Here’s how point of sale services have helped South African business owners achieve success
SMEs are the essence of any economy, both developing and developed, they’re a vital factor in creating jobs and a demand for products and services. However, recent findings by the SME Growth Index paint a disquieting picture of the state of SME growth in SA. Income and employment growth have been quiet, with the sector only growing by 13% last year. This shows the challenges SMEs in South Africa are facing. This is why merchant services will become even more important for starting and running an SME to become simpler and more accessible.
The odds against running a fruitful small business are all stacked the wrong way
The internet and globalisation have created a more open and connected world, creating chances for innovators and entrepreneurs. But it’s a double-edged sword, competition is aggressive. Not only are SMEs challenging with the business down the road, they’re competing with companies in neighbouring provinces, countries and continents, especially if they operate in the digital arena. The mounting price of goods also puts another strain on small businesses, in addition to the struggle to find startup financing and decent merchant services. The local economy, as well as lack of mentorship, is another factor that might dissuade SMEs from launching, and put pressure on established companies. The fact that 8 out of 10 small companies fail in the first two years shows exactly how tough it is to go at it alone.
SMEs can prosper from an idea literally under your nose
Despite all the odds against SMEs succeeding, there are many instances of small enterprises going strong, from that small corner-side coffee shop that overflows during lunch time to that hairdresser you can’t do without. Then there’s Bona Fide Beards. As you’ve undoubtedly noticed, beards and moustaches, and combinations thereof, are kind of a thing at the moment. But what wasn’t a thing, until Johannesburg businessperson Monique Fleming stepped in, was a decent range of male grooming products to keep those beards in shape. What started out as her making a batch of beard taming conditioner for her husband’s wily mane, has turned into a thriving brand. What is now an online store will become a retail outlet early next year, complete with a production space, office and even an on-site barber.
Business at the South African Sky Diving School is booming thanks to mobile payments.
Merchant services are another way for SMEs outside lifestyle brands to find success. For two decades, Mike Teague has been running tandem skydives and accelerated freefall courses at the South African Sky Diving school from Wonderboom airport in Pretoria. During that time, all bookings had to be made prior to the jump date, with a 20% deposit paid upon booking. The account would be settled on the day of the jump, by cash or EFT. Mike suffered several scams where the customer never transferred the funds electronically, until he invested in a mobile point-of-sale (mPOS) device.
Now things are very different for his business. The fact he can offer patrons a convenient way to pay by card directly has meant that bookings have increased and the school is almost always fully-booked. He can now accept walk-ins without having to ask for a deposit, he avoids the stress and loss of non-payments and has even expanded his business by opening an informal bar at the school, something very much enjoyed by his clients.