Small, micro and medium enterprises (SMEs) are perceived to be the solution for
economic growth and unemployment in South Africa. However, the failure rate of
SMEs within the first three years is between 70 and 80 percent, which in most
cases is attributed to lack of support from government, financial institutions and
multi-national enterprises. This failure is usually assessed from the SMEs
perspective, where SMEs are seen to be receiving assistance or favours. The
study aimed to investigate the contribution the SMEs make towards their own
failure and how they view themselves. SMEs believed that they are properly
equipped to provide services to the mining industry, whereas mining companies
have the opposite opinion.
This was done by conducting a survey and reviewing existing literature on the
challenges faced by SMEs in the current economy. A factor analysis was used to
determine important factors regarding the prosperity of the SMEs. This was a
cross-sectional study and depended on a completed survey and questionnaire
collected from the SMEs.
The focus of the study was SMEs within the mining industry, which is a major
player in the South African economy, thus measuring the effectiveness of the
SMEs survival within this context is beneficial.
The results of the study indicated that resources, service and product quality,
and the environment of the SME played a major role in the success of the SMEs.
Respondents to the survey were neutral about the resources they have in their
companies, however they strongly believed that they provided quality service
and products. Their location had an impact on their business success. The
results also highlighted that there may be racial bias in the mines when dealing
with SMEs, although this had no impact on their prosperity.