Survey: 96% of SA startups lack government support

Red Tape

According to a new study done by online accounting and payroll provider Sage, 96% of startups in South Africa say they have had no assistance — financial or otherwise — from national government in building their businesses.

These figures echo the findings of the Ventureburn Startup Survey earlier this year, which revealed that a mere one percent of startups relied on government for funding.

The Sage study further found that startups are incredibly hard working, if not overworked. More than half (54%) of the businesses surveyed have not taken a holiday last year, and that 70% put in more time than the standard 40-hour-week to grow their businesses.

Read more: No surprise: funding the biggest hurdle for SA’s startups

The study revealed that 32% of the respondents expect to hire more than five employees in the next two years. Highlighting the importance of the small business sector to the local economy, a further 10% plans on hiring hire as many as 20 employees in two years.

Ivan Epstein, the CEO of Sage AAMEA (Africa, Australia, Middle East and Asia), said in a press release that South Africa thus needs more support structures for these “heroes”, who are willing to make a great personal sacrifice in the name of economic growth and job creation.

Against this backdrop, it is encouraging to hear the Ministry of Small Business call for the private and public sectors to work together to invest in and support small businesses and cooperatives to reduce the levels of poverty in South Africa. The right kind of support from government could change the trajectory of the local economy as a whole.

Business owners outlined the top five things they want to see from our government: control energy and utility costs, reduce red tape, simplify labour regulation, reduce business rates and taxes, bring stability to foreign exchange rates.

“One of the biggest barriers to the success of SMEs in South Africa is education,” added Epstein.

“It would be a wonderful, positive opportunity to work with government to help SMEs face challenges like regulatory compliance, access to finance, skills development and mentoring.”



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