People 'n' Issues

SMEs must be higher on local election agenda

August 2nd, 2016
A lot has been said about how national government can help SMEs and how local government plays a role in shaping business, which is why entrepreneurs should listen to the promises made by parties in the upcoming elections, writes ANTON VAN HEERDEN of Sage.
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Much is said about how national government can and should help create an enabling environment for small and medium enterprises (SMEs) to flourish, but local government also plays a vital role in shaping their business environment. As such, entrepreneurs should be listening carefully to the promises and policies outlined by the candidates and parties standing for South Africa’s upcoming municipal elections.

The day-to-day impact local government has on the average small business’s day-to-day operations should not be underestimated. Where national government sets macro-economic policy and national laws for industry and commerce, local government is the coalface of service delivery to citizens and businesses alike.

Local government affects small businesses in many ways. For example, companies planning to set up an office or factory will often need to consult with the municipality about zoning regulations and building bylaws. Meanwhile, if you operate in an industry such as food or entertainment, you may need to get a trading licence from the municipality and show your compliance with health, safety and noise control bylaws.

Building the ratepayer base and creating employment

Local government also provides a range of mission-critical services to small businesses, from refuse collection to electricity distribution. If a municipality fails to maintain its local power infrastructure, its SMEs may suffer financial and productivity losses that harm their sustainability. Conversely, a municipality that invests in broadband infrastructure and maintains its local roads efficiently creates an enabling environment where entrepreneurship can thrive.

However, we haven’t heard much from most political parties about what they will do to make the towns and cities they govern into better places to do business. We consider this to be an oversight since municipalities that do a good job of attracting and supporting small enterprises can boost their ratepayer base and help to create employment for their residents.

SME owners should ask their local candidates and councillors questions about what they will do to streamline red-tape for businesses in their constituencies. For example, do they have any plans to make it faster and easier to apply for a trading licence or a building permission? In many cases, small business owners need to go and stand in a queue to file a simple form. Visionary municipalities should make it easy to apply, pay and file paperwork online.

Entrepreneurs should also scrutinise the plans municipal candidates set out to ensure the steady and reliable provision of services such as power. Also high on their priority list is consistent, reliable billing for municipal services as well as transparent and fair ways to initiate billing disputes.

Make a seat at the table for the entrepreneur

I urge councillors and mayors who will be taking new positions in local government after the elections to make a seat at the table for small business. We think that mayors, councillors and city managers can help their cities to thrive and prosper by supporting SMEs.

In addition to revisiting red tape – in line with the 2013 Guidelines for reducing municipal red tape from the departments of Trade and Industry (DTI) and Cooperative Governance and Traditional Affairs – there is much municipalities can do to nurture small businesses.

One example is ensuring that they buy local as much as possible when procuring goods and services, and paying small business suppliers and service providers promptly. Another is by working with large businesses to create training and mentoring schemes for small local businesses. In a world where only the voices of the biggest are heard, we must always fight to hear the voice of the entrepreneur. It is only through growing a vibrant small business community that our towns and cities can prosper.

* Anton Van Heerden, EVP and Managing Director, Sage South and Southern Africa

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