Business within the Buffalo City Metropolitan Municipality (BCMM) is taking a beating but we shouldn’t give up hope just yet, says Border Kei Chamber of Business executive director Les Holbrook.
“Right now, business confidence is battered,” Holbrook said.
“Existing registered business is finding it much easier to convert to informal business which means no employees, no labour relations, no legislation, no tax, no accountability.”
According to Holbrook, “There are too many challenges in business today and seemingly no avenues to resolve most of those issues.”
A major concern at the moment is SA’s tumultuous political landscape which has created a lot of uncertainty and made investors unwilling to risk their capital in such a volatile environment.
“Macro complications do nothing to encourage start-ups and established business. This includes the land tenure debate and property rates escalation.
“BCM is rapidly becoming one of the most expensive destinations and added to this are problems such as limited schooling and housing which means to keep business committed becomes harder and harder,” Holbrook said.
Start-ups face a lot of challenges in BCM, said Holbrook. In addition to the sort of problems that plague all entrepreneurial ventures – securing capital, attracting customers, etc – they also have to deal with the cost of doing business in BCM climbing “well beyond inflation every year.”
These escalating costs make it increasingly difficult for new businesses to enter the market and negatively impacts those that are already established, hampering the local economy.
One thing that could help, said Holbrook, was the establishment of some sort of safety net for new businesses which help reduce their financial risk.
“More support mechanisms are needed and at least a risk-venture capital fund must be established where write-offs and bad debt are not a criminal offence,” Holbrook said.
Despite all these problems, there are ways that businesses and the public can band together to encourage the municipality to adopt more business-friendly attitudes.
“It is unthinkable that any enterprise tries to ‘go it alone’. There is no truer statement that promotes business tenure than the slogan ‘Unity is Strength’,” he said.