R5 trillion SME sector demands tangible backing

Small and medium-sized enterprises (SMEs) are the backbone of South Africa's economy, contributing more than R5 trillion in turnover, accounting for roughly 34% of the country's GDP, and employing 11.4 million people.

These vital economic engines drive innovation, create jobs, and fuel economic growth across the nation.

In this context, 84% of SMEs expect their businesses to grow over the next 12 months, 69% are confident the economy will be conducive to growth, and confidence in access to finance has risen to 64%.

At the same time, cash flow, economic conditions, and access to funding remain the top concerns, and confidence that clients will pay on time sits at 72%, up 3 points year on year.

This signals cautious but determined momentum despite ongoing pressures.

In the face of ongoing challenges and opportunities, South African entrepreneurs continue to demonstrate resilience and resourcefulness. But resilience alone is not enough.

Beyond encouragement: the need for tangible support

“What SMEs need now is more than encouragement, they need tangible support,” Trudy Maleka, founder of Ambesha Africa and 2024 Emerging Business Entrepreneur of the Year said.

Her call for action reflects the urgent need for a fundamental shift in how South Africa supports its small business sector.

Maleka advocated for a comprehensive support ecosystem that includes better access to funding, practical mentorship programs, skills development platforms, and meaningful involvement in policy decisions that affect the sector.

“We need a seat at the table when policies are made. No one understands SME challenges better than the people living them,” Maleka added.

The solution isn't just about money, it's about creating an environment where businesses can focus on growth rather than navigating bureaucratic obstacles. Simplifying regulatory processes is crucial for business owners to channel their energy into building rather than battling red tape.

The power of mentorship and community

James Barrington-Brown, founder of NewSpace Systems and recipient of the 2024 Innovator of the Year award, reinforced the critical importance of mentorship and collaborative learning environments.

“As the sole founder of my company, one of the best decisions I made early on was choosing an excellent business mentor. It's lonely and tough being a CEO, and having someone to bounce ideas off in a safe space made a massive difference,” Barrington-Brown said.

Barrington-Brown championed business incubators as powerful tools for SME development.

“They don't just offer affordable office space. They build communities where start-ups can learn from each other, share ideas, and grow faster.” For him, success in South Africa's challenging entrepreneurial landscape isn't about a single breakthrough, it's about having the right ecosystem in place," he added. 

Government and private sector: a partnership imperative

The path forward requires unprecedented collaboration between government and the private sector.

Maleka advocated for partnerships that can be “game-changers” for the SME sector.

The focus must shift from reactive support to proactive ecosystem building that addresses the fundamental barriers preventing small businesses from thriving.

Success stories: proof of concept

Both Maleka and Barrington-Brown credit platforms such as the Business Partners Limited Entrepreneur of the Year competition as pivotal moments in their entrepreneurial journeys.

These programmes demonstrate the transformative power of connecting entrepreneurs with mentorship, visibility, funding opportunities, and comprehensive support systems.

Since winning her award, Ambesha Africa expanded its product range, secured shelf space with a major retailer, and attracted new customers and talent.

NewSpace Systems continues to thrive under new leadership, while Barrington-Brown has shifted his focus to nurturing several start-ups and scale-ups within South Africa's emerging space sector.

These success stories illuminate a broader truth: South Africa's small business sector is brimming with potential.

With the right support infrastructure, these entrepreneurs can transform challenges into opportunities, creating sustainable businesses that generate employment and drive economic growth.

The country's SMEs have already proven their resilience and innovation.

Now they need the ecosystem to match their ambition, access to mentorship, funding, skills development, and simplified processes that allow them to focus on what they do best: building businesses that create value and jobs.

Entries for the 2025 Entrepreneur of the Year® Awards close on 31 August 2025. Entrepreneurs across all sectors are encouraged to apply at www.eoy.co.za.

BUSINESS REPORT