SMME Performance—Results from a Longitudinal Study (2003-2012)

Abstract

The small and medium enterprise sector is often purported to be a significant driving force within the modern economy. Over the last two decades various studies have concluded that creativity and innovation are influential factors that contributed significantly to job and wealth creation. The purpose of this study was firstly, to determine how SMMEs created jobs consistently over a ten year period. Secondly, the study aimed to determine customer, profit and sales growth as measures of business success. This study involved a longitudinal research design with a quantitative approach and a sample size of 117 participants. The pilot study started in 2003 with data obtained from 117 participants. 49% of these participants were still operational in 2012. 52% of these business owners prepared to provide data. The remainder of the 117 participants (represented by 51%) were untraceable and therefore, assumed to have failed. The performance parameters included the number of employees, customers, value of sales and profit. Our research clearly showed that when the economic situation is favourable, SMMEs create jobs and wealth, however, as soon as there is a downturn in the economy, both job and wealth creation is reduced.