With a young population, rising middle class, and enduring entrepreneurial spirit, South Africa is well placed to untap its significant potential despite obvious challenges. From prioritising innovation to leaning into the nation’s thriving township economy, here are the areas every SME should prioritise to achieve sustainable growth in 2024.
Technology levels the business playing field for SMEs. Digital tools empower smaller companies to maximise their resources and scale their offerings to better compete with larger peers. Moreover, digital automation standardises procedures to ensure consistency and frees up valuable time and resources to focus on other business areas.
The key is to identify and deploy the most suitable technology levers – digital tools and solutions that enhance competitiveness for SMEs along the value chain. However, investing in tech requires the right talent and support to achieve its full potential and, ultimately, enable growth. Ensure you have the know-how to optimise your tech efficiency.
In 2024, turn your focus to social commerce. Robust investment in your e-commerce capabilities and skills (and capacity) will position your business to take advantage of South Africa’s soaring social commerce industry, poised for a 60% annual increase to reach US$1.4 billion in 2023. Platforms like Instagram and WhatsApp empower SMEs to market directly to their customers on their preferred platforms.
According to a recent report by Meltwater, South Africans spend, on average, three hours and 44 minutes daily on social media, predominately WhatsApp, Instagram, Instagram, and TikTok. And with only 59% of internet users active on social media, the growth potential is significant. Tapping into social commerce and its supporting technology platforms enables your business to meet your customers where they are.
Innovation is the bedrock of growth. Prioritising innovation means you are proactively disrupting outdated processes to establish more efficient ways of working, ultimately doing more with fewer resources. In practical terms, innovation at work starts with a firm commitment to being more exploratory, essentially encouraging and testing new ideas.
Leading up to 2024, put the wheels in motion to design a workspace where information flows, and teams can easily collaborate and share experiences. Provide your team with space to test and pitch new ideas, foster a culture of debate, and build trust between members. To establish a culture of innovation, employees need time and space to break from their routine and share ideas, from in-office brainstorming sessions to an offsite company retreat. Put these sessions in the diary and ensure team members understand the challenges you are trying to solve. Pose specific questions to guide the ideation process and ensure employees feel safe and comfortable to share their thoughts.
Put any new initiatives into motion as soon as possible so employees can witness their impact and remain motivated to share. Allowing teams to push boundaries, experiment, and learn from mistakes creates ongoing innovation.
Also, consider hiring people with different perspectives or backgrounds to put a new lens on the same challenges. Diversity in the workplace is a catalyst for fresh thinking and innovation. Alternatively, ensure your existing staff regularly attend training courses to inspire new thoughts and approaches.
The township economy
South Africa’s township economy is a promising economic driver, providing fertile ground for new business opportunities. With an estimated total market value of R900 billion, the importance and scope of this thriving economy are often underestimated.
The key to cracking the township economy is identifying pressing problems and creating sustainable, scalable solutions. The market offers stunning opportunities for entrepreneurs across all industries, from healthcare to tourism. Its immense potential is further compounded by private sector and provincial government initiatives that lead to infrastructure improvements like connectivity or cloud zones and access to decentralised financial services.
Get a head start on your competitive advantage and consider how your business can tap into the township economy. Data remains limited, so ensure you make the right call by researching thoroughly and leaning into on-the-ground experience to capitalise on trends like fast-growing spaza shops. It might take longer to prepare, but the potential is undeniable.
Now’s the time to reorganise and invest in your business infrastructure to ensure plain sailing in 2024. What are your biggest challenges or the biggest threats to profitability? Write them down and create a strategy to address each point.
If load shedding hurts your turnover, investing in alternative energy is the smartest decision for your business. As more companies tap into global ESG requirements, they will look to their suppliers to do the same. The widespread South African energy crisis offers an ideal opportunity to contribute towards the green economy via solar installations.
Particularly the commercial and industrial sectors with high electricity usage and large premises suitable for rooftop solar installations. Moreover, the government’s latest solar PV tax incentives offer businesses an upfront, higher-than-cost deduction of 125%. The incentive applies to new and unused energy assets for two years, effective from March 2023 to February 2025.
Over the past few years, ongoing cost-of-living increases have rendered South Africans strapped for cash. And with rising interest rates and petrol hikes set to continue for the foreseeable future, SMEs have to mitigate production cost hikes and squeezed consumer budgets.
Taking a strategic approach to pricing, which entails striking a good balance between remaining competitive and maintaining profitability, ensures your profits remain stable. During turbulent times, enlisting the help of a pricing expert is vital to ensure your products and services are protected against cost pressures. Pricing is a powerful business tool that creates more customer value by changing how you price. Popular strategies include charging for usage instead of a fixed rate or bundling products and features. Either way, strategic pricing is key to maintaining and increasing sales in a hugely price-sensitive market like ours.
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