While Small, Medium, and Micro Enterprise (SMME) play an important role in the creation of jobs in South Africa, it also enables diversification through the creation of new markets and sectors that are crucial drivers in economic growth and development. The SMME sector provides under-tapped market opportunities that can provide more economic growth
- Technological Advancement
Due to changes in technological opportunities through digital trends, the current ways of performing business in South Africa are challenged. SMMEs are now well-paced to leverage these technological advancements to innovate for lack of skills challenge. This provides a great opportunity for SMME management teams that cannot afford full-time professionals in the current economic state to connect with people whose skills are not fully utilized.
Technology has also allowed SMMEs to gain access to the market. Instead of going after the government and large companies’ clients, SMMEs can be each other’s clients and service providers.
- ICT Sector
The Information, Communication, and Technology (ICT) sector provides another opportunity for SMMEs. Despite the slow growth in the economy, the expansion of bandwidth and fiber application is performing well. This sector provides a range of opportunities such as Wi-Fi masts, data fiber cables implementation and provision of services like technical support.
- Industrial and Commercial Property
Due to the tough economic climate, many people are migrating to the cities that provide business opportunities in the country. This creates an opportunity for SMMEs to become creative to provide for the emerging needs that the urban population requires. A wide range of ideas can be implemented in the industrial and commercial property space depending on the needs of the customers.
The export of a wide range of vegetables, fruits, and exotic meat industry has been increasing substantially. This is a product of the agricultural sector taking advantage of the climatic regions. The most important opportunities in the agricultural industry are majorly in the underdeveloped and rural areas that demand resources like storage, better irrigation schemes, transport, and power generation.
Although there is a dire need for investing in infrastructure in South Africa, the major opportunities lie in electricity, rail, water, and roads. Specifically, in the upgrade and construction projects, which are gaining popularity tremendously. These forms of infrastructure offer a great opportunity for SMMEs in terms of subcontracting agreements or public-private partnerships (PPA) participants.
- Tourism Industry
The tourism sector in South Africa provide a lucrative business idea for SMMEs. The country registers up to 8 million tourists visiting the country every year, create a complete and ready market of SMMEs. Although the industry is faced with challenges such as strict regulations of visas for children who enter the country, the government has revised this restrictive visa regulation. This has boosted the number of tourists visiting the country.
The demand for manufacturing capacity in South Africa has been increasing over time. Initiatives like SA Automotive Masterplan and Black industrialist Programme have provided the creation of jobs and business opportunities. Therefore, the manufacturing sphere can provide robust opportunities for SMMEs through partnerships with large corporations and outsourcing contracts
Although there are many opportunities available for SMMEs, the more profitable areas in the current economic climate include technological advancements, ICT sector, industrial and commercial property, and agriculture. More opportunities are also found in the tourism industry, manufacturing, and infrastructure.
Outsourced Finance is an advocate for SMME, we assist our client to better navigate this tough economic times.