As South Africa gears up for the 2017 National Budget Speech in anticipation of Finance Minister Pravin Gordhan to deliver Government’s planned expenditure and focus areas for the year ahead, a few of the 2016 Entrepreneur of the Year® competition winners shared some of their expectations for the upcoming speech.
Johan Eksteen, MD of Agricon and overall Entrepreneur of the Year® winner said that he hopes to see tax relief for small businesses, incentives and support to increase exports and plans to promote production in order to create more jobs in South Africa. “Ultimately, local entrepreneurs need to focus on the positive outcomes of the speech in order to pin point where the opportunities lie,” he said.
Agreeing with the importance the budget speech has on small and medium enterprises (SMEs), Michael Roberts, MD of Khonology and 2016 Job Creator of the Year®, said that the budget speech has a direct impact on small businesses as the outcomes and policy decisions will dictate yearly strategies and the ability to manage a business’ risks and position it for further growth. “The policy outcomes will also determine the tax impact on payrolls and company liabilities and I hope that policies introduced this year will reward companies for taking on additional capital to accommodate the growth of businesses within South Africa,” he added.
“Taking into account the advice of entrepreneurs, the Finance Minister might want to consider providing a further tax relief for small businesses by lowering the 28% Companies Tax rate imposed on the first R550 000 of taxable income,” says Christo Botes, spokesperson for the 2017 Entrepreneur of the Year® competition, sponsored by Sanlam and BUSINESS/PARTNERS. “Since SMEs contribute at least 36% to national GDP in South Africa, we owe it to them to create an economic environment that stimulates growth and promotes opportunity. It is for this reason that the finance ministry would do well to consider the needs of SMEs when tabling its budget for the 2017/18 period.”
Meisie Nkosi, Small Business Entrepreneur of the Year® and MD of Bella Bonni Guest Houses, agreed that the Budget Speech can assist a business with future planning and help predict whether the business can expand or not. “For instance, key outcomes around issues such as tax and processes to minimise red tape, can have a direct impact on the bottom line of a small business, and in turn, its growth and survival,” she explained.
She continued to say that she hopes to see revolving funds for SMEs with less red tape, an improvement on infrastructure development in energy, roads and water, as well as a tax break for SMEs.
“Improved access to finance for SMEs can be done by ensuring that funding by Development Finance Institutions such as the National Empowerment Fund is made available at an even lower cost than what is currently being provided, and, whenever possible, the expertise and experience of private sector service providers and financiers should be called upon to scale-up the provision of finance to SMEs,” adds Botes
In order to assist fellow entrepreneurs with budgeting advice for the year ahead, the 2016 Entrepreneur of the Year® competition winners shared their top tips for small business owners for the year ahead:
Michael Roberts: “Firstly, business owners should manage their cash flow effectively and address cost containment in line with cash flow ability. Secondly, business owners need to work with capital correctly as it is the growth enabler needed within a business.”
Meisie Nkosi: “Business owners should be aware of the risks within their business, as well as budget slightly above anticipated costs to cover unforeseen spending. Budget planning should also be revisited regularly.”
Johan Eksteen: “Know your business’ figures as this will ultimately allow you to effectively measure its performance and set goals for the year ahead.”
Botes adds that while it is important for SMEs to manage their cash flow effectively, it is just as important for government and private sector procurers to pay businesses on time all the time. The Office of Chief Procurement Officer last year announced that about R100 billion was withheld from the economy because of government departments’ failure to pay on time. “It would be a great display of commitment to SMEs’ sustainability for the Minister of Finance to update South Africa on the performance of the walk-in payment call centres in the crackdown on late payments and announce further concrete plans of ensuring that government entities pay SMEs within the stipulated 30 days,” Botes concludes.