A conceptual framework for determining sustainability of SMMEs in Lesedi
Buys, Johannes Petrus
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In South Africa there is high unemployment rates and poverty amongst a large part of the population. Entrepreneurship is identified by National Government and various research programs such as the Global Entrepreneurship Monitor (GEM) as a possible solution to the above socio-economic problems hampering economic growth of a developing region. It is however very difficult to start and grow a business that can last over time. This research report investigates the major problems associated with business sustainability of SMMEs and provides strategies for businesses to stay operational over time. The main aim of the study is to establish determinants of sustainability and reasons for success of SMMEs, based on a sample of small companies in Lesedi, Gauteng. Suggestions are made based on their unique experiences. The empirical study was conducted by means of a field study using a structured questionnaire. The reliability of the questionnaire was determined by the Cronbach alpha coefficient of the constructs. Data from 52 SMMEs were collected and analysed. The results indicate that most SMMEs in Lesedi are struggling to make profit and are generally unsustainable by measuring up the results against elements identified within the literature review. A total of 100 businesses restricted to Lesedi municipality in Gauteng were visited in the process of collecting the peer-aided questionnaires. The biggest problems of SMMEs in the sample were: gross profit control, marketing, strategic management, inventory control, information management, staff development, expense control, sourcing funds, time management and financial management.