JOHANNESBURG — OCTOBER, 2019 — While business sentiment in South Africa has been depressed for the year to date, an increase in the Yoco Small Business Pulse Score for the third quarter of 2019 reflects not only the resilience of small business, but also an ability to adapt faster than their larger counterparts.
Through a quarterly analysis of factors influencing small businesses, including data from more than 50 000 Yoco merchants, the Pulse closely monitors the health of this sector in the country. A quarterly Pulse Score, a rating from -100 to 100, with 0 being neutral, provides an overall measure of small business sentiment. The Pulse Score for Q3 2019 was 28, a two-point increase from the year’s second quarter. This correlates with Yoco stats that show a 13.13% increase in average card transaction volume per merchant relative to the same time last year. Up from an 8.14% increase last quarter.
“When we launched the Yoco Small Business Pulse Score a year ago, we wanted to provide deep insight into the unique perspectives, outlooks, and challenges faced by this sector. Other surveys typically focus on larger organisations, which face different challenges and are differently impacted than those closer to the ground. With small businesses being the lifeblood of the economy, it is important to understand their vision for growth, and the factors challenging that growth,” says Matt Brownell, head of brand marketing at Yoco.
The country’s other business confidence surveys have charted an ongoing downward trend over the past several months. In contrast, the Yoco Small Business Pulse reveals the start of what is hoped to be an upward curve, indicating that small businesses are showing some signs of improvement after a turbulent 12 months. The marginal increase does not imply an end to current challenges. Instead, the ability of small businesses to pivot more quickly than slow-moving corporations could mean they are finding increasingly innovative ways to overcome difficult market conditions.
Additionally, the Pulse acts as a bellwether to business trends due to small business’s sensitivity to external influences. Unlike the corporate sector’s relative insulation against market forces, small businesses have very little “fat” and thus react almost immediately to down- or up-turns. As such, what the small business sector experiences today, will likely be felt by larger companies in the near future.
And while the poor state of the economy, political uncertainty, and crime are still significant challenges to overcome, the Pulse has found that concerns around strikes and protests have almost doubled since the previous quarter.
“We are dealing with one of the economy’s most tenacious and innovative sectors. Its ability to thrive, despite an extremely challenging environment, is testament to business owners’ ability to read market conditions and consumer demands. Q4 will be an interesting one, as we head into the festive season, which will be counterbalanced by the increasing threat of load shedding. As the Pulse enters its second year, we look forward to providing even greater insights on the small business landscape of South Africa,” says Brownell.
The full report can be downloaded here: https://www.yoco.co.za/blog/yoco-pulse/
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