Despite economic volatility, South African small business owners remain optimistic and are actively pursuing growth, according to research by cloud-based accounting software company Xero.

The research report, titled ‘State of South African Small Businesses’, highlights the challenges facing entrepreneurs and was conducted in partnership with technology research organisation World Wide Worx.

The report is based on a survey, conducted in July and August, of 411 small business owners across 25 markets, including retail, information technology, travel and tourism, in all nine provinces. Most of respondents are located in the Western Cape (32%) and in Gauteng (30%).

The survey found that 68% of small business owners regard economic volatility as their biggest challenge.

Yet, despite the uncertainty, small business owners remain optimistic about overcoming the challenges ahead, with 40% predicting company growth over the next year, while 45% expect their organisation to remain of similar size.

“Small business owners face turbulent times ahead, but this country’s entrepreneurs are . . . resilient. In fact, 40% still expect to grow this year. It’s those businesses able to adapt to these challenging circumstances that will succeed regardless of economic volatility,” Xero Europe, Middle East and Africa (Emea) small business director Darren Upson notes.

Enterprise development and funding services provider MyGrowthFund and Iconoclast Knowledge Bureau CEO Vusi Thembekwayo adds that it has been a difficult year for tthe small-business sector.

“As economic turmoil has intensified, the challenges facing businesses of all sizes have multiplied – with small businesses especially being affected. Technological nous, agility and adaptability will be key to navigating the choppy waters of the next few years, and the country’s small businesses have them in droves.” The key challenges to small-business owners include cash flow and competition, with the research revealing that cash flow worries are a concern for 35% of the country’s entrepreneurs, while 23% worry about future sales.

Meanwhile, the rate of technology adoption is also increasing, with 49% of South Africa’s small-business owners saying that technology is essential to the running of their business, while 74% use mobile apps for business daily. The research also reveals that 89% of small- business owners are confident about managing their companies’ finances. These businesses also rated technology as essential or very important to the running of the business.

Meanwhile, 92% of small-business owners have not missed a tax deadline.

However, government support remains a key issue for South African entrepreneurs, as 89% of small businesses note that the Department of Small Business has not supported or helped their business, according to the survey.

Further, 48% of smal-business owners want government to provide more funding, while 43% believe government should grant tax breaks for their business.

In 2017, small businesses plan to invest in marketing (36%), equipment (28%) and product development (22%).