If buying a home is considered the most stressful purchase an adult can make, securing a business address is the equivalent for Small to Medium Enterprises (SMEs) and start-ups. A 2019 workplace survey commissioned in 80 countries by flexible workspace giant, IWG plc, showed that flexible workspace could be the answer to many of the hurdles the estimated 2.8 million SMEs in South Africa face.
Barriers to entry into the market for SMEs in South Africa, range from lack of funding, high start-up costs like assets; stock and fixed-term leases, access to clients and a lack of mentors. The South African government, to overcome these hurdles, has placed a focus on “working with small and large businesses to build value-chain linkages that support export-oriented competitive enterprises.”
This past week, President Ramaphosa reiterated this commitment as he launched the SA SME Fund in conjunction with the CEO Initiative – “a collaboration between government, labour and business to address some of the most pressing challenges to the country’s economic growth – as an avenue of support for the SME sector.”
And the global workspace survey conducted by leading flexible workspace provider, IWG, shows that flexible working may solve a big part of the puzzle of raising up sustainable SMEs.
The research shows that 77% of businesses surveyed in South Africa, said that flexible working plays a big role in the success of SMEs. 51% said that flexible working helped SMEs attract and retain talent, whereas 62% reported being more productive. 45% used flexible workspace to reduce their capital expenditure and operational expenditure.
The move to flexible working in the rest of the world is even more marked. Of the 15,000 respondents from 80 different countries around the world, 75% (and a massive 79% in South Africa), believe that flexible working has become the new normal. As a result, in the past ten years, 85% of businesses have introduced a flexible workspace policy, or are planning to adopt one (89% in South Africa) in an effort to retain talent.
SMEs in South Africa also singled out the daily commute as a reason to use flexible workspace, with 47% using a nearby co-working space to reduce commute times and costs. Let’s be frank: The Ina Paarman’s who build successful empires from their garage are out there, but for every other SME started in a township or smaller town, garages and coffee shops are just not an option if they are going to grow.
Joanne Bushell, Managing Director South Africa and VP Sales Africa for IWG says, “Businesses around the world are facing multiple challenges including ensuring that their business is agile enough to adapt to change. SMEs in South Africa are no different. Our research shows that businesses that haven’t already considered the financial and strategic benefits of flexible workspace need to do so now. Otherwise, they face being seen as out of touch, both with their competitors and with the demands of the modern workforce.”
IWG plc (represented by Spaces and Regus in South Africa) recently launched the “Thuma Mina” series of talks in Gauteng at 5 of their locations. These events, open to the public and aimed at SMEs and start-ups, are presented by York Zucchi, co-founder of the SME Movement on the topic: “How to find clients and grow your business.”
Zucchi is passionate about his message that SMEs should make the most of every opportunity to secure new clients without waiting around for “venture capital.” He promotes using networks around you like the ones in co-working spaces and the opportunities to “meet people who solve problems”. Also, to secure new clients and to do business with other SMEs rather than rely on corporates who come with their own set of paperwork, payment terms and other hurdles.
Joanne says, “Flexible workspace is truly a way for SMEs to reduce costs, remain agile in changing environments, make profitable connections and attract and retain talent in a professional environment that supports business growth. The Thuma Mina events step in to solve one of the hurdles faced by SMEs i.e. mentorship, which is just one of the ways South African SMEs can benefit from flexible working.”