Entrepreneurial risk management challenges of selected small and medium enterprises in the maritime industry in Cape Town

Abstract

Entrepreneurs are very important to the South African economy. Entrepreneurs use opportunities to establish new ventures, introducing new business ideas as well as establishing Small and Medium Enterprises (SMEs) in all industries. SMEs have emerged as an important tool to solve the triple bottom challenges, namely: poverty, unemployment and inequality. The purpose of this study was to examine eco-entrepreneurial risk management for SMEs within the maritime industry in Cape Town and the impact on business performance with specific focus on risk management, eco-friendliness and the main challenges faced by SMEs. A survey was conducted to gather data from selected SMEs in the maritime industry in Cape Town (N=60). Data was collected from sixty companies inclusive of high ranking officials, owners and managers. This was done due to the sensitivity and depth of information required as per the survey. Quantitative, qualitative and secondary data methods were employed in the data collection. Respondents for this study were selected through the use of convenience sampling. Quantitative data was analysed through SPSS V25.0 to generate descriptive and statistical results. Most of the SMEs in the maritime industry had an understanding of risks and their impact on the business well-being. The greatest challenge encountered, however, was on how to minimize the risks (risk management challenges). This was due to financial crises, lack of knowledge and expertise on the part of the owner managers regarding the issue of risk management. Some respondents found the question irrelevant as they lacked a proper understanding of eco-entrepreneurial risk management. They therefore regarded the survey as irrelevant to their businesses. The study has implications for entrepreneurs and managers. The lack of a risk management framework may result in reduced profitability and cost overruns. A standardised risk management structure could result in identification and mitigation of diverse risk factors.