Most SME’s seek access to expertise,not BEE

SME Research

Small and medium enterprises (SMEs) consider access to expertise to be the single most critical resource for their business, according to the final results of SME Survey 2005, released today.In the study, backed by Standard Bank, MWEB Business and Microsoft, 91% of 6 059 SMEs said access to expertise was important in starting and running their businesses, with just 2% believing it to be unimportant.

Not far behind was access to finance, with 88% of respondents claiming this to be crucial to their business, and just 3% seeing it as unnecessary.

According to Arthur Goldstuck, principal researcher for the survey, although finance is seen as slightly less important than access to expertise, the two ultimately mesh together in the bigger picture. Realistically you cannot offer one without the other as they leverage off each other,” he says.

“This confirms that the biggest constraint to the development of the SME sector is rather that of knowledge and skills of the entrepreneur than access to finance,” says Roy Ross, Director Business Banking of Standard Bank. “It is just as important to know how to access finance as it is to know where to get it.” It also serves to explain why the overwhelming majority of business owners positively rate the impact of banking services on their competitiveness, with 75% of business owners perceiving it as having a positive impact.

One of the key recommendations from the study is that government must restructure support plans to provide expertise in a meaningful fashion for SMEs.

“One of the reasons many government initiatives fail is because of the level of expertise expected from SMEs when dealing with the complexities of qualifying for grant funding, for example,” says Goldstuck. “The authorities should be providing this expertise to the SMEs instead of demanding it.”

Despite great emphasis placed in the IT world on bridging the digital divide, SMEs considered access to general resources – such as premises, transport and basic infrastructure – to be more important than access to IT and Internet infrastructure.

“While IT does offer businesses a tremendous competitive advantage, this is pointless for a SME if it does not have the necessary basic infrastructure. After all, there is little point in having access to the Internet if you don’t have a roof over your head.”

“On the other hand, if the general infrastructure is in place, then access to IT and the Internet becomes critical, as it has also been shown in this study that companies that have Internet access are far more competitive than those that do not,” says Goldstuck.

The study also found that, while 91% of those surveyed considered access to expertise to be important, only 58% of respondents considered access to Black Economic Empowerment (BEE) status to be valuable.

“The key issue here is that, in the SME environment, BEE is not deemed to be as important as it is in the corporate sector, as SMEs are not yet really affected by procurement rules and empowerment scorecards with which corporates have to comply,” says Goldstuck

“Of course, as the industry charter process filters down to smaller businesses, so players will come to realise the importance of this crucial resource.”

Goldstuck concludes that ultimately, access to resources can be viewed as akin to building a house, with expertise and finance seen as the foundation, while general and IT infrastructure creates the walls and BEE status forms the roof that protects the SME from the weather of a changing business environment.

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