Why effective communication is important for SMEs

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Communication is an important part of marketing – how you communicate your message in terms of what your business offers and your value add is crucial.

Is there consistency to your messaging, which helps in building a good solid brand; whether it is on your website, your sales brochure or when you speak directly to your clients, and is it clear and easy to understand?

Communication is important in building strong customer/client relationships and retention.  All SMEs want to keep their existing clients as well as grow their client base.

Your clients will be more forgiving if for example, you are late on a delivery but you communicate this beforehand rather than just not saying anything. Don’t cause your suppliers, customers and staff frustration by not communicating timeously. Your customers will lose trust in you and you will lose them to your competitors in no time.

It is also important to get your communication foundation right from when you are small, because otherwise when you grow as a business, your communication issues and challenges will grow with you.

Practical tips for small business owners to become better communicators

  1. Create a communication- friendly environment. If you as the owner, value good communication, you will set the tone and encourage others to follow you.
  2. Hold useful weekly meetings with staff (time is money, so get to the point and don’t waste time talking about irrelevant items)
  3. Listen (news flash: you may not have all the answers) and if you don’t understand something, then ask for clarity and seek to understand.
  4. Ask for feedback. Yes- I this might be very uncomfortable for some of you, but you have to do this. This opens communication with customers and staff and will build trust and loyalty in your business.
  5. In the event of a crisis or conflict – Respond quickly; acknowledge what is going on and that you are attending to the issue. Don’t ignore the feedback or be in denial.
  6. Read objectively through all of your marketing material and customer communication – is it concise, clear and consistent? If not, review and make changes. You may need some help with this.
  7. Stop assuming everyone knows what is going on in your head. As small business owners, you are often having to run around performing many of the roles in the business, so you may be too busy to notice that not everyone is up to speed with what you are busy with, important information or challenges you are facing. No one is a mind reader. 
  8. Combine a few communication methods or different channels to best suit your clients & prospective clients. Not everyone loves email newsletters, but perhaps your clients prefer short mobile communication.
  9. Be aware of your body language (this speaks to non-verbal communication).  Actions speak MUCH louder than words, so make sure you are aware of what your body language is communicating, as it might be negative. Be professional at all times.

I do believe that as a small business owner, you need to be very honest with yourself– do a communication check, and what I mean by this is, how do you rate yourself as a communicator and communication levels in YOUR business? How do staff rate you, what are your customers saying? What do you need to improve, to help your business grow?

The good news is that every small business owner can improve on this. And you will improve in your personal life too. After all – we all want to be better communicators at home, with our kids, our spouses, our partners, family and friends.

Remember, the way you communicate will either enhance or inhibit your success and growth as a business. Paul J Meyer said “COMMUNICATION- The human connection – is the key to personal and career success. We couldn’t agree more! Jessica Cilliers is head of Marketing and Communication for SAICA Enterprise Development. Our vision is to play an active role in economic transformation in South Africa through advancing the sustainable growth of entrepreneurial Black businesses

OppiKoppi cancellation: hard knock on SMEs

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This week’s OppiKoppi cancellation is yet another example of how crime affects South Africans, particularly, small businesses.

Matchbox LIVE CEO Theresho Selesho, organiser of OppiKoppi announced in a statement on Wednesday that the 25th OppiKoppi music festival in the mining district of Northam, Limpopo, will not take place this year – after the 2018 event was ruined by criminals targeting attendees.

Having being expected to take place between August 8 and 10, Business Day says that the cancellation brings forth disappointment for SMEs who worked in preparing goods, designers, promoters and other creatives who had been part of the festival with the hope of strengthening their brand at the festival this year.

Hezron Louw of Sumting Fresh told Business Live that his business will feel the impact of the cancellation‚ as the festival provided a major boost to annual turnover. “There are people who sell firewood‚ others that sell liquor and meat. Even supermarkets [will feel the pinch] because people travelling from outside don’t usually stock up on what they will need until they get to the area‚” he said.

There will be a negative impact on local job creation and employment because “we also employ local people from Northam for the festival‚ train them on food safety and get them on board to work with us. We have had regulars who have worked with us for three to four years, but this year there will be no work for them‚” said Louw.

Braai Guru, a new and authentic enterprising meat company in Randburg, also told Business Day that they had hoped to take their business to a festival in the Netherlands in 2020 and say that “attending the festival was not just about the immediate financial gain but was used as a “springboard” to get access to international festivals.”

Selesho said: “By taking a gap year, we are giving ourselves the breathing room to redesign the festival and bring in the necessary changes without impacting the festival-goer by increasing ticket prices.”

Times Live featured posts from the event’s Facebook page of people’s safety concerns:

  • “I had a great time last year but the theft was out of control, which is making me sceptical of ever going again.” – March 24
  • “Too much theft going on. I can’t fully relax knowing I have to be alert at all times. Looks like the best of ‘Koppi is in the past with these tsotsis flocking after all the big festivals.” – January 14
  • “It’s a thief paradise, guys. Used to be well managed, now they steal everything. Won’t recommend it to anyone with anything of value. They steal everything, from food and cooking equipment to smashing windows, taking everything in your car.” – November 2018

“We’ve had some crime issues in the past, but this year (2018) was the worst,” Selesho said. Speaking to News24, he promised that the festival would return in 2020.

To curb the increasing crime rate and safety of the festival goers, Selesho says that “we are even investigating bringing the festival to a venue closer to a major city, to enable day tickets, less travelling and other options for the attendees.

Is your SME credit worth?

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At some point, every small business will require some form of credit which will be instrumental in enabling it to grow to the next level.

Valentine Jingura, Head of Pricing at FNB Business, said that without knowing and understanding the different forms of loans or funding mechanisms available, SMEs won’t be able to fully leverage credit to scale-up their businesses.

“Certain loans are suited for specific uses depending on the nature of the business and its requirements,” said Jingura, as he unpacks different forms of loans:

Alternate funding options 

Entrepreneurs often mistakenly assume that credit from banks is suitable for all their needs. In some instances your own equity, loans from private investors, family and friends, government funding and grants from Corporate Enterprise and Supplier Development Programmes (ESD) may be more suitable for early stage funding. 


Businesses are required to provide some form of collateral which financial institutions can use as security for the loan amount being provided. Security can be physical assets like property or financial instruments such as a savings account or share portfolio. 


This form of loan requires no collateral. The loan is granted based on the business’ financial standing and ability to repay the loan in the future. For example, short-term credit for an emergency or unforeseen event.  

Credit facility 

Allows the business the flexibility to withdraw, repay and re-use credit at its convenience. i.e. a business credit card or overdraft.

Commercial property finance 

This type of loan is used to finance the building or premises where the business will operate. i.e. a small office or large warehouse.

Asset finance

Is used to finance business equipment, vehicles and machinery.

When applying for credit it is essential for entrepreneurs to understand what lenders lookout for when reviewing a credit application. 

This can be practically achieved by answering these four questions:

1. How much money is needed and what for?

2. Does the business have a good credit standing or collateral if required?

3. Does the business understand its current vs future cashflow – and has the affordability of the loan instalments been stress tested?

4. How quickly will the loan be paid back?

“Before deciding on the type of loan you need to do your research and speak to your banker or expert to ensure you are utilising the best form of credit for your business,” concluded Jingura.

SAICA makes more entrepreneurs financially savvy

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The South African Institute of Charted Accountants (SAICA) today graduated 29 entrepreneurs from its Enterprise Development programme. This is part of the institute’s quest to make small business people financially savvy.

 “This is one of the favourite highlights of our year, when we get to celebrate the growth and development of these amazing entrepreneurs. What a privilege to have watched their journey over the past year, and they are praised for their tenacity and commitment to the programme. We believe that through our Financial Excellence programme, these entrepreneurs will be better positioned to access funding, to take their business to the next level,” says SAICA Enterprise Development CEO, Annie McWalter.

SAICA Enterprise Development (SAICA ED) believes that creating financially savvy entrepreneurs will help businesses grow sustainably and ultimately employ more people.

According to the institute, 90% of SMEs who received financial coaching in 2018 say their effectiveness and ability to achieve their business objectives have improved while 96% of the graduates say their business experienced a growth in turnover. Also, 62% of the participants recorded growth in Profitability and created additional jobs.

“My main obstacle was my lack of overall business and financial acumen, as well as understanding compliance and tax. But thanks to the SAICA Enterprise Development programme, I have turned my adversities into success.” Said Tshepo Molewa of E2tu, one of the beneficiaries of the programme.

SMMEs to explore with Wi-fi

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Wi-fi has become one of the most used facility to connect wirelessly to the internet, using whether a smartphone, or other devices and Small, Medium and Micro-Enterprises (SMMEs) can also use it to connect.

“Connectedness is vital for the survival of SMMEs, said Alex Granger, a global speaker at the fourth industrial revolution business breakfast dialogue that was recently hosted by Ithala in Durban.

He added: “Wi-fi should be a human right. There should not be this password protection. It should be free. We must be able to get into a bus and Wi-fi must work, walk in the streets of Durban and Wi-fi must work. That connectedness is critical, but it means that government leaders have to be forward thinking, discern what is coming and be willing to take the risk”.

Khwebo Online did an online research to find out how SMMEs can use Wi-fi to their advantage. Part of the benefits of having Wi-fi in your business is that it is viewed by customers as a necessity, especially if you are in the hospitality industry, customers can use Wi-fi while they are booking a hotel or looking for a place to go visit, they can use it while they wait (for businesses like auto mechanics, salons, doctor’s office and legal practices). It keeps customers busy while they are waiting and therefore makes time shorter.

Wi-Fi creates opportunities for customers to talk about their experience to their social networks. As a business owner, you get free promotion for your business across various social media platforms and social proof that can influence potential customer’s future decision-making.

Wi-Fi can also be used to increase productivity. Cloud-based apps (a software programme that relies on remote servers for processing logic that is accessed through a web browser with a continual internet connection) make it possible to get work done from just about anywhere and connect with partners around the world. The cloud enables you to back up your data securely so you can still access it from anywhere, no matter what happens.

Although it has disadvantages like not having full security. It is difficult achieve full security due to Wi-fi connection being wireless in nature. It requires proper security authentication protocols and configurations.

Wi-Fi devices operate in full functionality and without any interruptions when they are within the range of access point (AP) and receiving good signal strength. Wi-Fi access is limited to about 30 to 100 meters. The other thing is that in case the Wi-fi connection does not work, minimal troubleshootings are needed. This requires one to understand basics of Wi-fi device from user manual provided by the manufacturer.

Prices for a Wi-fi router starts from R200 and they go up to R7000 depending on the type of brand you buy and how many metres does the access point reach. The Economic Development, Tourism and Environmental Affairs MEC of KwaZulu Natal, Sihle Zikalala once said at the World Economic Forum’s 2018 outlook for jobs: “It is vital that businesses should pay attention to re-skilling and up-skilling their workforces for the fourth industrial revolution because it will bring success and reduce conflict such as that already witnessed between meter taxis and Uber, and it was crucial to prepare SMMEs to embrace technology.”

Zulu makes changes to the SMME Act

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“Many users found this size or class category unhelpful and inconsistent with international practice,” Zulu said in her Government Gazette notice.

After months of mulling over it, Small Business Development Minister Lindiwe Zulu has published a radical overhaul to the definition of micro, small, and medium-sized businesses.

This is the first big change to those definitions since 2003, Business Insider reports.

The new definitions introduce three different categories of enterprises, small, medium and micro. They do away with “very small” enterprises”. Companies with a turnover of up to R220 million can qualify as medium-sized – at least in the wholesale trade.

Consultations during the review had found that the “very small enterprise” class size was inconsistent with international practices and many agencies in South Africa found it to be unhelpful.

Last October, Minister Zulu announced that her department had commissioned the analysis and amendments to the National Small Enterprises Act. This is the Act that defines what an SMME is.

“Adopting the new definitions and the updated schedule will establish a platform for a ‘single version of the truth’ when reporting and measuring the impact of investment in the SMMEs on economic growth and job creation,” the minister said at the time of announcing the commissioning.

Another reason for the revision was to promote consistency in the use of the terms in order to align government policy and legislation.

The definitions are applied in a number of ways, most notably in determining which companies qualify for tenders set aside for SMEs, and for various incentives and forms of assistance aimed at promoting small businesses.

Has black business finally found its elusive voice?

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The above question comes to mind following a rare show of unity among some of the key black business organisations at the Black Business Council’s (BBC) Summit.

The Summit, which culminated with a dinner addressed by President Cyril Ramaphosa last Friday, was one of the rare occasions in recent times where institutions established post -1994 to drive Black Economic Empowerment (BEE) and black business were under one roof to plot how best to crack the vexing issue of black participation in the country’s economic mainstream.

Apart from the who is who in black business, who either attended or spoke at the summit, the gathering also became a platform where black capitalists, with capital, came together to bail-out the BBC from a R7m financial hole. Five black business people, including former Nafcoc President Patrice Motsepe, pledged R12m to help ease BBC’s financial woes and enable it to honour its debt to the South African Services. Motsepe pledged R6m to that course.

Nafcoc President Sabelo Macingwane was part of a panel discussion with the Minister of Small Business Development, Lindiwe Zulu on Thursday afternoon. He was also part of the special guests invited to the dinner.

Macingwane’s participation at the BBC’s event is interpreted as a sign that the BBC and Nafcoc are smoking a peace pipe, after tensions that followed the BBC AGM in 2018.

This positive reach out between the two organisations was also evident when BBC President, Sandile Zungu, attended and spoke at Macingwane’s inauguration in eNgcobo in the Eastern Cape at the end of January this year. Also present at the gathering were two former Nafcoc Presidents, Buhle Mthethwa and Lawrence Mavundla.

Former BBC Presidents Ndaba Ntsele and the controversial Danisa Baloyi also showed face.

In addition to Ramaphosa, four members of his cabinet, participated as speakers during the two-day summit while two attended the dinner.

High profile participation by the senior ministers, the likes Public Enterprises Minister, Pravin Gordhan, Mineral Resources Minister Gwede Mantashe, Transport Minister Blade Nzimande and Zulu, has been interpreted as another sign of validation for the BBC and newly found relevance.

For his part, Ramaphosa emphasised the need for business unity in South Africa and implored black business to not only foster unity within its own ranks, but also look to business unity with other business formations in the country going forward. “When President Xi (Jimping of China) goes on an international trip, he takes with him a big business delegation and the preparation is done before hand to make sure Chinese business speak in one voice. In our country, that has proven to be a challenge because of the fragmentation of business. So, I appeal to the BBC to give the issue of business unity a serious consideration,” he argued.

Previous attempts to foster business unity hit a snag in 2011 when black business broke away from Business Unity South Africa (BUSA) to relaunch the BBC, citing domination and intransigence from white business groups such as Business Leadership South Africa (BLSA)

Ramaphosa added that BEE was far too important to be left only to legislation or “a commission here and there”. His comment was in reaction to pressure from the black business fraternity for the BEE Commission to be given more teeth and resources to do its monitoring work properly as well as the scrapping of the Preferential Procurement Policy Framework Act (PPPFA), which they see as anti-transformation.

He assured then BBC that the PPPFA was being amended, but went on to the encourage black business to “take advantage” of the environment created by the “new dawn” to penetrate the economic mainstream, through partnerships with big business and looking beyond the Limpopo for opportunities, especially now that South Africa has ratified the African Free Trade Area treaty.

With government looking like it is listening to black business and the Enterprise Supplier Development (ESD) budgets estimated at around R80bn in SA today, a strong BBC, working together with some of its key affiliates like Nafcoc, the country could be on the verge of an economic miracle propelled by the small black business as the ESD funds are unlocked, hence cracking the unemployment conundrum for the first time in three decades. However, the jury is still out on whether black business will rise to the challenge in its newly found muscle.