Identifying challenges of black-owned SMMEs in the Sedibeng Region
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Since the fall of Apartheid, the South African Government has engaged in a number of transformation programmes to allow the Previously Disadvantaged Individuals to participate in the mainstream economy of the Country. The Government set about transforming the Country from a racially exclusive society into one that allows full participation by all its members. This has been done through the launch of Black Economic Empowerment (BEE) that includes measures such as Employment Equity, skills development and preferential procurement. The launch of BEE resulted in the explosion, into the mainstream economy, by emerging black-owned Small, Micro and Medium Enterprises (SMMEs). Since then, SMMEs have contributed significantly to the economic growth and employment of a significant number of individuals throughout South Africa. However, emerging black-owned SMMEs have a tendency to fail to develop into sustainable enterprises. In Sedibeng Region, a significant number of these organisations remain unsustainable, their performance unsatisfactory and majority continue to fail. As a consequence, a study was conducted to identify challenges of black-owned SMMEs in Sedibeng Region. The primary objective of the study was to determine ways of improving the business performance and success of emerging black-owned SMMEs in Sedibeng Region. A literature survey was conducted to acquire information regarding the critical success factors of emerging SMMEs and the contributory factors to their failure. The status quo investigation, in terms of situational analysis of what is taking place in the Region regarding the performance and/or non-performance of SMMEs, was conducted. The sample method used in this research was a random sample and all subsets of the frame were given an equal probability. The instrument used to collect data was through a self-administered questionnaire that was used to interview owners and senior managers of the relevant organisations. In total, 125 questionnaires were distributed with a response of 80%. For statistical data analysis, Microsoft Excel and PH Stat programmes were utilized to get the mean of the sample. The study concluded that lack of qualified, experienced and skilled personnel has denied the black-owned SMMEs to grow and that the majority do not have marketing and technical skills to enable themselves to expand their client bases. The challenges facing these organisations (black-owned SMMEs) in Sedibeng Region were found to be lack of capital, difficulty in accessing finance, difficulty in accessing credit facilities, lack of access to work opportunities, delays in payment and lastly lack of resources.