01 Dec 2010
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All about Small Businesses, Entrepreneurship, Being Your Own Boss, Starting Your Own Business, Small Businesses and Salaries and more on Mywage South Africa
Absa has reported that small business failure rates are as high as 63% in the first two years of trading. However, small businesses formed a vital part of the South African economy. In 1998 small businesses employed 18% of the employable population in South Africa - in 2010 it is more than 60%.
"The biggest challenge that the country faces is creating employment through building a culture of entrepreneurship, but this is sometimes difficult," said Nico Jacobs, head of Absa Small Business.
Reasons why businesses fail included poor management, and lack of structure and infrastructure. The lack of financial know-how was the biggest reason.
But this has not stopped new entrepreneurs from entering the market.
"Currently the new entrants mainly range from people who are unemployed, retrenched or retirees who realise they can't survive on their pension," said Jacobs.
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