In the spotlight: SMEs

12 June 2015

Electricity challenges especially taxing for small businesses

When one considers the 76% failure rate of small businesses in South Africa, it is clear that SMEs can ill afford the added financial burden of energy price increases and load shedding.

In addition, the ‘greening’ of the global economy, along with the associated need for energy efficiency, is one of the most significant changes altering today’s business landscape. It is also a trend which most SME enterprises are failing to adapt to in significant ways. Against this backdrop, the Private Sector Energy Efficiency (PSEE) programme collaborated with Emergent Africa and Barloworld Siyakhula in presenting the Winning Edge workshops in Johannesburg and Durban. The workshops took a holistic approach to the challenges facing SMEs, including energy costs and constraints.

According to Thomas Mambande of Emergent Africa, as a general rule, small businesses – particularly emerging black ones – lack the skills to conceptualise, craft and articulate compelling value propositions within the marketplace. As a result only a fortunate few are thriving while the vast majority fail to secure a foothold on the ladder of progress and profit, despite the opportunities created by BEE legislation.

In addition, failure to adapt to the requirements of a rapidly changing business environment, globalisation and technologies compromises the ability of many small businesses to succeed.  

According to Mr Mabande, many small businesses also do not appreciate energy efficiency as a tool for reducing costs. Nor do they understand how the ‘greening’ of their enterprises, in the long-term, renders them more sustainable and equipped for the business world of the future. “This is an important gap in the knowledge empowerment of black business, and must be addressed as part of the reach towards the Millennium Development Goals to which we have committed”.

The PSEE’s presentation at the Winning Edge workshops focused on assisting small businesses in dealing with energy challenges by means of energy efficiency as starting point on the journey towards greening their operations. 
To date, the PSEE has assisted around 1 500 small businesses in reducing their energy costs through these and other targeted training workshops and other services. The results include the identification of opportunities for no-cost or low-cost measures that could typically lead to a 20% saving in energy costs. No-cost behaviour-change measures could include such simple measures as ensuring that your company is on the right electricity tariff structure and switching off lights and office machines when not in use. Low-cost energy-efficient measures include replacing traditional light bulbs with energy-efficient alternatives, as well as seeing to maintenance issues that could be responsible for wasteful energy usage.

The PSEE would like to thank Mr Thomas Mambande of Emergent Africa for his inputs into this article.