As SMEs strive to solidify their presence in an ever evolving and competitive landscape, adopting a forward-thinking approach and leveraging key trends are crucial.
2025, here we go!
Or, if you’re an entrepreneur in the Small and Medium Enterprise (SME) sector, Here We Grow.
Despite South Africa's ongoing economic challenges that hindered growth last year, entrepreneurs continue to demonstrate resilience.
Data from Merchant Capital, a trusted provider of capital to businesses, reveals a shift in recovery as more entrepreneurs focus on scaling their operations and boosting their bottom line in 2025.
As SMEs strive to solidify their presence in an ever evolving and competitive landscape, adopting a forward-thinking approach and leveraging key trends are crucial.
Looking both locally and beyond our borders, four standout trends emerge—each with the potential to enhance the resilience that local SMEs are renowned for:
The first of these is that customer experience (CX) will increasingly be a differentiator between competitors. As markets mature and buyers become more discerning, delivering friction-free, hyper-personalised, memorable CX will be key to staying ahead of the competition. Applying lessons learned from the busy retail season, such as optimising e-commerce sites for faster navigation, or relooking logistic partners, can ensure a seamless customer journey from purchase to delivery.
The second is your business’ ability to pivot. Planning to be flexible will enhance your ability to weather supply chain disruptions, skills shortages, and even future pandemics, among other things.
While there is no universal answer for when to pivot, signs include spending significant time and resources without seeing progress, facing excessive competition, experiencing stagnant growth, or realising that your customers aren’t responding positively to your offering. Your bottom-line is also an important indicator of the need to pivot, and here it is critical to avoid making common money mistakes like letting cash reserves dip too low, ignoring your budget, waiting until the eleventh hour to get credit, under-pricing your offering, and mixing business and personal finances.
Cashflow is another key aspect to consider. Factors that impact negatively on cashflow include your revenue stream being unpredictable and creditors making late payments. To mitigate these, Daniel Moritz, CFO of Merchant Capital, suggests monitoring your cashflow, using data tools to forecast dips and surges, maintaining a reserve, and forming a relationship with a responsible alternative credit provider that can support you with flexible funding as and when you need it.
SMEs will gain some relief in 2025 with economists predicting a more than 1% economic growth and lowering of interest rates. Changes to the Employment Equity Amendment Act, implemented from January, no longer require enterprises with fewer than 50 employees to comply with B-BBEE requirements, irrespective of their turnover. Relieved of this administrative burden, smaller employers can now plough more of their time and energy into their day-to-day operations.
“At Merchant Capital, we’re thrilled to see what 2025 has in store for the SMEs we serve. We’ve seen in the past how a challenging operating environment presents opportunities for SMEs to thrive. This is the year of growth for entrepreneurs who want to open new doors, expand their reach, and take on bigger projects and contracts. We’re here to here to accelerate those ambitions,” Moritz said.
BUSINESS REPORT