The Need for A Small Business Accountant Near Cape Town in SA’s Changing Economy
Small Businesses in South Africa
Small businesses in South Africa are a valuable source of income and job creation for the economy, so it is important that they use all of the necessary resources to aid their success. Small businesses face a variety of challenges with regard to their financial well-being and stability, which is why they should invest in accounting services to assist them in the early phases of their start-up. This article will cover a variety of issues related to small businesses in South Africa, including the importance of small businesses for job creation, market opportunities for high-demand sectors, common challenges faced by entrepreneurs, and the benefits of hiring a small business accountant near Cape Town.
The Value of Small Businesses for Job Creation
South Africa’s unemployment rates are some of the worst in the world. In the first quarter of 2022, the unemployment rate decreased marginally by 0.8%, leaving it at 34.5%. In 2021, South Africa experienced its worst rate on record, with 35.3%. This was caused by COVID-19 and a high number of job losses.
South Africa has to address three key issues in its labour market, namely high rates of inactivity, high unemployment rates and low levels of self-employment. The recovery of the job market requires a focus on entrepreneurship because young business owners and freelancers have the power to fill the gap in self-employment in South Africa. Self-employed individuals are independent contractors, and in South Africa self-employment only accounts for 10% of all jobs.
Small, medium and micro enterprises (SMMEs) are incredibly valuable in South Africa, as they enhance self-employment rates and provide new work opportunities too. The National Development Plan has committed to creating 11 million new jobs by 2030, and it has been projected that SMMEs will be the driver of this economic expansion. The South African SME Fund created a report to determine the total number of SMMEs in SA. The following information was reported:
- There are 8 000 to 10 000 large businesses.
- There are 41 000 to 47 000 medium businesses.
- There are 25 000 to 29 000 small businesses.
- There are 73 000 to 84 000 very small businesses.
- There are 735 000 to 854 000 micro businesses.
Within this report created by the South African SME Fund, it was determined that 2 to 3 million people were employed full-time by SMMEs. Similarly, they found that medium businesses generated 39% of total jobs in South Africa. In the last 4 years, it was found that new businesses created 28% of all jobs. Evidently, SMMEs provide a large portion of the population with work.
With more SMMEs, South Africa can create an economic climate that is more conducive to international investment. This in turn would improve gross domestic products and help to develop the private sector. However, to do this, it is necessary for SMMEs to invest in a few key resources that can aid their growth, such as accounting services.
Small Business Opportunities in Cape Town and Beyond in 2022
Ecommerce refers to the sale and exchange of commercial goods and services via the internet. Due to the Covid-19 Pandemic, Ecommerce has expanded massively because of the demand for products and services that can be delivered to our doors. Ecommerce platforms have smaller start-up costs than most due to their digital nature, and they have seen a great amount of growth in recent years.
Since the evolution of the digital marketing industry, there has been a greater demand for graphic designers who can visually populate social media communication channels. Graphic designers are hired for the purpose of designing logos, creating social media templates, giving art direction or taking the creative lead in projects such as website design. Graphic designers are very necessary for the digital age, and many companies hire freelance individuals or independent agencies to handle their tasks on a project-based system.
Online Education Courses
The online education industry has expanded rapidly since the closure of schools and the migration towards online platforms during the pandemic. Online education can be a great source of passive income, as it requires a self-employed individual to develop a syllabus, record the classes, and then market them. Thereafter the course can generate money without the teacher having to engage further unless they want to expand beyond a limited static series.
Traditional advertising strategies have been pushed aside to make room for the massive potential audience and networks that social media offers. Digital marketing is a method of advertising that involves companies and small businesses using the internet to promote their brand. This may come in the form of email marketing, social media, blog posts or any other form of digital communication. Since 2020, this industry has experienced massive compound growth rates.
It is expected that the demand for app developers is going to increase from 17% to 24% between now and 2026. This is due to the growing number of smartphone users worldwide, which is currently around 3 billion people. Coupled with greater access to the internet, there is a consequent increase in demand for mobile applications. In 2018 the app market was valued at $106 billion, and it is expected to reach $407 billion by 2026.
Reasons to Hire A Small Business Accountant Near Cape Town
With such a great demand for job creation and an increasingly heavy reliance on SMMEs for economic growth and national development, it is vital to consider how we can improve the capacity and growth potential for small businesses. Small businesses face a variety of issues that prevent them from expanding to the point where they can hire more employees or generate considerable profit. Some of the issues they experience are listed below.
Lack of Funding
A lot of small, medium and micro businesses struggle to find funding in the early stages of their business development. Without this much-needed capital injection, it is unlikely that a micro business can expand to a point where there are more than 5-10 employees. Many self-employed individuals struggle to find funding programmes, and even when they do, they struggle to fulfil funding applications effectively because they lack the necessary financial statements to justify their position.
Difficulties Managing Financial Record Keeping
With a small team, it can be incredibly difficult to effectively track all of your expenses, incomes and profits – this in turn becomes an issue for tax deductions, as well as funding applications. Without the ability to present comprehensive financial statements, small business owners are less likely to qualify for business loans, funding programmes and more. Furthermore, without a legitimate track record, it becomes increasingly difficult for small business owners to project their growth or invest strategically, which ultimately leads to business stagnation or even failure. If you’re a Western Cape entrepreneur, then you can avoid this by hiring a small business accountant near Cape Town.
Lack of Collateral or Surety
Starting a small business is a massive risk, and many small business owners use their personal savings to help expand their business in its start-up phase. However, with so many initial costs to cover, there is always the chance that small business owners are susceptible to debt and other liabilities. To protect small business owners from losses, theft or fraud, it is recommended that they have some sort of surety bond or collateral. Collateral is an asset that can be used to secure a loan, and it is often a precondition for funding eligibility
Small business owners have to be particularly careful about who they allow into their business in its early phases. Start-ups require passionate, committed individuals who are keen to align their work ethic with the company’s growth vision. If an employee is dishonest, unreliable and untrustworthy, this will create a bad impression with your first clients and consequently give you a bad reputation. Similarly, start-ups are in a particularly vulnerable financial position, so if an employee is stealing funds or deliberately mishandling the bookkeeping then the company and its owner will suffer, making it difficult to attain funding or even turn a profit.
Poor Credit Records
If small business owners mishandle their finances and borrow money recklessly without timeously paying their dues, then they are at risk of gaining a bad credit rating. Having a bad credit rating can have a variety of bad consequences. For example, a bad credit rating prevents business owners from attaining loans, and it also causes an increase in loan interest rates and insurance premiums. This is why we recommend that Western Cape entrepreneurs seek help with their finances using a small business accountant near Cape Town.
Small Business Accountant Near Cape Town: Roles and Responsibilities
Small business owners often place a lot of pressure on themselves to do all of the work, and understandably so. Without much capital, it can be difficult to hire employees that are trustworthy, hard workers. However, when it comes to bookkeeping, Small business owners in the Western Cape should definitely consider the many benefits of spending a little extra money on a qualified small business accountant near Cape Town.
The personnel deployed by Surebooks are effective, certified accountants with years of experience and training. They are more than capable of helping any kind of business owner (small, micro, medium or even large) with their accounting. By hiring a small business accountant near Cape Town, entrepreneurs in the Western Cape are less likely to experience issues with their financial reporting, revenue growth, taxes and funding opportunities.
When it comes to start-ups, there are always massive changes and developments happening unexpectedly. So it’s important that small business owners are prepared to handle and effectively record every minute detail concerning profit and loss. When there is a specialised accountant on the team, small business owners will be better equipped to understand their financial position, and they can adjust their strategies accordingly. By outsourcing a small business accountant near Cape Town, business owners can look forward to having assistance in the following areas.
Financial Analysis and Advice
- Accounting Software Integration
- Tax Compliance
- Financial Health Consultation
- End of Year Report Compilation
- Preparing Financial Statements for Funding Applications
Hire a Small Business Accountant Near Cape Town Today
Accounting and bookkeeping are essential pillars of your business, and they cannot be done half-heartedly without having serious effects on your revenue. If you’re a small business owner who has concerns about the financial health of your business, then consult SureBooks today to find a qualified accountant who can help you with your bookkeeping and more. By investing in accounting services, you can free up time to focus on other aspects of your business, such as customer services, supply chain management, retail, marketing and strategising. By employing the help of a small business accountant near Cape Town, you can rest assured that your finances will be managed by the right people.