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Midlands Correspondent
THE Ministry of Small to Medium Enterprises and Co-operative Development has started a process of identifying about 20 vibrant small businesses per province with the view of incubating and graduating them into big businesses.
Business incubation is a unique and highly flexible combination of business development processes, infrastructure and people designed to nurture new and small businesses by helping them to survive and grow through the difficult and vulnerable early stages of development.
Small to Medium Enterprises and Co-operative Development Minister Sithembiso Nyoni told Business Chronicle that the move is part of the broader plan to ensure growth in the SMEs sector and job creation.
“I am moving around the country to identify small businesses, which have potential for growth. At the moment we are doing the feasibility studies before we take it up (business incubation) as a concept. We will select a few businesses that we will monitor, mentor and give all the necessary support and then let them work in their own workspace using their own resources,” she said.
“I am satisfied that if we are to follow this path we will transform SMEs into big businesses. We are targeting SMEs in manufacturing, engineering and other productive sectors of the economy and if we give these businesses support then they will form the foundation of our economy. We will identify about 20 businesses in each province.”
A 2012 study initiated by the Ministry of Small and Medium Enterprises and Cooperative Development and FinMark Trust indicates that the SMEs sector has created 5, 7 million jobs.
However, the study shows that about 80 percent of all small businesses fail within the first 18 months of operation and one of the reasons why most small businesses sometimes collapse is because the owners fail to keep basic business records.
According to the survey the sector contributes more than 60 percent of private sector employment and 35 percent of the country’s gross domestic product (GDP).
Online Reporter