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SA SMEs to stay competitive with AI

80% of South African small and medium enterprise (SME) owners surveyed in the first quarter 2018 Business Partners Limited SME Index believe that they will need to invest in automation or other advanced technologies such as artificial intelligence (AI), 3D printing and robotics over the next three to five years in order to remain competitive. This is despite 67% of respondents saying that the evolution of such technology has not yet contributed to the growth of their businesses.

Commenting on these results, Jeremy Lang, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), says it is undeniable that the Fourth Industrial Revolution has already started to take the world by storm. “Technologies such as AI are becoming more of a common feature in society and in the business realm. As such, it is imperative for local SMEs to strategise as to how they can start to incorporate these technologies in their businesses moving forward and benefit from them.”

Lang says despite the talk around how AI may jeopardise jobs, not only in South Africa, but globally, it is important to note that during the development of the previous three Industrial Revolutions many jobs became redundant, but evolved into new positions. This is supported by a recent report by Gartner which states that by 2020, AI will generate 2.3 million jobs, exceeding the 1.8 million that it will wipe out.”

As AI becomes more intrinsic in business processes, Lang points to examples of how AI can take a small business to the next level by streamlining business processes and cutting operational costs:

Customer Service:  AI can assist with making customer service more efficient by automating answers and responding quickly. This can free up customer service employees to deal with issues that require human engagement. By using AI in their customer service process, small businesses can minimise the average response time and automate repetitive questions to ultimately improve both employee and customer satisfaction.

Human Resources: When it comes to hiring processes, AI can be used to assist the HR department in its hiring decisions. Not only can AI products be used to scan resumes and applications for keywords, they can also analyse applicant responses and scan profile information to determine the level of experience as well as whether the applicant will fit into the business’s culture.

Protection: It has been said that SMEs are at a greater risk of cyber-attacks than their larger counterparts. However, AI tools can be used to protect data from hackers by using machine learning to detect threats and unusual behaviour.

Entering new markets: In order to determine the market-fit for a small business, AI tools can use machine learning to decipher the consumer segmentation and market analytics.


In order to take advantage of the various benefits that the Fourth Industrial Evolution brings, small business owners need to do some research to identify technologies and software available in their markets.

“Small business owners should ensure that they start incorporating the use of new technologies to stay competitive in an ever-evolving landscape by streamlining their processes, they should also invest in up-skilling their employees to be competitive in the future,” says Lang.


Many startup and small and medium-sized enterprise (SME) owners in South Africa believe that sustainability strategies are only relevant to large corporate, but there are many advantages to making sustainability the foundation of any new business.

This is according to Jeremy Lang, Regional General Manager at Business Partners Limited (BUSINESS/PARTNERS), who says that it is often difficult to sell local SME owners on the idea of sustainability, largely because of the perceived costs and time involved.

“However, the benefits of implementing a sustainability strategy early on in the life cycle of a business far outweigh any cost implications. Small businesses built on sound sustainability principles could even see themselves gaining a competitive advantage in their respective sectors,” says Lang.

He points to a recent study by McKinsey1that revealed a strong correlation between resource efficiency and financial performance among businesses surveyed. “The companies with the most advanced sustainability strategies did best of all in this particular study.”

Lang explains that in business, sustainability consists of three distinct aspects: “A good sustainability strategy incorporates economic, environmental and social performance goals. Each of these also have a direct benefit for the SME if managed correctly.”

Starting with economic performance, Lang says that this is the area where a business can see the quickest results. “McKinsey’s study measured the amount of energy, water, as well as waste that companies used, in relation to their revenue, and concluded with 99% confidence that it had a direct correlation with profits.”

He notes that in South Africa, the above-inflation rate increase in electricity tariffs in recent years, coupled with increased uncertainty over the availability of water has placed significant strain on SMEs to date. “The good news is that the cost of installing renewable energy generation technology (which can cost upwards of R100 000) can be offset by the tax benefits involved. The Income Tax Act allows businesses to enjoy accelerated capital allowances, in respect of renewable energy spend, as a tax deduction. The quantum of the deduction will vary depending on the nature and purpose of the spend. These tax incentives are aimed at driving down operating costs and enjoying a return on the capital investment over a shorter term.”

Lang says that growing a corporate culture of water saving and investing in water efficient technology on the production side, will, in turn, help a business to manage its risks during times of water shortages. “Drought and water shortages are very real in a country like South Africa. This form of resource risk management is an integral part of ensuring that your business can survive when there is a crisis. Lastly, reducing waste through more efficient processes and by recycling can help to drive down costs even further.”

The environmental aspect of sustainability is also vital for SMEs to keep in mind. “Large businesses are coming under increased pressure from regulators to minimise their impact on the environment, and it is common to see big companies spending huge amounts of money on environmental rehabilitation and pollution reduction schemes as part of their legal requirements. However, SME owners need to be aware that environmental obligations will start to impact them more and more. The carbon tax, which will be implemented in 2019, is just one example.”

Rising fuel costs will be the most obvious effect of the new tax, he says, which is why SMEs will need to find ways of making their logistics more efficient. “Optimising delivery routes, investing in fuel efficient vehicles and partnering with specialised supply chain service providers will become increasingly important.”

Finally, Lang says that making room for social considerations in a sustainability strategy can help an SME unlock new opportunities. “McKinsey’s study notes that although building strategies around social issues is often seen as a luxury that smaller businesses can put off until later, investors, both large and small, are increasingly comfortable with the idea of putting their money into socially responsible investment. The study also shows that making an effort to uplift and invest in the community will potentially reward the business with new opportunities to grow and improve its bottom line”

He says that making socially responsible investment also creates opportunities for local SMEs to engage with like-minded international companies. “The US and Europe have seen a 22% increase in socially responsible investment, according to McKinsey. That is why multinational businesses based in the US and Europe are becoming increasingly enthusiastic about partnering with local businesses who can prove that they have socially responsible practices already in place.”

As the pressures caused by climate change, rising resource costs, political issues and social responsibility continue to mount, SMEs that embrace sustainable practices early on in their operation may find better ways to close the gap between them and larger competitors. “Building a business on the principles of best practice from day one, is imperative for local SMEs that aim to become industry leaders,” Lang concludes.



About Business Partners Limited (BUSINESS/PARTNERS):

Business Partners Limited (BUSINESS/PARTNERS) is a specialist risk finance company for formal small and medium enterprises (SMEs) in South Africa, and selected African countries. The company actively supports entrepreneurial growth by providing financing, specialist sectoral knowledge and added-value services for viable small and medium businesses. Visit for more information.



SA’s PREMIER entrepreneurial competition MARKS 30 YEARS OF CELEBRATING entrepreneurial excellence

 Johannesburg, 06 March 2018: Amid the current political optimism, entrepreneurs should be especially inspired by the continued commitment to SME support which emerged as a consistent theme in both the 2018 State of the Nation Address and the National Budget Speech. This is according to Christo Botes, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who believes that this continued focus evidences Government’s recognition of the vital role played by entrepreneurs in enabling economic growth.

Speaking in light of the launch of the 2018 competition in Johannesburg today, Botes says that this long-deserved recognition of the SME sector only further validates the competition’s unwavering commitment to celebrating excellence in entrepreneurship and fostering future economic growth.

“Now in our 30th year, this renowned competition continues to pay homage to the fearless South African entrepreneurs who dedicate themselves to their enterprises and businesses: driving growth, combatting unemployment and contributing towards the country’s economic development. It is therefore wonderful to see the public sector taking the required steps to improving the environment in which these entrepreneurs operate in order to promote further growth in the sector.”

Botes, who is also executive director at Business Partners Limited (BUSINESS/PARTNERS) has been involved in the competition since its inception in 1988, “Looking back over the last 30 years, this competition has evolved from an internal competition that recognized BUSINESS/PARTNERS’ clients only, to a nation-wide search for outstanding South African-based entrepreneurs, with Sanlam as our valued partner.”

He says that the competition continues to reward successful local business owners for the valuable contributions they make to grow their local communities and economies, and aims to inspire others to do the same. “As our 30th- anniversary year, we’re hoping to see even more entrepreneurs enter. The competition is open to all South African-based businesses and prizes are awarded for the following categories: Overall Entrepreneur of the Year®, Emerging Business Entrepreneur of the Year®, Small Business Entrepreneur of the Year®, Medium Business Entrepreneur of the Year®, Job Creator of the Year and Innovator of the Year,” says Botes.

Botes adds that this year, the 2018 competition will also recognize a South African entrepreneur for a Lifetime Achievement award. “The purpose of this specially nominated award is to recognize an entrepreneur who has made a significant contribution to the South Africa economy and has grown their business from start-up to large-scale, perhaps even multi-national corporation. We want to reward the individuals who have dedicated their lives to building our economy and inspiring others to do the same.”

The 2018 Entrepreneur of the Year® competition, sponsored by Sanlam and BUSINESS/PARTNERS, offers prizes valued at over R 2 million, which includes cash prizes of R 70 000 for each main category winner, and R200 000 for the overall winner. Competition winners will also receive valuable mentorship support, networking opportunities and national media exposure.

Botes says that in celebrating 30 years of searching for entrepreneurial talent in all sectors of the economy, the competition remains fiercely committed to its cause in 2018. “The judges are looking for entrepreneurs that have succeeded against the odds, either by carving out a niche market for their product or service offering, or by succeeding in a very competitive environment. Perseverance and endurance, innovation and agility are some of the qualities we look for in the entrepreneur.”

Botes adds that there are also a number of quantitative competition measures, such as turnover growth, profitability, owners’ equity growth, positive cash flows and job creation that play a part in the competition’s judging process.

Entrepreneurs are encouraged to enter the competition and can do so by downloading the entry form online at They can also interact with fellow entrepreneurs, past winners and entrants on the competition’s social media platforms and The closing date for the competition is 31 May 2018.

About Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS:

The Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS aims to honour, benefit and uplift South African SMEs. Now in its 30th year, the competition celebrates excellence in entrepreneurship, serving as an inspiration to others to succeed in the world of business. Visit for more information.


03 April 2018: The current perception around entrepreneurship in South Africa needs to change, with more regarding it as a viable career choice instead of a back-up plan for unemployment.

This is according to Mark Paper, Chief Operations Officer at Business Partners International (BUSINESS/PARTNERS), following the recent publication of the 2017/2018 Global Entrepreneurship Monitor’s (GEM) Report1, which ranked South Africa’s entrepreneurial spirit at 42 out of 54 countries. While the report showed some positive signs for South Africa, including that the country’s entrepreneurial activity is at its highest level in recent years, Paper states that South Africa’s low ranking is an indication that more still needs to be done to lay the groundwork for entrepreneurship and small business development in the country.


The positive news is that total early-stage entrepreneurial activity in South Africa is at 11%, which is an improvement of over 4 percentage points compared to the 6.9% recorded in 2016. These numbers are however still relatively low, and even with entrepreneurial activity showing such a substantial increase, it is still ranked only 27th of the 54 countries surveyed.

“We believe that some of this improvement is due to the slight uptick in economic outlook in South Africa during 2017.  There has also been a realisation on the need to promote small businesses in the country, as well tax relief for small businesses which has probably had a positive impact on the sector. A lot of work has also been done to improve access to business funding and to create an easier regulatory environment.”

However, Paper states that there are still some significant barriers that could continue to keep South Africa’s GEM ranking at its current disappointing position. “This research highlights that the quality of entrepreneurship in South Africa is weaker than in other African countries. Looking at the calibre of South African SMEs’ housekeeping, governance, innovation and ability to function in a regulatory environment, I would however, disagree with this notion,” he says.

“We need to change the way we view entrepreneurship as a country, getting over the mind-set that entrepreneurship is a back-up plan but rather an inspiring and viable career choice. Entrepreneurship should be celebrated and rewarded, and these exceptional individuals should be rewarded for their contributions to the economy. This is probably one of the most effective methods of getting more South Africans interested in entrepreneurship as a career.”

In addition to this, Paper states that Government also has a role to play, and by working to further improve the regulatory environment for businesses, a significant impact can be made. “There has been some movement in this regard, the regulatory environment is still a major challenge for many South African SMEs. For example, there are some 39 steps – from registering a company to registering for VAT – that SMEs need to go through in order to become real businesses. If we look at some of the countries that feature higher up on the GEM list, we note that one of the reasons for improvement is that many of them are moving toward simplifying regulations and reducing red tape. Fortunately, it seems that with the recent changes in South Africa’s leadership there is also an increased drive to address these challenges.”

Lastly, Paper says that while all stakeholders need to continue to work together to lower the barriers to entry for SMEs in the country, the report provides hope for the industry over the coming years. “If the trend of entrepreneurial activity improving in South Africa continues, there is a good chance that other indicators can increase significantly in the near future,” Paper concludes.

 Sources: 1

About Business Partners Limited (BUSINESS/PARTNERS):

Business Partners Limited (BUSINESS/PARTNERS) is a specialist risk finance company for formal small and medium enterprises (SMEs) in South Africa, and selected African countries. The company actively supports entrepreneurial growth by providing financing, specialist sectoral knowledge and added-value services for viable small and medium businesses. Visit for more information.













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