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South African SMBs are working harder to adjust to rising costs

  • Despite high costs presenting a significant barrier for South African SMBs, the majority are confident about their business’ success in 2023.
  • Over a third (41%) say that ‘working more efficiently’ is increasing business confidence, the highest figure of any surveyed country.
  • Tech adoption is key to productivity and growth for SMBs in 2023, almost half plan to increase their investment in tech and are open to emerging tech like AI and robotics.

Johannesburg, 08 May, 2023 – Sage’s annual survey of almost 12,000 SMB leaders globally – ‘Small Business, Big Opportunity’  – finds that despite a challenging 2022, where rising costs significantly impacted profitability, South African small and medium businesses (SMBs) remain optimistic about their prospects.

The findings reveal that 83% of business decision-makers are confident their company will be successful 12 months from now, an increase from 2022 of 76%. Over a third (41%) say that working more efficiently is increasing business confidence.

Looking to the next twelve months, over half (54%) of South Africa’s SMBs expect an increase in revenue, with 42% expecting to increase their workforce.

Driving resilience through increased productivity

In 2022, high costs presented a significant barrier for South African SMBs, more so than any other country surveyed, with over three quarters (77%) citing inflation as a drag on their business outlook. This trend particularly impacted SMBs in Johannesburg and Cape Town, with 81% and 80% of SMBs reporting a drag on their confidence because of inflation.

However, business decision-makers are working more efficiently to overcome challenges. South African SMBs are more likely than their global peers to have added new products and services to overcome barriers, and 82% report being satisfied with current productivity levels.

Adoption of technology is critical for business success, but SMBs may suffer from low investment commitments

Technology is considered as a crucial component in future success, with nearly half (47%) intending to increase their technology investment. South African SMBs want to implement cutting-edge technologies during the next three years, such as 5G (23%), artificial intelligence (21%) and robotics (19%). 

Despite this, South African business leaders expect to increase their technology investment by only 14% - a decrease from 2022, and below the global average. They cite a lack of budget and difficulty in understanding the best tech options as the top barriers to higher investment in technology.

Pieter Bensch, Executive Vice President for Sage Africa & Middle East, commented: “South African SMBs have shown remarkable agility in navigating multiple crises from COVID-19 to load shedding over the past three years. They have invested in talented teams, boosted their productivity, and confronted costs head-on.

“But we should not take them for granted, given their contribution to South Africa’s economy, their central role in communities, and their potential to create jobs. With utility costs rising, an uncertain power supply, slow economic growth, and global inflation, more must be done to help our SMBs to survive and thrive.

“Government can play an important enabling role by fast-tracking economic reforms and keeping SMBs front of mind in decision making. It’s especially key to accelerate efforts to end the load shedding crises and to support SMBs with the resources and opportunities they need to exploit technology at scale, given the existing barriers around further investing in tech.”

Andrea Graham, accountant and owner at Quality Accounting Complete Reporting, said: “Our family-run business moves into the future with confidence and optimism. With the right technology platforms in place, we’re on top of our finances and able to plan for growth and success.” 

Heidi, office manager of Highveld Fire Safety, which provides services to small and large enterprises such as Mines in Africa, expressed a similar sentiment. “With the COVID-19 pandemic behind us, business is returning to normal. We’ve endured the challenges of the past few years in partnership with our customers, putting their needs at the centre of our business. Adopting a customer-centric approach will sustain SMBs.”


Note to editors

Sage, in partnership with Strand Partners, conducted an online survey of 11,986 SMB business leaders in February 2023, including 1,111 in South Africa. The remaining markets included as part of this study are Canada, France, Germany, Ireland, Portugal, Spain, the UK and the US. In each market, except the US (where a specific sample was included for those employing 250-500 people due to a different official definition of SMB), decision-makers at businesses employing fewer than 250 people were targeted.

To download the full research report, visit the ‘Small Business, Big Opportunity’ page.

The sample included a diverse range of SMB decision makers globally, with the sample size for each market being as follows:

 Country  Sample size
 Canada  1,200
 France  1,221
 Germany  1,068
 Ireland  1,067
 Portugal  1,032
 Spain  1,002
 South Africa  1,111
 United Kingdom  2,138
 United States  2,147

This is the second year Sage has conducted this survey. You can find the 2022 report here.

Comparative data from 2022 and 2023 SBBO research:

South Africa 2022  2023 Change
% SMBs expecting revenue to stay the same or increase next year 66% 73% 7%
% SMBs experienced increased costs during the last 12 months 42% 65% 22%
% SMBs confident about business success right now 75% 70% -5%
% SMBs expecting to increase investment in tech over next 12 months 75% 82% 7%
% SMBs expecting to increase investment in tech over next 12 months 42% 42% 47% 5%
Average SMB % predicted change in investment in tech over next 12 months 17% 14% -3%

About Sage Group

Sage exists to knock down barriers so everyone can thrive, starting with the millions of small- and mid-sized businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology, and experience to tackle digital inequality, economic inequality and the climate crisis. Learn more at

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