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Economic obstacles fail to deter unstoppable entrepreneurs

Vital for economic growth but facing serious challenges, South African small and micro businesses are displaying unwavering entrepreneurial spirit, according to new research commissioned by Regus, the world's largest provider of flexible workplaces. Even though some might have fallen into business ownership through redundancy, a staggering 88 per cent of South African entrepreneurs reported that given the chance they would do it all over again, more than the global average of 85%.

This latest Regus research, canvassing over 26,000 business managers and owners in 90 countries, confirms that nimble and flexible South African entrepreneurs regard lack of red tape (82%) as the biggest deterrent to setting up a business today. Difficulties accessing credit (81%) and lack of government support (73%) followed. Over half of South African entrepreneurs also cited the state of the economy and market domination by large corporations as serious hindrances.

Commenting on the findings, Regus Area Director, Kirsten Morgendaal says: “Thank goodness for the Unstoppable Entrepreneur! Who knows what state the economy would be in if they decided to play safe and downsize like a lot of their larger and arguably better resourced competitors. The challenges they face are not new, but they are clearly saying that little impact has been felt from state support initiatives, despite the best efforts of government.

Betty Mafura-Shoko, Managing Director at Prime Time Solutions, an international recruitment agency says “I agree, official mechanisms have not done anything much for my business. But if you want to be a successful entrepreneur, you soon find that nothing comes easily. It’s a white knuckle ride and you have to have nerves of steel. That’s why it’s usually the entrepreneurial community that generates growth out of an economic downturn, while the big boys run for cover. I just don’t understand why government doesn’t recognise this and change its focus to more evenly pay attention to SMEs. We generate around half the nation’s wealth, but we get a tiny fraction of state attention! Nevertheless, running my own business was the best decision I ever made and I’d do it over again any day.”

SMEs are “engines of growth” accounting for up to 99 per cent of businesses and 40 to 50 per cent of GDP.[1] In South Africa in particular, they account for 99 per cent of firms.[2] Globally, 50 per cent of all jobs are generated by SMEs,[3] yet, in spite of this, they attract just a tiny proportion of overall investment across the G20.[4]

Kirsten adds: “Entrepreneurial firms will need to remain nimble to navigate choppy waters and succeed. The lack of institutional support means that business owners will continue to increasingly favour flexible working in order to avoid lengthy leases and free up their working capital so they can concentrate on growing their business.”

“Already globally, more than half of entrepreneurs are using flexible working locations for most of the week, compared with 39 per cent for those that do not own their businesses.”

Top challenges for entrepreneurs


South Africa

Lack of access to credit



Red tape



Lack of government support



Current economic conditions



Market domination by large corporations



The full Regus report can be accessed at

[1] Brown S, Harris K, Toward an Understanding of Consumer Perspectives on Experiences, Journal of Services Marketing, 24, 2012

[2] ABSA, Business Owners in SA, 14th September 2012

[3] Source: Ernst & Young

[4] Source: Ernst & Young