Strategic Framework for Enhancing SMME Sustainability: Insights from the Northern Cape Province, South Africa ()
1. Introduction
Small, Medium, and Micro Enterprises (SMMEs) are vital to South Africa’s economic development, contributing significantly to GDP, employment creation, and social upliftment. In South Africa, SMMEs account for approximately 30% of the country’s GDP and employ nearly half of the workforce, making them critical for addressing socio-economic disparities, particularly in underserved regions like the Northern Cape (DEDAT, 2016; SME South Africa, 2024). The National Development Plan (NDP) envisions that SMMEs will drive 90% of new jobs by 2030, underscoring the sector’s potential to foster inclusive growth (Okechukwu, 2023). However, despite their importance, SMMEs in the Northern Cape face persistent challenges that impede their growth and sustainability. Geographic isolation, limited infrastructure, and restricted access to financial resources exacerbate the difficulties for SMMEs in this region, leaving many struggling to compete in broader markets (Chimucheka & Mandipaka, 2015; Weilbach, 2023).
Furthermore, load shedding and rising operational costs have compounded these challenges, with recent surveys indicating that nearly 68% of South African businesses failed to meet their financial goals in 2023 (IOL, 2024). In rural provinces like the Northern Cape, these issues are magnified by low population density and a lack of robust market linkages, further limiting the ability of SMMEs to scale their operations effectively (Weilbach, 2023). While existing government policies, such as the National Integrated Small Enterprise Development Strategic Framework (NISED), aim to address these barriers, their impact remains uneven due to the generalized nature of support mechanisms, which fail to account for regional-specific needs (SEDA, 2024; DSBD, 2020).
A review of current literature highlights a significant gap in addressing the unique challenges of SMMEs in under-resourced regions. Many studies emphasize the need for tailored strategies, but few offer actionable frameworks that integrate theoretical grounding with practical relevance (Leboea, 2017; Munyanyi & Pooe, 2019). Additionally, the dynamic and unpredictable economic environment necessitates a more adaptive and resilient approach to support these enterprises, particularly in rural contexts (Fanelli, 2021). Without targeted interventions, the Northern Cape’s SMMEs risk continued marginalization from mainstream economic activities, undermining their potential as catalysts for regional growth and development.
This study focuses on the Northern Cape Province due to its unique socio-economic characteristics, which include a sparse population, high reliance on SMMEs in agriculture and mining, and limited access to infrastructure and support services. These factors present a distinctive context to explore the challenges and opportunities faced by SMMEs, particularly in under-resourced and rural regions. The selection of this region aims to address a critical gap in the literature, as much of the existing research on SMME development tends to focus on more industrialized and urbanized settings. By investigating the Northern Cape, this study provides insights that could serve as a basis for understanding similar challenges in comparable contexts globally.
This research, therefore, seeks to fill this gap by developing a strategic framework tailored to the Northern Cape’s unique context. The sampling methods employed in this study include convenience and snowball sampling for the quantitative component and purposive sampling for the qualitative component. While these methods raise potential concerns about representativeness and selection bias, they were deemed appropriate due to the exploratory nature of the research and the challenges of accessing hard-to-reach participants in the Northern Cape. Efforts were made to mitigate these biases by diversifying the participant pool and cross-validating findings with multiple sources of data. The study is guided by the following research question: What are the key strategies required to enhance the sustainability and resilience of SMMEs in the Northern Cape Province, considering their unique challenges and opportunities? The primary objective is to provide actionable insights for stakeholders, including policymakers and support agencies, that foster the long-term sustainability and growth of SMMEs in the province. Additionally, the study acknowledges potential limitations in the sampling methods and outlines strategies to address these challenges, ensuring that findings remain robust and applicable.
The proposed framework is grounded in the Resource-Based View (RBV) and Dynamic Capabilities Theory, which emphasize leveraging internal resources and adaptability to achieve sustainable competitive advantages (Barney, 1991; Teece et al., 1997). These theoretical perspectives also guided the choice of sampling methods, ensuring alignment between the study’s methodological approach and its conceptual framework. By integrating these theoretical perspectives, the study contributes to both academic literature and practical applications. It offers a roadmap for aligning policy interventions with the specific needs of SMMEs in the Northern Cape, addressing barriers such as inadequate funding, poor infrastructure, and limited market access (Kulkarni, 2020; Tiwasing, 2021). Moreover, recent advancements in digital transformation and green financing provide additional opportunities to build resilience among SMMEs (Innovator Trust, 2024; Veers Group, 2024).
This paper begins with a review of relevant literature, including a discussion of theoretical frameworks. This is followed by a detailed explanation of the research methods and design, leading to the presentation of results, discussion, and conclusion. The findings aim to inform policymakers, support agencies, and SMME stakeholders on strategies for fostering resilience and growth in one of South Africa’s most challenging economic contexts.
2. Literature Review
2.1. Theoretical Framework
This study is grounded in the Resource-Based View (RBV) and Dynamic Capabilities Theory. The RBV posits that organizations derive a competitive advantage from unique resources and capabilities that are valuable, rare, inimitable, and non-substitutable (Barney, 1991). In the context of SMMEs, these resources encompass financial capital, skilled human resources, and robust networks. The strategic framework emphasizes the development and utilization of these resources to address internal and external challenges.
Complementing RBV, Dynamic Capabilities Theory focuses on the capacity of organizations to adapt, integrate, and reconfigure internal and external resources in response to environmental changes (Teece et al., 1997). For SMMEs, dynamic capabilities are crucial for responding to market demands, technological advancements, and socio-economic changes. By incorporating strategies such as networking, collaboration, and mentorship, the proposed framework enhances SMMEs’ adaptability and resilience, aligning with the principles of dynamic capabilities. The integration of these theoretical perspectives provides a robust foundation for the strategic framework, ensuring that it is both theoretically sound and practically applicable.
2.2. SMME Support Strategies
To address the unique challenges faced by SMMEs in the Northern Cape Province, this study identifies and evaluates key support strategies that have the potential to enhance their resilience and sustainability. These strategies were selected based on evidence from both primary data (e.g., questionnaires and interviews) and existing literature, which consistently highlight critical gaps in financial access, infrastructure, market opportunities, and stakeholder engagement (Chimucheka & Mandipaka, 2015; DSBD, 2020; Weilbach, 2023).
Existing support frameworks often fail to account for the geographic isolation and resource constraints of rural SMMEs, resulting in ineffective interventions (Fanelli, 2021; Zahra et al., 2021). By grounding the proposed strategies in theoretical perspectives such as the Resource-Based View (RBV) and Dynamic Capabilities Theory, this study ensures their alignment with the specific needs of SMMEs while addressing structural barriers to growth and sustainability (Barney, 1991; Teece et al., 1997). The selected strategies—networking, collaboration, stakeholder engagement, incubation, mentorship, and CSR integration—are designed to foster resilience, improve resource utilization, and equip SMMEs to navigate dynamic economic conditions effectively.
Networking
Networking plays a crucial role in facilitating SMME growth by creating opportunities for collaboration, resource sharing, and access to new markets. Recent literature emphasizes that robust networking ties contribute to entrepreneurial success by facilitating the exchange of knowledge, resources, and trust among business partners (He et al., 2020; Gomes-Casseres, 2019). Networking events, such as trade fairs, business forums, and industry-specific workshops, provide platforms for SMMEs to engage with stakeholders, including financial institutions, government agencies, and larger corporations (Chimucheka & Mandipaka, 2015). Moreover, digital networks, including online marketplaces and virtual collaboration platforms, are increasingly critical for mitigating geographic isolation in the Northern Cape. These networks not only expand market access but also connect SMMEs with global value chains and support structures (Kulkarni, 2020).
Collaboration
Collaboration strengthens SMME capabilities by pooling resources, sharing risks, and fostering innovation. Tajeddini and Ratten (2020) argue that collaborative partnerships, including public-private partnerships, enhance SMMEs’ ability to scale operations and penetrate new markets. Collaborative frameworks such as co-working spaces, industry alliances, and innovation hubs are particularly effective in promoting knowledge sharing and resource optimization (Fanelli, 2021; Munyanyi & Pooe, 2019). This is especially vital during crises like the COVID-19 pandemic, where resource-sharing mechanisms allowed many SMMEs to sustain operations. In the Northern Cape, fostering a collaborative business ecosystem could involve government-led initiatives to incentivize partnerships and create cluster-based development models tailored to key regional industries (Mok et al., 2017; Trunina & Ashourizadeh, 2021).
Stakeholder Relations
Strong stakeholder relationships are integral to aligning SMME activities with societal and market expectations. Engaging stakeholders through workshops, social media platforms, and regular consultations ensures mutual understanding and trust (Mok et al., 2017). Effective stakeholder management strategies can also enhance SMME resilience by fostering co-creation and collaborative problem-solving (Schutte & Chauke, 2021a). Recent studies highlight that robust stakeholder relations improve brand loyalty, community support, and access to critical resources, which are essential for SMME sustainability (Zhou & Zondo, 2023; Amoah et al., 2021). Integrating stakeholder engagement tools into daily operaions can empower SMMEs to identify risks early and develop adaptive strategies.
Incubation
Incubation centers offer critical support services such as financial advice, market access assistance, and technology integration. These centers are particularly vital in resource-scarce regions like the Northern Cape, where SMMEs face limited access to infrastructure and expertise (Schutte & Chauke, 2021b). Tailored incubation programs that address sector-specific challenges have been shown to significantly accelerate SMME growth (Zhou & Zondo, 2023; Leboea, 2017). For instance, digital incubation initiatives can overcome physical barriers by providing virtual mentorship, online training, and access to global best practices. Expanding incubation programs in rural areas and integrating them with local industry needs could foster innovation and growth among emerging enterprises (Kunaka & Moos, 2019).
Mentorship
Mentorship enhances entrepreneurial skills and knowledge transfer, fostering both personal and business growth. Multi-mentorship approaches, involving diverse industry experts, are particularly effective in addressing a broad range of SMME challenges (Kunaka & Moos, 2019; Van Coller-Peter & Cronjé, 2020). Research indicates that mentorship programs improve decision-making, financial management, and market adaptability among entrepreneurs (Chimucheka & Mandipaka, 2015; Tajeddini & Ratten, 2020). Establishing structured mentorship initiatives in the Northern Cape could provide ongoing support and guidance tailored to the specific challenges faced by SMMEs in under-resourced environments.
Corporate Social Responsibility (CSR)
CSR initiatives enhance SMME sustainability by promoting ethical practices and social accountability. Ahmad et al. (2019) argue that aligning CSR efforts with global standards, such as ISO 26000, can strengthen brand reputation, attract investors, and improve community relationships. For SMMEs, CSR activities focusing on community development, environmental sustainability, and employee welfare are critical in building trust with stakeholders (Amaeshi et al., 2016; Gomes-Casseres, 2019). Encouraging SMMEs to incorporate CSR into their business strategies can help align their goals with societal priorities and position them as socially responsible entities within their communities (Zahra et al., 2021).
Addressing Barriers
Financial and infrastructural barriers remain significant challenges for SMMEs in the Northern Cape. Strategies such as improving access to funding, offering digital literacy training, and enhancing financial management skills are critical for overcoming these obstacles. Zahra et al. (2021) suggest that public-private partnerships can bridge funding gaps by combining government resources with private sector expertise. Similarly, Ophelia et al. (2021) emphasize the importance of technology in overcoming geographic barriers, particularly in rural settings. Simplifying funding application processes, providing targeted support for marginalized groups, and investing in digital infrastructure are essential policy interventions for strengthening SMME resilience (Fanelli, 2021; Munyanyi & Pooe, 2019).
Enhancing Sustainability
Embedding sustainability principles into business operations ensures that SMMEs remain competitive and adaptive to market changes. Continuous learning, innovation, and adaptability are vital for achieving long-term success (SEDA & DSBD, 2019; Amoah et al., 2021). Training programs focusing on digital transformation, green technologies, and market diversification can equip SMMEs with the skills needed to align with evolving global trends (Teece et al., 1997; Mok et al., 2017). Additionally, partnerships with sustainability-focused organizations and access to green financing options can enable SMMEs to adopt environmentally friendly practices and build resilience in a changing market environment (Tiwasing, 2021; Schutte & Chauke, 2021a).
3. Research Methods and Design
The primary research objective was to develop a strategic framework to provide actionable insights for stakeholders, including policymakers and support agencies, that foster the long-term sustainability and growth of SMMEs in the Northern Cape province, Sout Africa. The data and findings reported here were part of a larger research project, that undertook a pragmatic philosophical approach and adopted a convergent parallel mixed method design. The framework was developed using a mixed-methods approach. Quantitative data were gathered through structured surveys distributed to SMME owners across the Northern Cape’s five districts, while qualitative insights were obtained from semi-structured interviews with representatives of SMME support agencies. The findings from both phases were analyzed to identify key challenges and opportunities, culminating in the proposed framework.
3.1. Research Philosophy and Paradigm
This study adopted a pragmatic research philosophy, integrating both quantitative and qualitative methods to achieve a comprehensive understanding of the research problem. Pragmatism emphasizes practical solutions and the use of multiple approaches to gather actionable insights (Saunders et al., 2019). This perspective aligns with the need to address the complex and multifaceted challenges faced by SMMEs.
3.2. Research Design
The research employed a convergent mixed-methods design. Quantitative and qualitative data were collected concurrently to provide complementary insights into SMME challenges and support strategies (Creswell & Plano Clark, 2018). This design ensured that data from both phases were analyzed independently before being merged for an overall
3.3. Population and Sampling
The quantitative phase targeted SMMEs across the Northern Cape Province, with an estimated population of 30,761 enterprises (SEDA, 2023). Using a combination of convenience and snowball sampling, 377 questionnaires were distributed, yielding 207 valid responses. For the qualitative phase, purposive sampling was used to select 10 representatives from key SMME support agencies, ensuring their expertise and direct engagement with the sector.
3.4. Data Collection and Instruments
Quantitative data were collected using a structured questionnaire comprising closed-ended and Likert-scale questions, while qualitative data were gathered through semi-structured interviews. The instruments were designed to explore support strategies, limitations, and barriers faced by SMMEs.
3.5. Pilot Study
A pilot study was conducted to refine the data collection instruments. Feedback from 26 participants in the quantitative phase and two participants in the qualitative phase informed adjustments to ensure clarity, relevance, and reliability.
3.6. Data Analysis
Quantitative data were analyzed using descriptive and inferential statistics, including ANOVA and Pearson’s correlation, to identify patterns and relationships among variables. Qualitative data were analyzed through thematic analysis, supported by Atlas.ti software, to identify key themes and insights.
3.7. Ethical Considerations
The study adhered to ethical research practices, including informed consent, confidentiality, and transparency. Ethical clearance was obtained from CEMS, UNISA, ensuring compliance with institutional guidelines.
4. Results
This section presents the findings from the study, integrating quantitative and qualitative data collected through the questionnaire and interview guide. The results address the key research question and objectives, offering insights into the challenges, opportunities, and strategies relevant to SMMEs in the Northern Cape Province. Quantitative data highlight trends and patterns regarding operational and strategic challenges, while qualitative insights provide a nuanced understanding of region-specific issues and practical solutions.
4.1. Quantitative Findings
Biographical Insights
The demographic analysis revealed that the sample comprised a slightly higher proportion of female participants (51.6%) than male participants (48.4%), indicating a notable involvement of women in the SMME sector within the Northern Cape Province. Additionally, 46.3% of the businesses surveyed had been operational for 1 - 5 years, highlighting the prevalence of young enterprises and their potential vulnerability during early growth stages (Weilbach, 2023).
Support Needs
The survey results identified financial support as the most critical need for SMMEs, with 30% of respondents emphasizing this priority. Partnerships (18%) and entrepreneurial training (15%) were also frequently highlighted, underscoring the importance of collaborative efforts and skill development in enhancing business performance (Weilbach, 2023).
Barriers and Limitations
The analysis of barriers revealed that access to funding was the most significant challenge faced by SMMEs (mean = 4.14), followed closely by financial management challenges (mean = 4.04). These findings emphasize the critical need for targeted financial and managerial support mechanisms to address these persistent issues (Weilbach, 2023).
Reliability of Constructs
The reliability analysis confirmed the robustness of the constructs, with Cronbach’s alpha values indicating acceptable internal consistency for constructs such as “Support Strategies” (α = 0.762) and “Barriers” (α = 0.792). These results validate the use of these constructs in developing the proposed strategic framework (Weilbach, 2023).
4.2. Qualitative Findings
Support Gaps
The qualitative interviews highlighted significant gaps in support infrastructure for SMMEs. Participants frequently cited limited access to adequate business premises and poor quality of business plans as critical challenges. Furthermore, the stringent criteria imposed by funding institutions were perceived as a significant barrier to accessing financial support (Weilbach, 2023).
Strategies for Improvement
Respondents suggested several strategies to enhance SMME sustainability, including the provision of stipends for start-up entrepreneurs, improvements in training quality over quantity, and the introduction of expert-led mentorship programs tailored to the unique challenges of the Northern Cape (Weilbach, 2023).
Impact of COVID-19
The COVID-19 pandemic had a profound impact on SMMEs in the region. Many businesses reported severe cash flow challenges and operational disruptions, with some failing to recover entirely. However, transitioning to digital platforms was identified as a key survival mechanism, highlighting the urgent need for digital infrastructure development and literacy programs (Weilbach, 2023).
Barriers to Market Access
Geographic isolation and inadequate digital infrastructure were frequently identified as barriers limiting market reach for SMMEs. Respondents emphasized the need for technological and logistical interventions to overcome these challenges and enhance market access (Weilbach, 2023).
The findings reveal a complex interplay between financial, infrastructural, and market-related challenges. The qualitative and quantitative data collectively underscore the importance of an integrated approach that addresses immediate barriers while fostering long-term resilience through strategic support mechanisms.
Framework for SMME support
The contribution to the study was to develop a framework for SMME support strategies in the Northern Cape province, South Africa. The data has shown that support is provided to SMMEs, but it is not always aligned with the needs of SMMEs. Apart from the given support, SMMEs are also not aware of the strategies that they can use to reinforce their overall business strategy and survival. The support strategies originated from the research findings from both the quantitative and qualitative phases. Appendix A presents the building blocks with descriptions of the SMME support strategies’ framework, as well as some implementation suggestions. The framework comprises eight interrelated strategies that address both internal and external factors affecting SMME sustainability: Below is a diagrammatic presentation of the framework of SMME support.
Presentation of the framework for SMME support strategies
Figure 1 illustrates the associations between SMME support strategies, and the building blocks, as proposed in Appendix A.
Figure 1. Empirical findings linked to Strategy. Source: Weilbach, 2023.
Interactions Between Strategies
The proposed strategies—networking, collaboration, stakeholder relations, incubation, mentorship, CSR, addressing barriers, and enhancing sustainability—are interdependent and mutually reinforcing. Networking facilitates the creation of collaborative opportunities by linking SMMEs with potential partners, including larger corporations and government entities. This interaction fosters resource sharing and joint problem-solving. Mentorship programs within incubation centers enhance skill development and provide tailored support, equipping entrepreneurs to tackle specific challenges. CSR initiatives improve brand reputation and community trust, which, in turn, strengthen stakeholder relations and create long-term support networks. Furthermore, embedding sustainability practices across strategies ensures long-term resilience. For example, adopting green technologies during incubation or promoting sustainable supply chains through networking fosters both environmental and economic benefits. These synergies highlight the importance of integrating strategies into a cohesive framework to maximize their impact.
Linking Empirical Findings to the Framework
The empirical findings from the study directly informed the strategic framework. Table 1 below maps key findings to each strategy.
Table 1. Empirical findings linked to strategy.
Empirical Findings |
Strategy |
Financial support as the top priority |
Addressing barriers, Incubation |
Importance of partnerships and collaboration |
Networking, Collaboration |
Challenges in market access |
Networking, Digital strategies |
Need for entrepreneurial training and mentorship |
Mentorship, Incubation |
Impact of geographic isolation |
Stakeholder relations, Networking |
Importance of embedding sustainability practices |
Enhancing sustainability, CSR |
Source, Authors Own.
The findings reveal that financial support is a critical concern for many SMMEs, as navigating funding systems and accessing financial resources remain significant barriers. To address this, the framework emphasizes targeted incubation programs that combine financial literacy training with opportunities for accessing grants, loans, and alternative funding mechanisms. These programs are designed to be context-specific, considering the unique economic and industrial landscape of the Northern Cape to ensure their effectiveness.
Partnerships and collaborations were also highlighted as pivotal for SMME growth, particularly in overcoming isolation and accessing broader markets. To foster these relationships, the framework proposes initiatives such as regional trade expos, digital platforms for stakeholder engagement, and industry-specific collaboration programs. These efforts aim to encourage innovation, share resources, and strengthen supply chains, providing SMMEs with a more robust support network.
Market access challenges emerged as a recurring theme, underscoring the importance of digital strategies. The framework advocates for the integration of e-commerce platforms, digital marketing workshops, and technology-driven market linkage tools. By leveraging these digital solutions, SMMEs can enhance their visibility and competitiveness in both local and global markets.
The need for entrepreneurial training and mentorship was identified as essential for fostering resilience and growth. The framework addresses this by promoting mentorship programs that connect experienced entrepreneurs with emerging SMMEs. These programs focus on areas such as business planning, risk management, and operational excellence. Additionally, incubation hubs can serve as centers for continuous learning and innovation, equipping SMMEs with the skills needed to navigate a dynamic business environment effectively.
Geographic isolation poses unique challenges, particularly in building robust stakeholder relations. The framework suggests leveraging regional networks and fostering collaborations with local governments, NGOs, and community leaders. These partnerships can facilitate better access to resources, infrastructure, and policy support, helping SMMEs overcome the barriers imposed by their remote locations.
Finally, the importance of embedding sustainability practices was emphasized as a priority. The framework incorporates strategies for promoting green practices, resource efficiency, and socially responsible business operations. These efforts align with global sustainability trends and position SMMEs as proactive contributors to their communities and the environment, enhancing their long-term viability.
By linking these empirical findings to actionable strategies, the framework provides a comprehensive roadmap for addressing the unique challenges faced by SMMEs in the Northern Cape. This approach ensures that interventions are evidence-based, context-specific, and aligned with both short-term needs and long-term goals for sustainable growth.
5. Discussion
The proposed framework highlights the importance of aligning support strategies with the specific needs of SMMEs in the Northern Cape. By addressing both internal and external challenges, the framework provides a holistic approach to enhancing business sustainability. Networking and collaboration, for example, not only improve resource accessibility but also foster innovation and resilience through shared learning (Forsgren, 2016; Novotna, 2021). Stakeholder relations further strengthen the alignment between business goals and societal needs, creating a foundation for long-term partnerships and mutual growth.
Incubation programs emerge as vital for early-stage SMMEs, providing essential resources and mentorship that align with market demands (Schutte & Barbeau, 2022). Mentorship, particularly in multi-mentorship designs, proves to be a cornerstone in developing entrepreneurial competencies and ensuring the sustainability of mentorship programs through adaptive learning (Muthusamy, 2022). CSR initiatives, aligned with global standards such as ISO26000, emphasize the dual benefits of ethical business practices and societal goodwill, which are critical for fostering trust and brand loyalty (ISO26000, 2018).
Addressing barriers such as financial constraints and limited market access requires multi-faceted approaches, including leveraging digital technologies and public-private partnerships (Fanelli, 2021; Zahra et al., 2021). Enhancing digital infrastructure and promoting online business models are pivotal for integrating SMMEs into broader economic networks, both locally and internationally. Finally, embedding sustainability principles into everyday operations and strategic planning ensures that SMMEs remain competitive in a rapidly evolving economic landscape (Bushe, 2019).
Implementation in the Northern Cape Context
The unique socio-economic and geographic conditions of the Northern Cape necessitate tailored approaches to implementing the strategies. Networking initiatives should include localized events such as trade fairs and industry-specific workshops, leveraging the region’s existing businesses and support institutions. Collaboration can be fostered by establishing regional clusters for industries prominent in the Northern Cape, such as mining or agriculture, to encourage cooperative initiatives. Stakeholder relations can be strengthened by developing digital platforms to facilitate continuous engagement between SMMEs, community leaders, and government agencies, addressing geographic isolation. Expanding existing incubation programs to include virtual mentoring and training components ensures accessibility for entrepreneurs in remote areas. CSR efforts should focus on encouraging SMMEs to partner with local schools and community organizations for shared initiatives, creating a dual benefit for businesses and communities.
By tailoring these strategies to the Northern Cape’s context, the framework ensures a practical and region-specific approach to enhancing SMME sustainability and growth.
Although this study is region-specific, the proposed framework offers insights that can inform strategies for SMME development in other regions with analogous socio-economic conditions. Key elements, such as approaches to stakeholder engagement, resource mobilization, and addressing systemic challenges, have broader applicability. For instance, regions with limited government support for SMMEs or a reliance on specific industries may find these findings particularly relevant. Future studies could test the adaptability of the framework in diverse contexts to assess its robustness and transferability.
6. Conclusion
This study offers a practical framework for supporting SMMEs in the Northern Cape Province by addressing critical barriers and leveraging opportunities to promote sustainability. The eight strategies outlined provide actionable insights for stakeholders, emphasizing the alignment of support mechanisms with the specific needs of SMMEs. Key priorities include fostering networking, collaboration, and stakeholder relations to build robust support ecosystems. Concurrently, initiatives such as mentorship, corporate social responsibility (CSR), and tailored incubation programs are essential to address region-specific challenges.
Policymakers are encouraged to prioritize the development of region-specific policies that tackle the unique difficulties faced by SMMEs in under-resourced areas like the Northern Cape, including financial incentives for collaboration and innovation. Training programs focused on digital literacy, financial management, and sustainability practices are critical for enhancing SMME resilience and adaptability. Governments and industry bodies should facilitate networking platforms to strengthen collaborations and partnerships between SMMEs and larger corporations. Accelerating investments in both digital and physical infrastructure is essential for improving market access and operational efficiency. Furthermore, establishing mechanisms to monitor the effectiveness of implemented strategies will ensure continuous improvement and alignment with evolving SMME needs.
A collaborative effort among policymakers, support agencies, and industry stakeholders is vital to create an enabling environment that integrates modern technological advancements, strengthens institutional frameworks, and ensures efficient resource utilization. This holistic approach not only addresses current challenges but also prepares SMMEs to navigate future uncertainties. By implementing these strategies, SMMEs can transition from survival-oriented enterprises to resilient, growth-driven contributors to economic and social development.
7. Limitations of the Study
While this study provides a valuable strategic framework for enhancing SMME sustainability in the Northern Cape Province, several limitations should be acknowledged. The research focuses exclusively on the Northern Cape Province, which may limit the generalizability of the findings to other provinces or regions with differing socio-economic conditions and infrastructure. Although the study involved 207 quantitative respondents and 10 qualitative interviewees, the sample size may not fully capture the diversity of SMME experiences and challenges across all sectors within the Northern Cape. The study captures a snapshot of SMME challenges and strategies at a specific point in time. Changes in economic conditions, policy environments, or market dynamics may impact the relevance of some findings over time.
8. Areas for Future Research
To build on the insights provided by this research, future studies could explore the following areas: Expanding the study to include multiple provinces or countries could provide comparative insights into the unique and shared challenges faced by SMMEs and evaluate the adaptability of the proposed framework in different contexts. Conducting longitudinal research could assess the long-term impact and effectiveness of the proposed strategies, allowing for adjustments and improvements based on observed outcomes over time. Future research could focus on specific industries or sectors within the SMME ecosystem, such as agriculture, retail, or technology, to develop tailored support strategies for each. With digital transformation becoming increasingly critical for SMMEs, future studies could explore the role of emerging technologies such as artificial intelligence, blockchain, or e-commerce platforms in addressing barriers and enhancing competitiveness. Investigating the effectiveness of current government policies and programs in supporting SMMEs could identify gaps and recommend policy adjustments to better align with the needs of small businesses.
Appendix A
Building block |
Description/Implementation suggestions |
Networking |
Networking enhances and encourages SMME sustainability and survival (He et al., 2020: p. 979; Smolander, 2021: p. 9). Networking allows SMMEs to build relationships with all stakeholders, including other SMMEs, large organisations, governmental organisations, SMME support agencies, and private businesses (Novotna, 2021: p. 2; Udimal et al., 2021: p. 1). During networking sessions, SMMEs become familiar with their industry, the opportunities available, as well as the challenges pertaining to their specific industry (Altnaa et al., 2021: p. 287). SMMEs can also share ideas or insight on how to diversify or extend their existing product or service. Networks aid in the development of entrepreneurial competencies (He et al., 2020: p. 979; Mlotshwa & Msimango-Galawe, 2020: p. 10). To improve networking, policymakers should establish programmes that connect start-up SMMEs with new buyers, suppliers, and export intermediaries. The government can assist by arranging trade shows and festivals to assist new businesses to attend, or accommodate them, in national and international trade missions. It will assist SMMEs to develop new networks beyond those that already exist (Faroque et al., 2021: p. 11). |
Collaboration |
Collaboration is essential for business growth and sustainability (Elfring & Hulsink, 2019: p. 158; Tajeddini & Ratten, 2020: p. 29; Uko et al., 2021: p. 7). Collaboration enhances marketing capacities (Tajeddini & Ratten, 2020: p. 4). Collaboration can be employed as an information tool during emergencies to help mitigate potential risks (Meng, 2021: p. 1002). Collaboration can be achieved through partnerships and/or joint ventures (Allgén & Schreurs, 2021: p. 38). Businesses can combine their assets and achieve greater outcomes through collaboration (Gomes-Casseres, 2019: p. 3; Tajeddini & Ratten, 2020: p. 4). A standardised database could be developed and maintained to aid collaboration activities (DSBD, 2020: p. 24). It will assist SMMEs to easier add new ties to their existing networks (Elfring & Hulsink, 2019: p. 158). Initiators of collaborating activities or indabas (workshops/conferences) should have open conversations about their goals and vision for the envisioned or planned collaboration, in order to get mutual acknowledgement and support from all participants (Turunen, 2020: p. 54). |
Stakeholder relations |
It is important for businesses to know who their stakeholders are and to have relations and/or regular engagements with stakeholders to ensure that they are aware of the strengths, weaknesses, opportunities, and threats of the business (Mok et al., 2017: p. 2; Soriano, 2021: p. 55; Trunina & Ashourizadeh, 2021: p. 1). Positive relations with stakeholders assist in identifying opportunities to align business practices with societal needs and expectations, helping long-term sustainability and shareholder value (Erasmus, 2020: p. 115). SMMEs should therefore have positive stakeholder relationships as well as a stakeholder engagement plan that can assist in times of a crisis (Ndlela, 2019: p. 25; Wicks & Harrison, 2019: p. 4; Pusceddu et al., 2022: p. 76). Surveys and stakeholder workshops are techniques to embrace stakeholder engagement (Ferrero-Ferrero et al., 2018: p. 24). SMME owner/managers are encouraged to acquaint themselves with the use of digital media to further strengthen their means of communication and engagement with stakeholders (Camilleri, 2018: p. 7). |
Incubation |
Incubation centres support SMMEs with administrative functions, business advice, training and development initiatives, technical support services, facilitate access to finance, and create opportunities for business marketing and networking (Schutte & Chauke, 2021a: p. 12; Zhou & Zondo, 2023: p. 7). For business incubators to be effective, networking and the effective management of stakeholders are pivotal (Schutte & Barbeau, 2022: p. 14). The government should promote the roll-out of incubation programmes across the country, as such initiatives will help SMMEs to grow, despite a potential lack of resources and/or experience (Zhou & Zondo, 2023: p. 8). The government should also support incubators with their technological adoption measures as this can make it easier for them to reach and serve SMMEs (Lose & Khuzwayo, 2021: p. 40). Business incubators should regularly assess the needs of SMMEs, to ensure they provide services that address the needs of SMMEs (Hewitt & Janse van Rensburg, 2020: p. 8; Klonaridis & Meyer, 2022: p. 813). Furthermore, business incubation centres should involve established entrepreneurs to assist SMMEs with hands-on experience; this will assist business incubation centres to keep a database of the performance of incubated SMMEs (Dlamini, 2020: p. 69). |
Mentorship |
SMME support agencies offer mentorship programmes. Advantages of mentoring include skills and knowledge transfer, ensure entrepreneurial self-development, and business sustainability (Kunaka & Moos, 2019: p. 2; Van Coller-Peter & Cronjé, 2020: p. 65). Skills transfer ensures that SMMEs have the ability to identify and evaluate business opportunities, develop a clear business vision, manage a business, achieve their goals, and extend their networks. Knowledge transfer will occur, which may result in an understanding of financial aspects, and operational and human resources issues. An entrepreneurial character will evolve and which will increase
self-efficacy and confidence, foster an entrepreneurial culture and encourage personal development. It will also increase business productivity, improve post-sale follow-ups, increase sales revenue and profitability, reduced costs, and improve business survival. It will therefore foster the sustainability of SMMEs (Willemse, 2018: p. 94; Kunaka & Moos, 2019: p. 2). Furthermore, business incubators play a pivotal role in the initiation of mentorship (Van der Spuy, 2019: p. 1); for example, business incubates who graduate can be used as mentors for new start-up businesses (Dlamini, 2020: p. 69). A needs analysis of mentees should be conducted before mentoring services are rendered (Muthusamy, 2022: p. 159). It is advisable that a mentoring fee is allocated to mentors, however, it should be aligned with the performance of the mentee (Muthusamy, 2022: p. 158). A multi-mentorship design should be considered by mentoring institutions as a single mentor is not an expert in all fields (Muthusamy, 2022: p. 158). The government should avail sufficient funds for mentorship programmes (Muthusamy, 2022: p. 160). To ensure the sustainability of mentorship, continuous engagement with stakeholders, such as with local government, universities, business actors, and the local communities are important (Rosyadi et al., 2020: p. 3). |
Corporate social responsibility (CSR) |
The outcomes of CSR for SMMEs include higher profitability, the development of new products/services, enhanced image and reputation in society, an increase in sales, brand awareness, productivity, quality, and sustainable employment (Amaeshi et al., 2016: p. 30; Ahmad et al., 2019: p. 209; Erasmus, 2020: p. 111). SMMEs should adopt the principles of the International Organisation for Standardisation (ISO26000), which focus specifically on CSR. The ISO26000 will provide SMMEs with guidance on how they can implement CSR into their overall business strategies (ISO26000, 2018: p. 4). Successful implementation of the ISO26000 principles will attract new partnerships, investors, and clients; improve relations with employees and communities, the media, suppliers, and government agencies; help to establish more stable supply chains; contribute to sustainable development by reducing harmful environmental, social, and economic impacts; help manage and reduce risks; and identify new markets (ISO26000, 2018: p. 5). SMMEs should then implement control measures to evaluate their CSR performance (Isaksson & Mitra, 2019: p. 2). Through CSR reporting, SMMEs can evaluate their performance, as well as build their reputation amongst (potential) investors, clients, and the public (Aregbeshola, 2017: p. 82; Kahloul et al., 2022: p. 312). SMMEs will need support from the government in terms of CSR principles and policies to strengthen business management (López‐Concepción et al., 2022: p. 29). Commitment to CSR is important in managing a successful business and should be aligned with the organisation’s strategy with all the stakeholders (Boshoff, 2020: p. 89; Bian et al., 2021: p. 914). Consequently, SMMEs will experience business survival and sustainability (Zarefar & Sawarjuwono, 2021: p. 103; López‐Concepción et al., 2022: p. 29). |
SMME barriers |
Barriers to finance, market access, and infrastructure are major constraints SMMEs experience in the Northern Cape province (DEDAT, 2016: p. 15; Hewitt & Janse van Rensburg, 2020: p. 6; Weilbach, 2024: p. 2). Therefore, the researcher focused on how SMMEs could overcome these barriers. Financial barriers can be combatted by the implementation of small changes, such as recordkeeping. Proper recordkeeping will reduce the perception of risk associated with their businesses, as this will enhance the accessibility of finance from financial sources, such as banks, and company trusts (Ophelia et al., 2021: p. 199; Owusu et al., 2021: p. 10). Furthermore, SMMEs should consider collaboration with other SMMEs in the form of co-operatives, which will allow them to share their risks when asking for bank loans (Ophelia et al., 2021: p. 199). SMMEs could also explore new avenues to raise funds, such as new markets/products/market days, to reduce their over-reliance on traditional financial institutions, such as banks or the government (Hagin & Caesar, 2021: p. 16). In the event of a lack in financial management skills, advisory services should be outsourced (Oosthuizen et al., 2020: p. 10). |
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Market access could be easier when SMMEs collaborate with large businesses, as their product/ service innovation will improve (Ismanu et al., 2021: p. 309). SMMEs should also improve into their technological capabilities, to explore e-purchasing and online imports and exports (Fanelli, 2021: p. 12; Fourberg et al., 2021: p. 37; Zahra et al., 2021: p. 183). SMMEs who want to operate in the digital economy will be able to advertise their products/services to a bigger market (Pilotti et al., 2021: p. 771; Tiwasing, 2021: p. 1909). The acceptance and implementation of digital systems and solutions will facilitate SMMEs with internationalisation (Szabó et al., 2023: p. 15). However, to achieve internationalisation, it is important for SMMEs to invest in Internet literacy (Istifadah & Tjaraka, 2021: p. 419), and the government should encourage SMMEs to explore exports to overseas markets (Christianty & Hidayati, 2020: p. 102). As the catalyst of the growth of an economy, infrastructure can aid to businesses’ transaction costs, improving market access, and improving the efficiency of other production factors (Luo & Xu, 2018: p. 258; Khan, 2022: p. 38; Ferejo et al., 2022: p. 1528). To combat barriers to infrastructure, the government should ensure that SMMEs can operate in a business-friendly environment that includes the availability of road networks, electricity supply and water; digital networks, communication technologies, physical office/building spaces, and land (Chimucheka & Mandipaka, 2015: p. 313; Mugo et al., 2019: p. 146; Onyeiwu & Nkoyo, 2020: p. 15; Budiyanti et al., 2021: p. 390). The environment should be established in such a way that it promotes or allows new enterprises to develop existing ones to grow and be sustainable (Chimucheka & Mandipaka, 2015: p. 313). Furthermore, the government should build digital infrastructure and create awareness amongst SMMEs of the advantages of improving their digital skills in business (Kulkarni, 2020: p. 8; Budiyanti et al., 2021: p. 390). |
Limitations and sustainability factors |
SMMEs that are sustainable benefit from three broad categories, namely, demand, the political environment, and business environment (Sommer, 2017: p. 48; Menne et al., 2022: p. 1). Factors that affect business sustainability can be internal or external (SEDA & DSBD, 2019: p. 10). SMMEs can be sustainable if they are provided with financial assistance and contribute to research and development when their product or service is able to penetrate the market and is accepted by customers (Amoah et al., 2021: p. 21). However, governments should ensure that guidance pertaining to SMME sustainability incudes information to key sectors, such as primary industries (tourism, hospitality, construction, and professional services) (SBC, 2019: p. 22). Furthermore, support to SMMEs should be industry-specific (Jeganathan et al., 2021: p. 77). SMMEs should work in partnership with an organisation that provides sustainability programmes (Jedynak, 2015: p. 108; OECD, 2021: p. 1). SMMEs should conduct continuous research of all the role players in the business cycle (Ford et al., 2017: p. 28). Therefore, is it a requirement for SMME owners/managers to continuously engage in training to increase their capacity to manage their businesses. It will require from them to constantly engage in learning to enhance their personal growth (Bushe, 2019: p. 23). |