Eskom’s forecast of planned load shedding in 2015 does not bode well for growth in the small and medium enterprise sector (SME), according to Business Partners Limited. While SME owners were cautiously optimistic that the current economic environment was conducive for business growth in 2015, factors such as the country’s constrained power supply were impacting confidence levels, according to Gerrie van Biljon, an executive director at Business Partners Limited.

1. Business Partners Limited
SME Confidence Index
Third Quarter of 2014: July – September
Issued December 2014
1

2. RATIONALE FOR THE BUSINESS PARTNERS LIMITED SME CONFIDENCE INDEX
2
•SMEs are often punted as economic growth generators that will help solve the country’s unemployment, poverty and inequality problems.
•Whilst we all view SMEs as the engines of economic development and job creation, we have in the past not had credible information on the sector and confidence levels within the sector.
•In July 2012, Business Partners launched its quarterly Business Partners Limited SME Confidence Index to obtain the views of SME sector entrepreneurs with the view to:
oGauge the current buoyancy of the SME sector;
oUnderstand the key social and economic issues affecting SMEs in South Africa.
•The index and survey results are made available to stakeholders so that they may create and shape an environment which is conducive to SME growth.

3. 01
3
BPL SME CONFIDENCE INDEX SURVEY SAMPLE

4. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
4
1 -10
10 - 20
20 - 50
50 - 200
over 200
How large, in terms of full-time employees, is your business?
75.84 %
11.86 %
6.49 %
4.03 %
1.79 %

5. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
5
Have you appointed new employees in the last year?
Yes
No
50.11 %
49.89 %

6. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
6
Have you appointed new employees in the last quarter?
Yes
No
66.74 %
33.26 %

7. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
7
How long has your business been in operation?
less than a year
1 - 3 years
3 - 5 years
5 - 10 years
over 10 years
27.74 %
19.91 %
9.17 %
26.62 %
16.55 %

8. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
8
In which province do you operate?
Eastern Cape
Free State
Gauteng
Kwazulu-Natal
Limpopo
Mpumalanga
North West
Nothern Cape
Westren Cape
Country Wide
Outside of South Africa
1.79%
15.88 %
13.65 %
10.29 %
8.5 %
35.12 %
6.49 %
6.26 %
5.37 %
23.71 %
8.50 %

9. Agriculture, hunting, forestry and fishing
Mining and quarrying
Manufacturing
Electricity, gas and water supply
Construction
Wholesale and retail trade
Repair of motor vehicles, motor cycles, personal & household goods
Hotels and restaurants
Transport, storage and communication
Financial intermediation insurance, real estate & business services
Community, social and personal services
Consulting and training
Creative, media, pr and event management
It and technology
Health and medical
Other(please specify)
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
9
In which industry do you operate (Based on the Standard Industrial Classification)?
1.57 %
3.13 %
3.8 %
16.33 %
5.15 %
9.4 %
0.45 %
6.04 %
5.59 %
14.32 %
4.92 %
4.25 %
1.79 %
6.71 %
6.71 %
9.84 %

10. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
10
What is the average age group of the business owners?
21 - 35 years old
36 - 45 years old
46 - 55 years old
56 - 60 years old
Older than 60
29.71 %
11.79 %
27.66 %
25.62 %
5.22 %

11. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: SURVEY SAMPLE
11
Is your business female, male or jointly owned?
Female
Male
Jointly owned
51.35 %
15.32 %
33.33 %

12. 02
BPL SME CONFIDENCE INDEX SURVEY RESULTS
12

13. CONFIDENCE LEVELS
13
On a scale of 1 to 5, SME owners were asked to rate their level of confidence on a range of topics from economic growth, business outlook and ease of doing business.

14. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
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How confident are you that your business will grow in the next 12 months?
1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
7.54 %
43.31%
16.79 %
29.20 %
3.16 %
SMEs expressed average confidence levels of 75% (Unchanged from Q2 of 2014) that their business will grow in the next 12 months.

15. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
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1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
14.81%
20.87%
25 %
7.04 %
32.28 %
How confident are you that the SA economy will be conducive for business
growth in the next 12 months?
SMEs expressed average confidence levels of 55% (Down 3% from Q2 of 2014) that the SA economy will be conductive for business growth in the next 12 months.

16. 16
How confident are you that ease of access to business finance will improve
in the next 12 months?
1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
29.98 %
16.46 %
17.44 %
11.30 %
24.82 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
SMEs expressed average confidence levels of 51% (Down 1% from Q2 of 2014) that the ease of access to business finance will improve in the next 12 months.

17. 17
How confident are you that current labour laws are conducive to the growth
of SA businesses?
1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
30.54 %
7.64 %
12.56 %
25.37 %
23.89 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
SMEs expressed average confidence levels of 38% (Down 4% from Q2 of 2014) that the current labour laws are conductive to the growth of SA businesses.

18. 18
How confident are you of finding staff with the right skills set and experience
to facilitate the growth of your business?
1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
18.29 %
29.27 %
18.05 %
29.76 %
4.63 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
SMEs expressed average confidence levels of 60% (Down 1% from Q2 of 2014) that they will find staff with the right skills set and experience to facilitate growth in their businesses.

19. 1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
19
How confident are you that the government is doing enough to foster SME
development in SA?
20.64 %
7.37%
10.32 %
26.54 %
35.14 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
SMEs expressed average confidence levels of 34% (Down 5% from Q2 of 2014) that the government is doing enough to foster SME development in SA.

20. 1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
20
How confident are you that your clients will pay you within the stipulated
time?
17.69 %
34.15 %
10.81 %
33.66 %
3.69 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
SMEs expressed average confidence levels of 63% (Down 1% from Q2 of 2014) that their clients will pay them within the stipulated time.

21. 1 - Not confident
2 - Somewhat confident
3 - neither confident nor diffident
4 - confident
5 - very confident
21
How confident are you that the newly introduced Ministry of Small Business
Development will aid small and medium businesses?
30.71 %
12.53 %
15.48 %
14.50 %
26.78 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: CONFIDENCE LEVELS
SMEs expressed average confidence levels of 46% (Down 3% from Q2 of 2014) that the newly introduced Ministry of Small Business Development will aid small and medium businesses.

22. IMPORTANCE LEVELS
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On a scale of 1 to 5, SME owners were asked to rate the level of importance placed on issues such as mentorship, access to finance and SME specific information, resources and support

23. 1 - Not important
2 - Somewhat important
3 - neither important nor insignificant
4 - important
5 - very important
23
How important is access to finance to the growth and sustainability of
your business?
49.63 %
15.40 %
19.07 %
4.65 %
11.25 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: IMPORTANCE LEVELS

24. 1 - Not important
2 - Somewhat important
3 - neither important nor insignificant
4 - important
5 - very important
24
Please rate how important you believe having access to SME specific
information, resources and support is the development and growth of
your business.
45.91 %
1.99%
31.76 %
4.69 %
15.38 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: IMPORTANCE LEVELS

25. 1 - Not important
2 - Somewhat important
3 - neither important nor insignificant
4 - important
5 - very important
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: IMPORTANCE LEVELS
25
Please rate how important you believe having a mentor is when it comes to
the development and growth of your business.
48.26 %
3.98 %
28.61 %
4.23 %
14.93 %

26. 1 - Not important
2 - Somewhat important
3 - neither important nor insignificant
4 - important
5 - very important
26
Please rate how important you believe social media is to market your
business effectively?
40.20 %
2.73 %
31.02 %
7.44 %
18.61 %
BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: IMPORTANCE LEVELS

27. ASSISTANCE REQUIRED TO OVERCOME CHALLENGES
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SME owners were asked to rate assistance required to overcome challenges. The list of challenges was provided.

28. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: ASSISTANCE REQUIRED TO OVERCOME CHALLENGES
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What form of assistance from government would benefit you most as an entrepreneur/aid the growth of your business?
0
2
4
6
8
10
Less red tape
Funding
Tax break
Prompt payment processing
Implementation of existing policy for
economic growth by government
Mentorship
Direct business flow from government

29. BUSINESS PARTNERS LIMITED SME INDEX Q3 OF 2014: ASSISTANCE REQUIRED TO OVERCOME CHALLENGES
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What is the main challenge that SMEs will face in the next six months?
0
2
4
6
8
10
Economic conditions
Cash Flow
Funding
Crime
Regulatory
Marketing
Skills

30. THANK YOU
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