besigheids omgewing te skep vir besigheidsgroei. ‘n Vorige studie van ‘n spaza en oor informele handel deur Unisa en Bojanala Platinum Distriksmunisipaliteit was as basis gebruik. Die studie het bewys dat 60.6 persent van besighede in informele nedersettings in die Strand geidentifiseer is deur gebruik te maak van die databasisse van beide plaaslike skole en besigheidsvereningings. Die hoof fokus areas was die sosio-ekonomiese en demografiese profiele, die fisiese karaktereienskappe, finansiering, verhoudinge met verskaffers, vervoer, inkomste en kenmerke wat die hoër – inkomste genererende besigheide van die ander skei. Analises deur die Mann-Whitney, die Spearman rank korrelasie, die Chi-square en die Kruskal-Wallis toetse bewys dat besighede met ‘n hoër maandelikse inkomste deur mans besit word wat hulle besigheide vanaf hulle eiendomme bestuur en gebruik maak van tjekrekeninge. Die besighede wat ‘n daaglikse hoër inkomste genereer is ook daardie wat deur mans besit word, geregistreer is by CIPRO, gebruik maak van tjek rekeninge vir die besigheid en daardie van wie se eienaars kwalifikasies van graad 7 tot 9 en hoër het. Asgevolg van die uitkoms van hierdie studie, soos van toepassing op die regering, moet vereistes vir lenings aan besighede in informele nedersettings hersien word. Die publiek moet ook meer bewus gemaak word oor die ondersteuning wat deur die regering beskikbaar gestel word. Ten opsigte van banke het die studie uitgelig dat daar ‘n spesiale ‘Spaza rekening’ geskep moet word wat voldoen aan die behoeftes en vaardighede van besigheidseienaars in die informele nedersettings. Op ‘n sosiale vlak vra die studie aan dat die ‘mure’ wat dit moeilik en onmoontlik maak vir ope mark besigheids geleenthede om plaas te vind, afgebreek moet word.

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