South Africa's SME sector is increasingly in need of consulting support

Small and medium enterprises (SMEs) dominate the South African economy, and as they begin to adapt to shifting market conditions, the demand among them for consulting services of various types is set to increase significantly, according to Reginald Pillay, co-founder and Managing Director at business advisory firm Ariston Global.

Characteristic of a developing economy, SMEs make up a large portion of South Africa’s business environment, indicating a strong promise of future growth. Just over 90% of legitimate businesses in the country can be categorised in the SME sector, employing well over half the workforce, and accounting for just over a third of the GDP.

To ensure that the South African economy remains globally competitive, it is essential that the SME sector evolves in tandem with global trends, which is increasingly the case. Digital enhancements such as cloud computing, for instance, were originally a source of hesitation for SMEs due to the high costs of transition and operation.

However, this attitude has undergone a shift recently, as an increasing number of SMEs realise the value of investing in the new technology, although some new technologies have gained more momentum than others. According to Reginald Pillay, the consulting industry – which has traditionally focused on supporting larger firms – has also now begun engaging with the SME sector as it continues its development.

Pillay has an academic background in taxation and has held the professional roles of Risk Analyst at ATM Solutions and Assistant Finance Manager at Verizon Business South Africa. Following that, he co-founded Ariston Global, where he is now Group Managing Director. Ariston Global is a Johannesburg-based consulting firm that offers services in accounting, taxation, human resources, payroll, strategy, business optimisation, compliance, advisory, and recruitment.

According to Pillay, SMEs are often caught in a dichotomous scenario, wherein their business is growing rapidly, but a relatively weak strategy and structure prevents them from identifying the factors responsible for success, and those that may present challenges. Furthermore, most SMEs lack the internal resources to rectify this situation, which is where the consulting industry can help.

“SMEs are the fastest growing sector in South Africa; conversely a large proportion fail within the first five years of business. It is for this reason that consulting companies are starting to engage with small and also medium to large companies. Through integrated services, including accounting and taxation, business optimisation, strategy, compliance, and recruitment, consultants are able to guide and assist a business to successfully manage its growth path,” said Pillay.

He added, “It is important to select a team that will diagnose the real issue and provide a practical plan that will assist the business to not only grow, but build a solid foundation moving forward.”