Challenges faced by small businesses in South Africa

Starting a business and building it into a successful company is hard, entrepreneurs face a number of challenges when starting their small businesses. Here are some of the challenges faced by small businesses in South Africa.

Attracting customers

A lot of people are able to start their businesses, especially people who are employed trying to start a side hustle. The most difficult challenge when running any business is attracting customers. Which goes hand in hand with marketing, building a solid customer base is hard.

This ultimately leads to the downfall of many businesses, because if you can’t attract customers then you will run at a loss. Especially when you have operating expenses. A survey conducted by Mail Chimp found that over 60% of businesses struggle with marketing.

Marketing needs money, the frustrating part about it is that you spend most of your money in trying to find a working and profitable formular. You may spend R10 000 on a marketing campaign and only make R3 000, this would be a failed campaign and you would have to try again until you get a working formula.

Securing funding

Securing funding is perhaps the hardest obstacle when it comes to running any business. It’s very difficult to convince investors to fund your venture, most South African entrepreneurs blame the lack of funding as the ultimate cause of failure for their small businesses.

People who are fearful of venturing into entrepreneurship fear that without funding, they won’t find any success. Contrary to this opinion, it is quite possible to start a business without capital and grow it into a success.

Things would go a lot easier for most of us if we could get a small loan of $1 million from our parents. This is what ultimately leads businesses to fall, it’s difficult to make it without funding and if you can’t secure any funding then your chances of succeeding are slim. Funding doesn’t necessarily mean getting money from investors or venture capitalists. You can raise money from your family/friends or even use the money that you have from your main job or side hustle.

But going from exactly R0 to building any business without receiving so much as a small loan of R1 000 from your parents is very difficult but it is doable nonetheless.

Limited knowledge

I have found that most people have little knowledge about the sector or industry they’re operating in. This makes them make very unrealistic projections and they end up facing a lot of surprises as time goes. Sometimes they can’t take advantage of easily accessible opportunities because of lack of knowledge.

It’s your job as an entrepreneur to make all the necessary research about the field you’re operating in. This makes it easy to make realistic projections and take advantage of opportunities. Most people expect their business to be successful within 3 – 6 months while in reality it takes around 3 years to be profitable.


These are some of the challenges faced by small businesses in South Africa. Do you have any thoughts or questions? Comment below.

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