South Africa: Women Top Success Rates in SME Survey

Excerpt cross-posted from an article by Biz-Community on All-Africa.com.

The SME Survey 2014, an annual study of factors behind the success of small and medium enterprises (SMEs) in South Africa, has found that a small business owned by a woman has a better chance of being profitable than one run by a man.

Equally surprising is that those companies owned by couples or a mix of genders are substantially less likely to be profitable than those operated by either male or female-owners.

"While this result may seem like a big win for women, it comes with an immediate qualifier: the level of female ownership is exceptionally low," says Arthur Goldstuck, SME Survey principal researcher and MD of World Wide Worx.

To provide perspective on profitability and gender differences, the overall picture of South African small business shows that they are doing reasonably well, although only a small proportion - less than one in five - is thriving: 17% of SMEs surveyed are 'strongly profitable' while 45% are 'just profitable'. However, this does leave a significant percentage under some distress: 38% are not making a profit.

Genders results

Against the overall result, it emerges that of the male-owned SMEs:

• 20% are strongly profitable
• 49% are just profitable

While of the jointly owned SMEs:

• 16% are strongly profitable
• 37% are just profitable

And of the female-owned SMEs

• 15% are strongly profitable
• 63% just profitable

This equates to 78% of women-owned businesses being profitable, well ahead of the 70% for men.

However, the most considerable difference is recorded in jointly owned organizations, where just 53% are profitable. "This shows that there are additional challenges which come with owning a business together with your spouse or partner, or where joint owners have different personal agendas or management styles," Goldstuck says.