Challenges to the sustainability of small, medium and micro-enterprises in the Western Cape, South Africa

Abstract

Small, micro and medium enterprises (SMMEs) play many significant roles in the South African economy, amongst which job creation and increased income stand out. New SMMEs are established frequently because they are relatively cheap to create but possess great potential to generate economic growth and improve the life of the owner. However, South Africa faces a major problem with the very high unsustainability rate amongst new SMMEs. Furthermore, understanding and identifying the main causes for the unsustainability of SMMEs has been the focus of past research projects. There has been a lack of an in-depth, face-to-face and historical review of this specific issue, which is the gap that this research study seeks to bridge. For the purposes of this study, a random sample comprising 14 entrepreneurs within the Cape Town area, who managed their own SMMEs, was selected. These participants were interviewed using an interview guide that contains 15 open-ended questions. The data obtained from this process was analysed using qualitative research methodologies. The researcher believed that the revised approach to this study that involved a detailed review of the issue, making use of a retrospective approach would afford an in-depth understanding of the historical causes of SMMEs’ unsustainability and provide recommendations that would help reduce this problem.