A study done in the Eastern Cape on factors inhibiting the growth of small businesses led by women has highlighted the need for a very specific plan to promote growth in this sector.
Herring Shava and Willie Cinyamurindi’s research was a joint project between the Departments of Business Management at the University of Fort Hare and Walter Sisulu University and was published in the African Journal of Economic and Management Studies.
Their study explored factors that inhibited the growth of small, subsistence businesses run by women entrepreneurs in the province. Forty-five women were interviewed for the project at their places of business.
The researchers highlighted a significant factor: women would rather keep what they have than take a risk on expansion. Other factors inhibiting the growth of women-led subsistence businesses included a lack of expansion strategy and problems at home.
Regarding a lack of risk appetite, women who took part in the study shared that they would rather work with a reliable customer base with the guarantee of continued support. They also shared a fear that they would ruin their business by expanding.
The study also emphasized that any growth strategy must consider that most women who have subsistence businesses started these to supplement their household income. One participant shared that she had started her business to bring in more money, as her husband was a seasonal worker on a farm, and the money she brought in helped the household when he was not working.
Many women also said that running a business was difficult, as the added responsibility triggers conflict with their partners because they are expected to take care of the family. This consideration also places a barrier to any plans to expand. They added that they were also expected to conform to the traditional role of women and caregivers.
Those in the food industry, especially, explained that complying with municipal and health and safety regulations makes expanding expensive. Participants mentioned that the monetary and personal cost of keeping up with municipal regulations and requirements was draining and that some expenses relating to business compliance are viewed as a waste of money.
The researchers concluded that to effectively assist women-led small businesses, there was a need to focus on the real-life situations women entrepreneurs face. They also concluded that many small business owners need skills, must develop an entrepreneurial mindset, and need funding to overcome some of the challenges they face.
The authors also propose future research to explore the experiences of women who have transitioned from subsistence entrepreneurship and investigate the factors contributing to their success in this sector.
Aretha Linden
www.ufh.ac.za