Size matters in small business, so focus on funding the job creators
Start-ups employ few people, but at present financing is aimed at them rather than at more mature job-creating SMEs
The unemployment rate in SA is at its highest in decades. In fact, at 29.1% it is among the highest in the world. At the same time, the country is producing more start-up businesses, with estimates ranging between 250,000 and 500,000 small businesses in the country right now. So why aren’t small businesses creating more jobs?
The answer is simple. Contrary to popular belief, start-up companies don’t create jobs. Start-ups may have the capacity to hire one or two people, but they are rarely able to employ more, as the business is generally still in survival mode. That’s why the unemployment rate to start-up company ratio makes no sense to many commentators...
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