The rapid rise of technology and the digital revolution are increasingly pushing small and medium-sized enterprises (SMEs) to undertake a digital and creative transformation.

However, a lack of access to, and knowledge of, information technology (IT) are holding these businesses back, with the latest National Small Business Chamber (NSBC) survey revealing that some 65% of SMEs find this to be a major barrier to growth.

The digitalisation of SMEs was becoming more relevant as entrepreneurs battled larger, more established firms for competitive space, NSBC founder and CEO Mike Anderson said at the inaugural MTN Business digital entrepreneur masterclass, in Randburg, on Thursday.

The findings from the 2016 NSBC survey show that the lack of IT understanding and confusion surrounding its applications severely impact the options for small businesses.

Currently, around 69% of formal SMEs do not have a website, and those that have an online presence do not sell their products or services online, but, rather, undertake the task to “professionalise” the business.

“We need to focus on giving business a digital transformation,” he explained, pointing to the fact that many SMEs failed to operate past the 1 000-day mark.

“We can make a difference. We cannot change the rest of the world, but we can change ourselves,” Anderson noted, indicating the need to help enterprises adapt and “stay in the game”.

MTN Business senior manager for SMEs Wei-Ling Chiu added that there were an abundance of readily available options to assist struggling SMEs to get online, including that of website building, content and grammar specialisation and a range of other free services that SMEs could use to give themselves a competitive advantage.

With the possibilities for small business showcased at the MTN masterclass, MTN Business enterprise sales GM David Mphelo said the digital era marked the rise of the digital entrepreneur, as digital and business became synonymous.

With consumers demanding digital services amid a “going mobile” future, the platform was open for SMEs to make a conscious decision to “redefine” as digital entrepreneurs.

“We need to play digital,” he said.

This is particularly relevant in an era where mobility is gaining momentum, with more connected devices in the world than people.

Samsung enterprise mobility director Paulo Ferreira said that, by 2020, there would be 6.58 connected devices per person, nearly double the 3.47 connected devices per person recorded in 2015.

However, the related products, solutions and services need not be complicated or too costly with a number of available enterprise mobility options available from reputable companies.

Ferreira said that with enterprise mobility gaining momentum, companies were taking more active measures to adopt and adapt to the trend.

Meanwhile, Anderson believed there was a need to cultivate an entrepreneurial environment.

“Small business is big business,” he said.

Over half of the hundreds of thousands of SMEs spanning South Africa employed between one and five people, with 29% hiring between six and ten employees.

The NSBC survey also shows that 56% of the polled SMEs are considering the daunting task of branching out into the rest of Africa and beyond, with another 25% saying they would think “beyond” South Africa in the future.

Forty-seven per cent of the polled SMEs are based in Gauteng, 30% in the Western Cape and 10% in KwaZulu-Natal.

Around 76% were in operation for less than five years and a mere 14% have been in business for five to ten years.

Highlighting other findings of the 2016 survey, Anderson noted that 66% of SMEs had a yearly turnover of less than R5-million and 32% between R5-million and R20-million a year, with 15% of those polled operating in the business services sector and 11% in industry and manufacturing.

The professional services industry is also fast emerging as a favourite for entrepreneurs at 11%.

The adoption of new technology levels the playing field, particularly as SMEs report that failing to market a business is the biggest mistake being made.

Limitations in sales and marketing – 43% of SMEs say this is the most important area where they need assistance and 39% believe there is a need for enhanced skills and development in that area – an inability to compete with big business and difficulties unlocking access to funding dominate the range of challenges facing SMEs.

Some 26% of SMEs also indicate the need for business and strategic planning assistance.

However, Anderson commented that technology could change the game, while marketing was no longer a big budget exercise.

In addition, with the need to increasingly become their own “rainmakers”, SMEs could leverage technology to build their customer base for growth and “correct any misdirections” amid a lack of access to funding.

Anderson suggested that funding restrictions and insufficient cash flow were forcing small business to access funds through other means or work around this, with only 25% of SMEs applying for loans or other means of finance for their businesses.

This is a reversal from last year’s survey, when 75% of the SMEs surveyed had applied for a loan or finance.

SMALL BUSINESS AWARDS
The summit comes as the NSBC honours South Africa’s top 20 SMEs, the bulk of which were dominated by technology-related businesses.

The NSBC announced the Top 20 Small Business and Entrepreneurship Award winners and the finalists of the 2016 South African Small Business Awards.

“Technology is pervasive and is becoming a dominant sector globally, as well as locally. Within the entries the NSBC noted exciting developments and the growth of business solutions that focus on assisting other small businesses to grow and develop,” Anderson said in a statement.

The official awards will take place on November 10.