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  • Writer's picture Sanet Riekert

Xero State of Small Business in South Africa

Updated: Aug 22, 2023

I recently interviewed Colin Timmis, the Country Manager for Xero, on their recent report on the state of small business in South Africa.

The research in this report was based on interviews with 300 small businesses across various sectors in all nine provinces in South Africa, conducted in February - March 2023.


While there are many challenges, South Africa’s small businesses have thrived in the face of adversity. Almost three-quarters (74%) have grown over the past year – up from 62% last year. Growth drives optimism, with more than 95% expecting to survive the coming year and nearly 90% in the next five years.


These findings signal the grit and tenacity of small businesses in the face of incredible challenges and how they’re equipping themselves with the tools they need to succeed and grow.


“As well as most (74%) small firms using generators to survive load shedding, they also count on new technologies to automate manual processes, operate and sell online, as well as reach new customers – and on their accountants to navigate regulations and complex tax requirements.”


Technology enables business survival and success.

The two most significant contributors to helping small businesses survive and grow in the past year were technology (41%) and their accountant (28%).


Nearly three-quarters (74%) say the importance of technology has increased in their business, with 43% reporting that technology has enabled them to reach new customers - up 13% compared to last year. And 39% say it has helped to boost profits.


As a result, over half (56%) of business owners have increased their investment in technology over the last 12 months, and 40% intend to build on this in the coming year.


The secret weapon of small businesses: the accountant

The research shows almost half (49%) of small businesses go to their accountants for business advice, well above any other source of advice - only 6% would turn to the government for guidance.


Small businesses also recognise the broader value accountants add, as 60% believe accountants are essential to economic growth. Nearly two-thirds (64%) say more skills development initiatives are needed from the government to support advisors.


“Government, banks, funders, accountants and technology companies must work collectively to support small businesses. Only concerted, collective efforts can help businesses navigate the challenges and complexities of operating in South Africa and help them become stronger, smarter and more successful,” says Timmis.


Investing in your people

The report revealed that small businesses are willing to invest in technology skills and support wellbeing.


86% invest in online or in-person training courses to increase knowledge and improve tech skills. Nearly half (48%) also budgeted to train their team in technology use and implementation.


There is also a strong focus on diversity and inclusion, with 77% of small businesses placing great importance on promoting diversity, equity, and inclusion in the workplace.

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