Business stagnation is a solvable problem
Gerrit Botha
Director at Exco Capital | Building the largest Business Development community across Africa
Business stagnation is a solvable problem, I believe.
It’s a challenge that many of us face, but by addressing it head-on, we can unlock immense potential for growth, create more jobs, and stimulate economic activity. For South Africa, this means tackling inequality, unemployment and poverty, three critical issues that impact our society deeply.
I recently came across some startling statistics. Did you know that over 60% of small to medium enterprises (SMEs) in South Africa are struggling to maintain their revenue levels? Not unrelated, more than 90% of households struggle to keep up with school fees!
This isn’t just a statistic; it’s a real barrier to economic growth and prosperity, to quality of life. When businesses stagnate, they can’t expand or hire more people, perpetuating a cycle of unemployment and economic disparity.
Why this newsletter?
or, should we ask, why does it matter?
We aim to debate actionable insights, strategies, and expert advice to help businesses thrive. Also to share CEO and expert insights and thoughts.?
Understanding Stagnation and Its Cousins
So, what’s causing stagnation? And how is it different from other business challenges like stalling or crossing the chasm? Understanding these differences is crucial in diagnosing the problem accurately and applying the right solutions.
Here’s a comparative table of different business slowdown concepts, including their definitions, characteristics, and foremost authorities on the concepts:
Let's picture these definitions to make it more real. The graph below shows the business growth trajectory (Y-axis) in relation to the number of years (X-axis).
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?Moving Forward
Given these challenges, what can we do to move forward? One major factor is the lack of access to capital. Many businesses find it increasingly difficult to secure the funding needed for growth initiatives. According to the South African Reserve Bank, lending to SMEs has decreased by 15% over the past two years. This financial barrier prevents businesses from investing in new opportunities and scaling their operations.
Bonang Mohale, for example, emphasised the need for a multifaceted approach to addressing business challenges. He has noted that to overcome stagnation, we need to improve access to finance, enhance skills development, and create a supportive regulatory environment (How We Made It In Africa). This perspective aligns well with the strategies we need to adopt to address business stagnation effectively.
Engaging with You
I love to hear what your perspectives are in the industry that you know best.
Your experiences and insights are crucial, and I encourage you to share them.
Let me conclude this first edition by reiterating that I believe business stagnation is a solvable problem. By addressing key issues, we can unlock significant growth potential. This will lead to more jobs, increased economic activity, and greater prosperity for South Africa.
As Steve Jobs said at his famous 2005 commencement address at Stanford University, "Stay hungry, stay foolish."
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8 个月Brilliant concept.?
Director of Innovation and Commercialization
8 个月Gerrit Botha - Helping stagnated businesses Have you seen the recent survey that shows "crossing the chasm" is frequently misused and widely misunderstood? The most common mistakes and areas of confusion are listed in this article: https://www.hightechstrategies.com/chasm-crossing-confusion/ The author of this article is the original creator of the "chasm concept" before the book was written.
Business Development Professional
8 个月Great insight. In my experience I came across the following: Socio-economic factors plays a critical role in the development or growth of the SMEs. Or rather as you rightly pointed out ' stagnation is solvable' within any organisation. 1. Skills (personal development) Leadership or management is key within the SME space. In other words, business owners need to up-skill themselves so that they can keep up with the current trends or set new trends themselves. Businesses leaders or management, need to adapt to the ever changing economic environment. Failure to have right Skills/tools leads to stagnation. 2. Access to market (clients or customers) I am of view that, you can have All the funding you want and develop the services or products that are 1st class, but if you don't have clients or customers to sell them to.. then you will not see the intended growth (stagnation). It is important therefore, to foster change and economic transformation through access to the market for SMEs. So, there should be a deliberate intention to force big corporation to do business with SMEs and should be measured and quantified. 3. Government intervention Example: SMEs should be tax exempted in their 1st and 2nd year of operation.