In his State of the Nation Address, themed “A nation that works for all,” President Cyril Ramaphosa emphasised the government’s commitment to supporting small businesses as a key driver of economic growth and job creation. The address included the announcement of a R20 billion transformation fund to support black-owned small businesses, commitments to reduce red tape, improve access to finance, and simplify regulatory processes.
In the 2025 Budget Speech, Finance Minister Enoch Godongwana outlined further measures to bolster the economy, which have significant implications for the small business sector. These measures focus on macroeconomic stability, structural reforms to remove obstacles to growth and job creation, and scaling up infrastructure investments.
In South Africa, where economic challenges such as high unemployment, rising inflation, and limited access to funding persist, small businesses have shown remarkable tenacity. While government has signalled its commitment to helping more small businesses thrive, business owners shouldn’t rely on this alone.
Here are some key areas entrepreneurs should be thinking about to elevate their success.
Embrace innovation and adaptability
One of the most significant lessons is the need to innovate and effectively leverage technology. Recent world events have accelerated the rate at which businesses pivot and find new ways to serve their customers and improve business operations. This adaptability has been crucial for survival and growth, demonstrating that businesses must be willing to change their strategies and operations in response to external pressures and market demands.
“Innovation doesn’t only mean the adoption of new technologies; it also involves rethinking business models, exploring new markets, and finding creative solutions to problems,” says Colin Timmis, Country Manager for Xero South Africa. “Entrepreneurs who embrace innovation are better positioned to stay ahead of competition and meet the evolving needs of their customers. E-commerce platforms, digital payment solutions, and cloud-based tools have allowed businesses to expand their reach, enhance customer satisfaction, and manage their finances more efficiently.”
Build strong networks and partnerships
Successful entrepreneurs understand the value of building strong networks and partnerships. Collaboration with their accountants, other businesses, industry associations, and support organisations can provide access to resources, mentorship, and new opportunities in the often-lonely path of entrepreneurs. Networking is not just about making connections; it’s about building long-term relationships that can support and sustain a business over the long term.
“Strong networks can offer valuable insights, advice, and support, helping entrepreneurs navigate challenges and seize opportunities. As the sophistication of technology and tools evolve, so does the role that accountants play in the advisory space,” says Timmis. “Partnerships can also lead to collaborative ventures, joint marketing efforts, and shared resources, all of which can contribute to business growth.”
Greater focus on financial management
Effective financial management is critical for the sustainability and growth of any business. Good financial management involves more than just keeping track of income and expenses; it requires careful planning, budgeting, and forecasting to ensure long-term success.
“Entrepreneurs who prioritise financial management are better equipped to handle economic fluctuations, manage cash flow, and invest in growth opportunities,” notes Timmis. “By maintaining accurate financial records, regularly reviewing their financial performance and leaning on their financial advisors for expert advice, businesses can identify areas for improvement, optimise their operations, and achieve their financial goals.”
Stay resilient and persistent
The journey of entrepreneurship is challenging and often a lonely one. Despite economic difficulties, South African entrepreneurs have shown remarkable determination. According to Xero’s 2024 State of Small Business Report1, small businesses in South Africa are optimistic about their outlook for the next five years, reflecting a resilient and hopeful entrepreneurial spirit. This shift in perception reflects the growing recognition of entrepreneurship as a viable and rewarding path, even in the face of adversity.
“Resilience involves the ability to bounce back from setbacks, learn from failures, and keep moving forward,” says Timmis. “Persistent entrepreneurs stay focused on their goals, remain adaptable, and continue to push through challenges. This mindset is essential for navigating the challenges of running a business and achieving long-term success.”
Invest in skills development
South Africa faces significant challenges in skills development, with a notable skills gap that affects various sectors. High unemployment rates, particularly among the youth, and a lack of access to quality education and training opportunities contribute to this. During his 2025 State of the Nation Address, President Cyril Ramaphosa announced the Youth Entrepreneurship and Skills Development Initiative2 that will provide training, mentorship, and funding to young entrepreneurs. The importance of this initiative cannot be overstated, as it represents a significant step towards empowering the youth and creating a more prosperous future for South Africa.
Additionally, further measures were tabled in the 2025 Budget Speech to address South Africa’s skills shortage. These include increased funding for vocational training programs, incentives for businesses that invest in employee development, and partnerships with private sector companies to enhance skills training. Resources were also allocated to improve the quality of education and expand access to digital learning platforms.
Investing in skills development is crucial for the growth and sustainability of any business. This includes not only technical skills but also soft skills such as leadership, communication, and problem-solving.
“Continuous learning and development are vital for business success,” says Timmis. “Entrepreneurs who invest in their own skills and the skills of their employees are better prepared to adapt to changes, innovate, and drive their businesses forward.”
Future Outlook
Looking ahead, Timmis shares his optimism for the future: ” We expect to see continued resilience and innovation from South African small businesses in the coming years. The entrepreneurial spirit of our nation that has driven growth despite numerous challenges will be crucial to our country’s success. We anticipate that investments in technology, developing team skills, and employee wellbeing will remain key drivers of growth. Our upcoming 2025 State of Small Business Report will provide deeper insights into these trends.”
“We are proud to be part of the journey of so many inspiring entrepreneurs in South Africa. Their stories of resilience and innovation are a testament to the potential of the small business sector in South Africa that is establishing a future filled with promise and opportunity,” concludes Timmis.