Louise van Scheers, University of South Africa, South Africa
Abstract: It is estimated that the failure rate of small, medium and micro enterprises (SMEs) is between 70% and 80%. Millions of Rands are being lost on business ventures because of essentially avoidable mistakes and problems. It is maintained that often the ideas are good and the people behind them are competent, but “they do not have a clue of how to run a business” and have no underlying appreciation of business fundamentals. Problems encountered by small businesses are numerous and can be described amongst others as being environmental, financial or managerial in nature. The objective of this chapter is to establish to what extent owners/managers of spaza shops (small family businesses) in a typical South African setting, experience selected problems or issues as negatively influencing the success of their small business. The spaza shop is as a small family owned business who sells goods from home in the black suburbs of South Africa. Spaza is a Zulu word meaning ‘hidden’ or ‘camouflaged’. As a result of strict legislation in the past, spaza shops traded in secret. Up to January 1989, spaza shops were illegal, but were then legalised on condition that they obtained a trading licence (Marketing Mix 2000:12). Further to this, the aim is to investigate whether relationships exist between these problem categories and selected demographic factors. A questionnaire was constructed and judgment sampling was used to solicit the responses of 300 spaza shops. The following were identified as the most prominent problem areas influencing small businesses in the Gauteng area of South Africa namely, economic factors, competition, socioeconomic problems and change. Significant relationships were identified between demographic variables such as management qualification and background of the respondent and certain problem categories.
Keywords: Spaza shops; South Africa survival rate of SMEs; African entrepreneurs; family grocery shops marketing convenient products