CONSTRAINTS FACING MICRO ENTERPRISES
Date
2011-05-23
Authors
Morrison-Jones, Alan Roger
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Abstract
South African townships are characterised by generally high levels of unemployment
and poverty. Small, medium and micro enterprises (SMMEs) are seen to be a fruitful
source of jobs that generate income, which in turn relieve poverty. The purpose of
this research was to obtain an understanding of the constraints facing micro
enterprises in South African townships. It is envisaged that this understanding of the
constraints facing the micro enterprises will assist government, business and other
institutions to provide a favourable environment for SMMEs to operate in, and hence
contribute to relieving unemployment and poverty.
This research comprised case studies of six micro enterprises on the Vosloorus
Industrial Estate, in the Vosloorus township. The micro enterprises selected ranged
across a number of skill sets, including welders, auto mechanics, panel beaters and
furniture makers. Semi-structured interviews were conducted with the micro
enterprise owners. A semi-structured interview was also held with: Khula
Enterprises, the owners of the industrial estate; Mr Nhlapo, the chairman of Gapipa
(Gauteng Province Industrial Parks Association – refer to Section 2.6); and Patson
Ngwevela, the councillor for the applicable ward in which the industrial estate is
located.
Several constraints to the growth of the micro enterprises were identified. Micro
enterprises need to continuously adapt to environmental changes in order to survive
and grow. In other words, the micro enterprises need to adapt their internal
environments so that they are relevant to their external environment. As a result of
this need, the key constraints identified were classified under the headings of external
constraints, internal constraints and the constraints with the support structures. The
key external constraints identified were the high levels of unemployment and poverty,
and the competition from the backyard and street corner enterprises. The key internal
constraints identified were the fact that the micro enterprises operated informally, the
fact that the micro enterprise owner’s skills were unaccredited, and the fact that
marketing was in essence passive. The key constraints identified with the support
structures were the lack of awareness and the lack of trust in the support structures
Description
MBA - WBS
Keywords
Small businesses, Micro enterprises