Keeping up to date with the latest and relevant South African business news is important so this month we had a look at a report done by Xero which evaluates the state of small businesses in South Africa and considers 200 accountants and 400 small business owners. The aim: to get a better idea of the challenges they face, the rewards and where their minds are at.
The findings indicate a year marked with mindsets that have been significantly affected by instability and uncertainty. This comes in the wake of major issues in infrastructure that is holding technology back; namely load shedding and poor internet connections.
59% of the participants indicated that scheduled power outages posed a significant challenge while 43% said that their internet connection was not reliable. Together these problems hinder any kind of digital progression or the desire to upgrade technologies which is evident by the 53% of participants admitting to not using cloud technology yet despite having had the plans to do so.
Connectivity is not the only problem our small businesses face. Other challenges include new technologies entering the market and their compatibility with customers. Tie this in with unreliable power supply and internet and you are left with businesses falling behind, lacking in confidence and self-esteem. 67% of businesses said that, even though they regard Information technology as ‘essential’, they don’t plan on allocating a budget to training employers to use technologies. This consequence of the setbacks is unfortunate seeing that technology is constantlychanging and employees require training to stay up to date to get the best out of both them and the software.
Despite the doom and gloom, South African small businesses remain steadfast and hopeful with 38% saying that their IT set-up was ahead of the curve, 56% claiming to make use of basic automation and 19% making use of cloud computing. This willingness to adopt new technology has been rewarded with a 98% increase in profits and efficiency. Hope is not all lost.
There has also be a shift to using the services of online finance and accounting services with 79% of the participants finding accounting software to be very important and 29% opting to use accountants to handle their finances and consultancy. Small businesses and accountants are naturally becoming more tech savvy and seeing the transformation and reward of using online services, software and making use of the cloud.
Challenges remain but the results from this year’s Xero study of the state of small businesses in South Africa shows promise and determination to embrace technology and work through the hurdles.
If you’re interested to find out more about Xero, contact us at firstname.lastname@example.org.