The changing competitive landscape in small and medium enterprises
The small business sector is a crucial component of the national economy in South Africa. The challenges facing the economy are significant. Growing inflation, energy shortages, unpredictability on a global scale, and high unemployment rates are among them, and SMEs are trusted and emphasised to offer a path forward. In this article, we will explore how SMEs have adapted throughout the changes and how they strive to overcome the challenges they face.
Young SMEs led by young minds
One of the most interesting phenomena regarding SMEs is that they are mostly led by young people. Amidst the pandemic, many SMEs already experienced a dramatic drop in demand, with the worst affected sectors including the services sector (for example, private accounting and legal firms), tourism, hospitality, and retail. As competitive industries themselves, they are also influenced by the demand from young people. This creates opportunities and competition alike, and if young entrepreneurs operate from a human-centric approach, they are most likely going to stand out among the rest of the competition. Speaking of competition…
Competition and other challenges
Small and medium-sized businesses are frequently cited as a driver of economic expansion and job creation. In fact, they account for around three-fifths of employment and over 90% of registered businesses in South Africa. Not to mention the magnitude of the informal sector in growing and developing economies, this statistic is representative of all nations and areas in the world. Additionally, it contends that SMEs are responsible for around two-thirds of all employment growth. However, it’s crucial to remember that while SMEs generate new jobs, they also have job losses. Compared to larger organisations, the industry and employment are far more unstable. In actuality, SMEs will also be producing and destroying jobs in opposition to trends when employment is rising or falling. Therefore, before looking for a fix for the economy’s problems, we should keep in mind that employment in the SME sector is unstable and that less than half of new businesses survive for more than five years.
The employment fluctuation in SMEs ripples into other factors, such as the relationship between supply and demand. Without the right resources and tools, an SME faces the risk of going obsolete due to being unable to service its customers. While they rely on grants, investments and support from buyers to stay afloat, leadership plays an important role in outlining and understanding the goals of an SME.
The right human resources
To lead a successful SME, you will need to understand the benefits of collaborative work. Much like non-profit and community-based projects, SMEs require the work of a team to succeed internally and externally. While large enterprises also need the same, they have an advantage normally built from experience. As a leader in an SME, you need to understand that every project has different needs. Equipping yourself or your staff member with a Postgraduate Diploma in Project Management from the Stellenbosch Business School will help you gain a broader understanding of your business, industry, and SME expectations at large. Project managers with expertise are in high demand. Therefore, it makes perfect sense that project management is ranked a top profession.
Solutions a project manager may bring
Besides SMEs struggling to get funding assistance due to not meeting certain criteria, there are other reasons such as the lack of awareness of existing opportunities, as well as lack of access to the information or location of these funding sources. A project manager in an SME can easily take care of sourcing the right collaborative investments and funding opportunities needed to move a business forward instead of having a company that applies for funding any and everywhere without the necessary alignment of values and goals.
Project managers will also assist in creating opportunities for SMEs to get involved in community work. The bulk of SMEs are helping those around them, and project managers will assist in aligning the business with these social needs and goals.
Start while on the go
A PGDip in Project Management from Stellenbosch Business School does not need you to leave the groundwork you are busy with while studying. You can study and work simultaneously and implement the changes you want to see in your business as you go along. Remember to tailor your business development based on your business’s motives and values, and while it is healthy to look at competition, it is much better to research your customers’ needs more. But don’t believe us, come learn all about being the best project manager any business, small or large, will appreciate.
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