By Zandile Majavu
SMMEs might want to leap to global expansion in 2024 as local markets continue to become saturated. Tapping into other international markets that would readily buy their products could increase the chances of small businesses growing. After last year’s economic roller coaster ride, penetrating the global market is not a bad idea, attests Small Business Institute (SBI) CEO John Dludlu, as he explains that the goal for SMMEs is to graduate to larger businesses. “On the face of it, it may seem a contradiction to suggest that small businesses should be global businesses as well.
Our view, however, is to think of small businesses as businesses in transition, not an end state,” said Dludlu. Dludlu adds that several key enablers can make it possible for small businesses to broaden their operations to a global market, such as technology, especially the internet, and artificial intelligence. “The other is the implementation of the African Continental Free Trade Area (AFCFTA) pact. The agreement creates a single African consumer market with less or no tariff and non-tariff barriers. This is a great opportunity for Africa’s SMEs, as ours is a continent of mostly small firms and a few state-owned enterprises and dominant multinationals,” said Dludlu.
Meanwhile, National Small Business & Cooperative Association (NSBCSA) spokesperson Thabang Baloyi said that establishing a global consumer base for small businesses is important because it provides an opportunity for seasonal products to continue selling in other markets where there is a need and demand. “It also demonstrates that the SMME seeks to grow and expand as part of its vision and mission. It is also advantageous because the closure of operations in one country does not mean the end of the SMME as it continues operations in other parts of the world,” Baloyi added.
Rhodes Business Lecturer Owen Skae stresses that the most important reason for small businesses to establish their operations globally is to diversify their customer base. “The rand weakness is also beneficial in enabling the business to earn foreign currency, making acquiring foreign inputs and resources easier. It also opens up the business to a variety of skill sets that may not be easily accessible in the home country,” Skae told Vutivi.
Shedding light on some of the funding that has been made available to small businesses to expand, Baloyi said that the Old Mutual Group has funded over a billion to South African SMME’s through its global funding company called Bizcash. “The German Government, through its global funding company called GIZ, is currently funding SMMEs and nonprofit companies and organizations through the National Youth Development Agency (NYDA). While the Presidential Youth Employment Intervention has also set money aside to fund SMMEs,” noted Baloyi.
In addition to that, he said that the Department of Small Business Development, the Department of Economic Development, and the Small Enterprise Development Agency (SEDA) are government departments that can offer SMMEs funding to venture into global markets. A multinational e-commerce and transportation company, FedEx, which also provides shipment services for small businesses, recommends that SMMEs leverage tools such as e-commerce platforms, global marketplaces, international shipping places, and digital marketing to pierce global markets. – firstname.lastname@example.org