Transforming small South-African businesses to medium and large enterprises through entrepreneurship development
Tirhani Mabunda, Krishna Govender
In view of the poor performance of SMEs in South Africa, particularly start-ups, and considering that current government interventions and initiatives do not seem to be producing the desired results, this research explored alternative methods of stimulating and promoting SME development. An explanatory qualitative study was conducted by interviewing four opportunity (high-impact) entrepreneurs using semi-structured open-ended questionnaires. The main finding was that current SME policies and programs are focused largely on stimulating behavioural entrepreneurship and entrepreneurial business activity, with a bias towards new venture creation and start-up activity as the barometer. This resulted in a skewed focus towards the stimulation of necessity entrepreneurship and promotion of start-ups which are prone to high failure and tantamount to self-employment. The primary conclusion was that start-ups fail, not because they are not viable ventures, but because the owners do not understand the complexity of navigating a business from inception, through its growth and expansion stages. Thus, it is recommended that a new ecosystem of entrepreneurship coined ‘enterpriseneurship’, be established, whose objective is to support existing high-impact SMEs to withstand the start-up pains and migrate successfully to the growth and development stages.