Cape Winelands District Municipality

Informal Sector Survey

Project Details

Project Title:Cape Winelands Informal Sector Survey

This Report Commissioned by: Project Consultant:

Business Advisory Services an

independent division of

Environmental and Conservation Management

Solutions

Contact Details:

Contract Manager:

Gayle DanielsCape Winelands District Municipality,

46 Alexandra Street,

Stellenbosch, 7599

Tel: 021- 888 5151

gayle@bolanddm.co.za.

Project Task Leader:

Eugene MatthewsSt John’s Place

8 St John’s Street,

George, 6539

Tel: 044 8840481

eugene@londoloza.co.za.

Document Reference:Cape Winelands District Municipality. 2008. Informal Sector Survey

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Table of Contents

Project Details..................................................................................................................................21 Introduction....................................................................................................................................2

1.1 Background............................................................................................................................21.2 Qualifying the Cape Winelands Informal Sector...................................................................2

2 Methodology..................................................................................................................................22.1 Research design.....................................................................................................................22.2 Quantitative approach: Structured face-to-face interviews..Error! Bookmark not defined.2.3 Questionnaire development...................................................................................................22.4 Sampling................................................................................................................................22.5 The quality of data.................................................................................................................2

3 Regulatory Framework Governing Informal Traders....................................................................23.1 Breede Valley Context...........................................................................................................23.2 Drakenstein Municipality Context.........................................................................................23.3 Regulatory Limitations to Informal Traders..........................................................................23.4 Witzenberg Context...............................................................................................................23.5 Informal Trading Management Framework..........................................................................2

4 Informal Sector Case Studies.........................................................................................................24.1 Business older than 3 years more than 10 workers................................................................24.2 Business older than 5 yrs.......................................................................................................24.3 Business older than 5 years and turnover R 150’000 - R 500’000 per annum......................2

5 Results............................................................................................................................................25.1 Section A- General Information............................................................................................25.2 Section B- Job Creation.........................................................................................................25.3 Section C- Government Incentives........................................................................................25.4 Section D- Business Growth Factors.....................................................................................2

6 Summary and Recommendations..................................................................................................2

List of figures

Figure 1: Position of the person completing the questionnaire.............................................................2Figure 2: Gender split for survey participants.......................................................................................2Figure 3: Age split for survey participants............................................................................................2Figure 4: Education levels for survey participants................................................................................2Figure 5: Types of legal entities............................................................................................................2Figure 6: Entrepreneurs’ level of involvement in the business.............................................................2Figure 7: Extent to which entrepreneurs have had previous business experience.................................2Figure 8: Size of business (in Rand value)............................................................................................2Figure 9: Size of businesses (by number of staff).................................................................................2Figure 10: Age of business....................................................................................................................2Figure 11: Extent to which informal businesses are affiliated to business groups or franchises..........2Figure 12: Types of informal businesses...............................................................................................2Figure 13: Sources of funding for informal businesses.........................................................................2Figure 14: Entrepreneurs current business confidents...........................................................................2Figure 15: Breakdown of people employed in the informal sector.......................................................2Figure 16: Employment in the informal sector 2007.............................................................................2

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Figure 17: expected growth for 2009.....................................................................................................2Figure 18: Employment trend................................................................................................................2Figure 19: Entrepreneurs’ knowledge of government incentives..........................................................2Figure 20: Entrepreneurs’ source of knowledge regarding government incentives..............................2Figure 21: Historical use of government incentives..............................................................................2Figure 22: response to local government regulations concerning the business environment................2Figure 23: Location of suppliers doing business with informal businesses..........................................2Figure 24: Extent to which informal sector businesses experience problems buying stock..................2Figure 25: Extent to which big business interacts/deals with informal businesses...............................2Figure 26: Extent to which entrepreneurs would welcome government assistance with business development...........................................................................................................................................2Figure 27: Entrepreneur ranking of business growth factors.................................................................2

List of tables

Table 1: Breakdown of municipalities and location of where surveys were done................................2Table 2: Average number of similar businesses per area per municipality...........................................2Table 3: Estimation of the extent of the informal sector.......................................................................2Table 4: Reasons for Businesses Growth Expectation Results..............................................................2Table 5: Indication of government incentives used...............................................................................2Table 6: indication of problems experienced with local government regulations.................................2Table 7: indication of support to be received by local government.......................................................2Table 8: Business growth factors...........................................................................................................2Table 9 Additional Comments on Fig. 27..............................................................................................2

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1 Introduction

1.1 Background

The Cape Winelands integrated Development Plan and well as the Growth and

Development Strategy has outlined the need to stimulate economic development in the

region. In order to stimulate economic development, the Cape Winelands District

Municipality has geared itself towards the development of a path that promotes shared

growth and integrated development.

Part of this growth and development process relies on the accurate identification and

understanding of the informal economy. By understanding the informal economy the

municipality is better equipped to intervene with this sector, in order to better promote

the growth of businesses in this sector.

1.2 Qualifying the Cape Winelands Informal Sector

In order to get a better understanding of the informal sector the CWDM has requested

that a small scale sample of 250 surveys be undertaken. These surveys were to be

stratified according to age business type, gender and location. In addition the expected

outputs for this survey were outlined as follows:

Survey economic activities within the informal sector throughout the five B-

municipal areas

Gender distribution

Age distribution

Distribution of business types within the informal sector

Assess the regulatory framework governing informal trading

Investigate basic infrastructure needed for the informal economy

Look at challenges and barriers facing the informal sector along with support

needed by the sector

Define the relative performance and contribution by the informal sector to the

CWDM economy

Assess the impact of existing institutional support to the informal sector.

Develop case studies of successful entrepreneurs in the sector

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Growth/ decline of the sector over the past five years.

The above outputs are addressed in various sections of this report and will be discussed

to a lesser or greater extent in either, the results and the summary and recommendations

sections of this report.

2 Methodology

2.1 Research design

The survey undertaken for the study is based on the Community Based Participatory

Research methodology. The methodology specifically utilizes local community members

of the particular community that is being surveyed. The reason for this is so that the

information gathered remains in the community. The individuals who then gathers the

information is empowered to utilize the information on a local basis.

The informal sector survey for the Cape Winelands follows the same methodological

principals as for CBPR, with modifications being made to apply to this survey.

The survey approach comprised a structured questionnaire administered to the business

owner, or manager, or person responsible for the day to day running of the business. Specific

selection criteria for conducting the survey were decided before hand. These criteria

included:

Surveys must be split equally among municipal areas

Businesses should not be registered with SARS

Business entities other than sole proprietorships may be surveyed, provided that they are

not registered with SARS, Compensation Commission, or Unemployment Insurance

Fund

2.2 Questionnaire development1 The questionnaire for this study was adapted from Rutherford 20062, and presented to the

LED Staff for approval. The questionnaire was designed with four sections, outlining the

general information relating to informal sector business, job creation, government

1 See Annexure 1 informal Sector Survey Questionnaire2 Rutherford D. 2006.Towards a development strategy for small businesses in the tourism industry of the Southern Cape. University of Pretoria: Department of Tourism Management.

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incentives and business growth factors, these sections are reported in detail under section

3.

The questionnaire was adapted in association with members from the LED department

giving inputs for the questionnaire. In addition to this input the

2.3 Sampling

Sampling is a method of obtaining information about a large group by examining a

smaller, randomly chosen selection (the sample) of group members. If the sampling is

conducted correctly, the results will be representative of the group as a whole. In this

survey, the sample was taken in a way that would ensure two things:

1. It should yield an accurate informal business sector profile of each of the B-

municipalities that constitute the Cape Winelands District Municipality;

2. Secondly, the results from the various municipalities should be comparable.

For the purposes of this study the sample was set at 250 surveys to be distributed

throughout the region. Table1 outlines where surveys where doneTable 1: Breakdown of municipalities and location of where surveys were done.

Cape Winelands Informal Business Sector Survey   

municipalityforms required completed outstanding comments

Witzenberg        Tulbagh 8 8  Wolesley 10 10  Ceres 22 22  Prince Alfred’s Hamlet 5 5  Op die Berg 5 5  Total 50 50  Drakenstein        Paarl 20 20  

Gouda 10 8 2

one outstanding form will be mailed; no other businesses were found

Wellington 10 10  Mbekweni 10 10  Total 50 48  Breede Vallei        

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Worcester 20 46

with prior arrangement outstanding forms in De Doorns were completed in Worcester

Rawsonville 10 10  De Doorns 10 0  

Touwsrivier 10 6 4Outstanding forms were completed in Worcester

Total 50 62  Breede River Winelands        Robertson 10 10  

Ashton 10 8 2Outstanding forms were completed in Worcester

Bonnievale 10 0 10

Could not find a "huiswinkeltjie" or stalls.(Outstanding forms were completed in Worcester)

Montagu 10 10  McGregor 10 10  Total 50 38  Stellenbosch        Stellenbosch 10 10  Franschhoek 10 10  Pniel 10 10  Klampmuts 10 10  Kayamandi 10 10  Total 50 50  Totals 250 248    

2.4 The quality of data

The research team put in place a number of controls to guarantee the quality of the data that

further enhances representivity. Fieldworkers were trained to deal with each question and, as

part of their training; they had to complete two “mock” interviews with community

members. The research team evaluated each of these interviews and discussed problems with

the fieldworkers in one of the training sessions. In addition to the training presented to the

whole fieldwork team, supervisors were required to attend and complete an additional

raining prior to the training of the fieldworkers. During this two-day training session,

supervisors were trained specifically on the questionnaire’s content, as well on as the

logistical plan for the survey.

The second control was the design of a detailed logistical plan that comprised the following:

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1. The exact number of questionnaires to be completed for each fieldworker on each day;

2. The respondents’ population distribution (household heads or responsible adult part of the

household);

3. The exact distribution of questionnaires to be conducted in urban and rural areas

respectively.

To minimize confusion about the area in which fieldworkers should work, they were

assigned to a specific municipality in which they would work for the duration of the survey.

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3 Regulatory Framework Governing Informal Traders In defining the regulatory framework for informal traders a more indepth look was taken into

the regulatory environments of the 5 B-municipalities in the study area. The investigation of

the regulatory framework aimed to answer 1 fundamental question viz. How does the by-laws

of the municipalities affect (encourage or restrict) informal business’ ability to trade?

Informal trading is defined as the economic activity undertaken by entrepreneurs who sell legal

goods and services within a space deemed to be public property, within the informal sector.

The implication is that informal trading management requires a public space management

focus3. While the definition as articulated could include trading taking place from private

property, many of the municipalities’ policies seek to address the regulation only of those

trading activities taking place on publicly owned property. This therefore means that any

businesses that are regarded as informal by its very nature, but are conducted on private

property of the trader’s are not necessarily recognized within these by-laws.

Nonetheless the Business Act, 1991 (Act 71 of 1991) clearly defines ‘‘informal trader’’ as any

person who carries on the business of street vendor, pedlar or hawker and includes any

employee of such a person as well as including any person who trades in a public space. In

March 2004, the municipality of Breede Valley promulgated its by-laws with regards to

informal trading (PN59/2004) by referring to section 6 A (1) of the Business Act, 1991 (Act 71

of 1991) and section 26 of the Western Cape Road Traffic Act, 1998 (Act 12 of 1998), as well

as regulation 322 of the Regulations in terms of the National Road Traffic Act, 1996 (Act 93 of

1996) and section 190 of the Municipal Ordinance, 19744.

3.1 Breede Valley ContextThere appears to be clear guidelines within the Breede Valley Municipality about the

management of informal traders, especially hawkers. For instance the municipality has a form

that stipulates the memorandum of agreement between itself and the informal trader. The

memorandum clearly indicates the terms and conditions of the space/stall that the trader is

3 Drakenstein Municipality. 2006. Draft Informal Trading Management Framework. 4 Province of Western Cape. Breede Valley Municipality: Promulgation and By-law relating to Informal Trading. Provincial Gazette 6118 Friday, 26 March 2004

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permitted and states that the trader should be a valid permit holder. In addition, within the by-

laws of the municipality, Breede Valley articulated the need for a informal trading committee

consisting of two representatives of the informal trading sector, two representatives of the

formal trading sector, one representative of the local authority, a representative from the

Ratepayers Associations in the Breede Valley municipal area, a representative from any other

area falling outside the central business area and the main access roads to the central business

area (when aspects regarding such areas are considered) and co-opted advisors nominated by

the different sectors and accepted by the local authority or nominated by local authority. This

committee’s objective is to ensure that the rights of the informal traders as well as the public

are upheld in accordance with the relevant by-laws.

3.2 Drakenstein Municipality ContextIt does not appear that the Drakenstein Municipality has adopted such a representative

committee within its by-law, but within its Management Framework, it calls for a Traders

Association. The Traders Association would manage certain informal trading sites and be the

conduit for funding, managing and maintaining the sites as well as the collection of fees from

the traders. Therefore the Drakenstein municipality would be relieved of certain service

obligations in respect of the public places involved, although normal, basic, minimum services

that the Municipality is obliged to render in respect of public places would continue.

In the Drakenstein Municipality, a by-law regulating informal trading (BN 14/2007) currently

exists and although the law was promulgated under the old Paarl Municipality, by way of the

amalgamation of the four Municipalities, it is understood that the by-law applies to the whole

of the Drakenstein area, under jurisdiction of the municipality. It appears that the Drakenstein

Municipality’s informal trading management framework has been drafted from the City of

Cape Town’s Informal Trading Policy and Management Framework. Currently, informal

trading in the City of Cape Town is managed by a variety of different departments within the

different Administrations and includes Traffic, Business Areas Management, Legal Services

and Economic Development. Within the City of Cape Town Municipality, the by-laws

regulating to informal trading currently exist in three administrations: Cape Town, South

Peninsula and Tygerberg. All three by-laws are essentially the same, being guided by the

Businesses Act (No. 71 of 1991) and however each Administration has been using its own

system of managing Informal Trading which creates the challenge of establishing one system

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that will ensure uniformity and consistency throughout the City. It was envisaged that it would

be replaced by one City-wide by-law in terms of the Informal Trading Policy and Management

Framework5. It covers a wide spectrum of activities including the different types of informal

trading, the adoption of trading plans, economic development, flexibility regarding informal

trading, the development of criteria for an informal trading permit and various other matters.

Other issues addressed are the transferring of informal trading permits, special events,

enforcement of the by-law and addressing how to handle repeat offenders.

3.3 Regulatory Limitations to Informal TradersThe most relevant concern apparent for the trading activity in all the municipalities’ by-laws

appears to be the definition of nuisance which is defined by Breede Valley municipality

as….’any conduct which brings about or may bring about a state of affairs or condition which

constitutes a source of danger to a person or the property of others or which materially

interferes with their ordinary comfort, business convenience, peace or quiet’. In short, this

definition leaves it to the different parties to define what activities would interfere with their

peace or quiet. It appears that the Stellenbosch council takes the responsibility of determining

what defines a nuisance in Chapter 3.3 of its by-law relating to the prevention and suppression

of nuisances (PN 180). Chapter 3.3 specifically states that no person should carry on any trade,

business or profession on any erf in the municipal land that in the opinion of the Council may

be a source or become a source of discomfort or annoyance to the neighbourhood. In addition,

Section 21 of the Stellenbosch Municipality bylaw prohibits anyone from advertising wares

and services in any street or public place through the use of loud devices that would constitute

a public nuisance in the neighbourhood without prior consent of the Stellenbosch council6. In

addition, the size of the stall which should not greater than 3 metres in length and 2 metres in

width restricts the trader’s business activity or purpose. For instance, if the informal trader was

providing a service rather than selling products, the small size of the stall would be

problematic.

5 Ukukhula Business Solutions. 2003. An Informal Trading Policy and Management Framework. Adopted by the Mayoral Committee of the City of Cape Town on 18 February 2004.

6 Stellenbosch Transitional Local Council 1998. By-law relating to the prevention and suppression of nuisances. PN180. 3 April 1998.

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3.4 Witzenberg Context

It appears that the informal traders’ location of stalls are restricted with many of municipalities’

by-laws, although in some cases not unreasonably (no traders near the premises of churches

and mosques). Nonethless this lack of freedom to choose their locations near central points,

such as parks or in front of bigger businesses, may result in informal traders being unable to

attract sustaining business. For example, in Breede River municipality, although after

numerous attempts, was unable to access their by-law on informal trading, the review of other

bylaws have highlighted in Section 11. (1) of the Public Amenities by-law that no person shall

without the consent of the municipality conduct any trade, occupation or business near or on

public amenities7.

In the case of Witzenberg Municipality, before the amalgamation of the former municipalities

of Ceres, Wolsey, Tulbagh and Prince Alfred’s Hamlet, only Ceres and Tulbagh had

promulgated by-laws. It therefore became necessary to promulgate a new street trading by-law

(informal trading) for the new municipal area of Witzenberg. Overall, the conditions within the

municipality’s by-law is similar to the other municipalities, however the Witzenberg

municipality has specifically articulated conditions within its by-law to protect the public and

formal businesses. For instance, Chapter 3.7(a) that no trading should occur in a public road

adjacent to a building used for residential premises if the owner of the building has objected to

it and in Chapter 3.8 that no person shall trade on a verge adjacent to a formal business who as

one of his/her principle products sells good of the same or similar nature as the informal trader,

without the formal business owner’s consent8. In addition, Witzenberg municipality more so

than in any other of the municipalities’ by-laws firmly outlines in Chapter 6 the restrictions to

trading in terms of stands or areas, hours and goods. For instance the municipality only allows

the sale of flowers and newspapers at intersections, probably due to the speediness of service of

the traders in providing these goods which would not impact on traffic flow as opposed to other

products9.

This Witzenberg municipality also appears to have harsher penalties than the other municipalities as

offenders of the by-laws conditions may be liable for a fine, imprisonment of no more than 6 months or

7 Province of Western Cape. 2008. Breede River/Winelands Municipality: Public Amenities Bylaw. Provincial Gazette Extraordinary 6535. Tuesday, 24 June 2008

8 Witzenberg Municipality. 2003. Street Trading By-law. 16 August 2002. 9 Refer to Schedule B of Witzenberg Street Trading By-law.

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both, and should the offence continue, an additional imprisonment of 30 days may be prompted. The

amount of the fine penalty is not stated within the by-law, and appears to under the discretion of the

municipality. The Breede Valley clearly states the amount of the monetary fine (not to be in excess of

R1000), but considering that there are several key issues inhibiting the trader’s inability to follow

certain regulations, the impact of a fine of a R1000 with a fine of R50 for each day that the offence

continues may be financially crippling to such an informal trader. However it appears that the Breede

Valley Municipality within its by-laws articulates its sympathy towards the plight of insecure income of

the informal traders with regards to arrears in payment fro use of the stall as the informal trader are

granted three months to pay his/her hawker’s stall. Nonetheless it is made clear in the Memorandum of

Agreement that if the hawker does not comply with this rule, the municipality has the right to terminate

the contract and to relocate the hawker’s stand to another person on the waiting list.

3.5 Informal Trading Management FrameworkAccording to the City of Cape Town, the vision for informal trading are…"A well managed informal

trading sector that is fully integrated into the economic, spatial and social development objectives of

the City." and mission is…“Through a developmental approach, the City seeks to facilitate the access

to job and entrepreneurial opportunities within the informal trading sector and the nurturing of a

positive relationship with the formal business sector by providing a stable regulatory and flexible

management environment that is predictable, empowering and sustainable.”

The need for a management framework is due to concerns that if there is no official regulation and

control from municipalities that new sorts of informal control mechanisms may come in to fill the void

with their own means of controlling prices and protection rackets. The Drakenstein Municipality

Management Framework articulates the exact viewpoints of the City of Cape Town, by stating that

uncontrolled and unplanned growth of the Informal Trading sector has a negative impact and potential

conflict can arise between officials and traders as well as between traditional traders and “newcomers”,

because of uncertainty of each party’s rights. At present, it appears that the Drakenstein Municipality

have strongly inputted the recommendations of the City of Cape Town’s draft policy and management

framework into their own framework by emphasising the operational issues within their own context

such as criteria for allocating trading bays, criteria in allocating permits, outlining the permit process,

municipal’s management of trading sites, the tariff structure and the enforcement and monitoring of

adherence to the policies. In short, the Drakenstein Municipality excludes businesses that operate from

a brick and mortar premises from being eligible for a trading bay and illegal immigrants are also

ineligible for a permit to trade. In addition, the framework states that the number of informal traders can

not be of excess to the number of sites demarcated for informal trading in the Drakenstein area.

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Within the City of Cape Town, it was proposed that the management of Informal Trading ensures cross-

functional co-operation and involvement of different Departments, which would ultimately best be met

through the establishment of a Dedicated Unit. The same could therefore be recommended for the Cape

Winelands District Municipality with regards to effectively regulating the informal traders through

policies specifically targeted to this group as seen in the by-laws of the five municipalities, but also

through the establishment of a unit that oversees the management and reporting on those issues and

group.

4 Informal Sector Case StudiesThis section covers three case studies that look at the factors that define successful informal trading

businesses and how informal traders exist. In looking at the case studies we defined a relatively

successful informal business as a business that has existed for longer than 3 yr and/ or that have a staff

compliment of more than 5 people working in the business.

4.1 Business older than 3 years more than 10 workersStellenbosch Municipality

Name of company: J and D Sias

Owner: Davey Sias

Area of business: Franschoek

Type of Business: Spaza Shop and Painting

Indication of success: In business for more than 5 years and has a staff component of more than

10 workers and has an annual turnover of between R150 000 to R500 000.

The owner of J and D Sias is a middle-aged male who wife has been running the spaza shop for the last

10 years and he has been running the painting business for over 5 years. The owner started the two

businesses without any financial assistance from others and in turn has made a positive economic

growth contribution to the Western Cape. This has been done by consistently employing people from

the Franschoek community and buying stock from a regional supplier, especially the supplies needed

for the painting business. The owner was a local labourer working for others, who realised that instead

of being an employee, he could be an employer as he had the knowledge and experience to manage his

own business in that field. The owner therefore registered the spaza shop and painting business as one

company and at first the owner started small with his brother assisting him, but then realised that he

needed to advertise in the local newspapers to attract more business. Since advertising, the painting

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business has increased and now the owner does not only just provide labour, but is also a supplier of

materials required for those jobs.

The fact that the owner is involved in the spaza and painting business full-time is probably related to the

fact that there are similar businesses in the immediate area which places J and D Sias under enormous

competitive pressure, but nonetheless the business has managed to make a tidy profit each month.

According to the owner, the success of both businesses is due to acquiring more clients by providing the

best quality work and highest quality products. Therefore being professional at all times is the highest

priority of the owner. This philosophy is carried over to the business’ cash flow management which

does not make use of a financial accountant, but rather the owner re-invests 75% of the month’s profit

in the business and if there are any unforeseen expenses, this is debited from the business account. In

addition, the owner prefers not to have credit accounts with suppliers, but ensures that the paint

contracts that he takes on is within his cash flow budget and pays cash for the supplies as he does with

the spaza shop, leaving the owner without debt.

Unfortunately it seems that the owner does not see the businesses growing and this is probably due to

him not being familiar with or having used government incentives. This might also be due to not

receiving any support from the wider business community. In fact the owner claims when starting the

businesses that he and his wife started the businesses from scratch with their own savings and did not

rely on others. Therefore if the businesses should have problems, they realise that they have no back-

ups or anyone they can turn to for support.

However JD Sias is not going down without a fight and the owner believes that management and

employee training as well as co-operation with government and other businesses may keep the spaza

shop and painting business going for a long-time. In the owner’s own words,…’ if I could start from

scratch, I wouldn’t do anything differently, I believe that what I have today and what I will gain in the

future is due to my spirituality with God…

4.2 Business older than 5 yrs Witzenberg Municipality

Name of company: Complete Gallery

Owner of Business: Annelie Kruger

Area of business: Ceres

Type of Business: Gallery

Indication of success: In business for more than 5 years

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The female owner of Complete Gallery is an artist who started her business due to a need within the

Ceres community for showcasing locally produced art and crafts. Armed with a matric certificate and

with no business experience, she approached the bank for a small loan to start her gallery. At the start,

her main business was that of framing and showcasing her own art, but because she had enough space

and as her business became more locally known, the business evolved into her framing other artists’

paintings and then eventually into a gallery, showcasing other artists for a commission. Her business

also now includes buying art to showcase and re-sell them.

The owner credits the fact that her marriage to her ex-husband was something she relied on heavily in

terms of financial support as she did not necessarily require her own income, but could manage the

business in the start through trial and error. However since the divorce, she admits that it has not been

easy as she now has to use the business’ profits for her living expenses, but is confident in business’

success as her efficient bookkeeper and another fellow artist provide her with valuable advice. However

if she could start her business all over again, she would have preferred to have had the benefit of sound

advice from the start, for instance, advice on the pros and cons of moving business premises. For

instance, having a central location is great for attracting customers, but extremely exorbitant in rent as

she has experienced. Nonetheless, the owner believes that she would not have wanted to change the

business growth process as the business started with nothing and grew from there.

Although she struggles to make ends meet with an annual turnover of below R150 000, she believes

that since Ceres is continuously growing, so will her business. She credits the fact that she personally

deals with her clients and suppliers as well as the fellow artists that she showcases as the reason for the

success of her business. However she feels that her business is still very young and therefore at the

moment, the majority of the profit goes straight back into the business, with very little being used to

cover her personal expenses.

However credit should be given to the owner whose business has been around for just under ten years

and as far as she is concerned it will be around for another ten years. It also helps that there is no

competitors in her immediate business area. Although she admits that a lot of her business is as a result

of referrals from larger companies, she expresses a need for more cooperation between major players in

the industry. More specifically she believes that her business would benefit if government played a

more active role in developing tourism-related businesses.

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4.3 Business older than 5 years and turnover R 150’000 - R 500’000 per annum

Drakenstein Municipality

Name of company: African/ Tolonto Hair Salon

Owner of Business: Sylvester Bruku

Area of business: Mbekweni

Type of Business: Hair Salon

Indication of success: In business for more than 5 years and has an annual turnover of between

R150 000 to R500 000.

African/Tolonto Hair Salon is a growing business that doesn’t have a high staff component, but

continues to make a good profit. The secret to the business’ success according to the owner is that there

is in fact no secret and that it is all God’s will. He does admit though that the business started by the

community simply liking him enough to want to do business with him and being aware of his financial

need, they therefore encouraged him to start his own business.

The owner claims to not being aware of any government incentives but in turn has not had any

problems with government regulations, and claims that government does not influence the operations of

African Hair salon. However he does admit that the business could benefit from local government

support through the provision of financing and business training. At the moment the business manages

its cash flow by the owner allocating 30% to workers, 40% to his own personal account and 30% going

back to the business. He confidently indicates that he believes that this allocation system and the fact

that he is solely responsible for the finances works well for the business and therefore he does not

require any financial accountants.

Although there are four similar businesses in the area, the hair salon has continued to function

independently and the owner believes that the business will continue to grow due to more and

more customers being attracted to its’ efficient services. As a testimonial to this, the salon has

been operative for just under seven years even though the owner had no business experience

prior to starting the business. He however relied strongly on the business advice and moral

support that he received form his father and the community and claims that if he had to start all

over again, he would not change a thing as everything happens for a reason.

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5 Results

5.1 Section A- General Information

Figure 1: Position of the person completing the questionnaire

Figure 2: Gender split for survey participants

Respondents were split 50% male and 50% female.

n=248

Position of person interviewed

78%

20%2%

Owner

Employee

Unknown

n=247

Gender Split

49%51%GENDER MALE

GENDER FEMALE

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Figure 3: Age split for survey participants

Respondents were split almost evenly between 20-30 year olds (considered to be representative of the

youth), 35-50 year olds and over 50 year olds. If one cross seed this with the age of businesses then one

gets the sense that there has been a significant growth over the last thirty years in the informal business

sector.

Figure 4: Education levels for survey participants

The majority of respondents, 45%, attended high school but never attained a matric certificate. Only

34% of respondents had a matric or tertiary qualification.

n=245

Age Groups

37%

37%

26%

AGE GROUP 20 - 35 YR

AGE GROUP 35 - 50 YR

AGE GROUP >50 YR

n=242

Educational Level

21%

45%

23%

11%

Primary School

High School

Matric

Undergraduate

20

Undergraduate includes those respondents that went through the process but never completed the study

direction.

Figure 5: Types of legal entities

The overwhelming majority of respondents operated as sole proprietor, 75%.

Figure 6: Entrepreneurs’ level of involvement in the business

78% of respondents indicated that they were involved full time in their businesses. This factor will have

to be taken into consideration if training courses are considered as an intervention.

n=248

Type of Enterprise

75%

8%

13%4%

Sole

Partnership

Close Corporation

Company

n=246

Involvement in the Business

79%

21%

Full time

Part time

21

Figure 7: Extent to which entrepreneurs have had previous business experience

Most respondents never had any business training before entering into their business venture. This

confirms the finding that most 2nd economy businesses are survival businesses.

Figure 8: Size of business (in Rand value)

Only 3% of respondents enjoyed a turnover greater than R1 million per year, while the majority (86%)

reported an annual turnover of less than R150 000.

n=248

Previous Business Experience

31%

69%

YES

NO

n=243

Size of Business (Turnover)

86%

8% 3% 3%

< R150 000 P.Y

Between R150 000 & R500 000

Between R5000 00 & R1m

> R1 m

22

Figure 9: Size of businesses (by number of staff)

The majority respondents indicated that they employed less than five employees. Taking the size of the

businesses in terms of turnover and number of employees, then, according to the National Small

Business Act (Act No 102 of 1996), the majority of businesses interviewed can be classified as “micro”.

Figure 10: Age of business

Considering the fact that the vast majority of small businesses fail within the first five years after start-

up, it is surprising that so many respondents were in business for more than five years.

n=245

Size of Business (Staff)

88%

7% 4% 1%

Less than 5

Between 5 - 10

Between 10 - 20

Greater than 20

n=244

Age of Business

18%

25%

18%

23%

16%

Older than 10 yrs

5 - 10 yrs

3-5 yrs

1- 3 yrs

< 1 year

23

61% of enterprises are older than three years and as such can be regarded as established firms.10 This

reflects the general situation as reported n the Global Entrepreneurship Monitor (2004). GEM reports

that South Africa has a relatively high rate of start-up failures. Failure rates are obtained by determining

the ratio of start-up firms to new firms, which in South Africa amounts to 2.4 to 1 compared to an

average of 1.6 to 1 in developing countries (GEM, 2004).

Figure 11: Extent to which informal businesses are affiliated to business groups or franchises

The majority of businesses were independent. However, the fact that as much as 10% of businesses

interviewed formed part of a group is indicative of the modern trend towards franchising as a possible

answer to the lack of business skills which are prevalent among the owners of start-ups.

10 The Global Entrepreneurship Monitor (2004) distinguishes between start-ups (enterprises which have not paid wages for the last three months), new firms (those that are between three months and 3.5 years old) and established firms (those enterprises older than 3.5 years).

n=241

Business Independence

90%

10%

INDEPENDENT

GROUP

24

Figure 12: Types of informal businesses

n=25895

30

8 7 69

1813

62

40

24

0

10

20

30

40

50

60

70

80

90

100

1

Business Classification

Shop

Fruit & Veg

Shebeen

Barber

Hair Salon

Butchery

Repair Shop

Street Vendor

Construction

Health Services

Taxi

Other

25

Table 2: Average number of similar businesses per area per municipality

Municipality AreaSpaza Shop

Fruit & Veg Shebeen Barber

Hair Salon Butchery

Repair Shop

Street Vendor Construction

Health Services Taxi Other

                           Drakenstein Mbekweni 2 0 1 0 6 1 0 0 0 0 0 1  Wellington 6 3 3 0 0 0 0 0 0 0 0 1  Paarl 3 2 0 0 0 2 2 0 2 0 0 2  Gouda 0 1 0 0 0 0 0 0 0 0 0 0Stellenbosch Klapmuts 11 4 0 0 1 0 0 0 0 0 0 6  Pniel 10 1 0 1 0 0 0 0 0 0 2 0  Stellenbosch 0 2 0 3 0 0 20 0 0 0 3 0  Kayamandi 0 0 0 0 0 0 0 1 0 0 4 0  Franschoek 4 0 3 2 0 0 0 0 0 0 2 0Breede River Unknown area 9 10 0 2 1 0 0 2 0 0 3 2  Ashton 5 0 0 0 0 0 0 0 0 0 0 2  Touwsrivier 4 0 0 0 0 0 0 0 0 0 0 0  McGregor 4 15 0 0 0 0 0 0 0 0 0 0  Montague 17 0 0 0 0 0 3 0 0 0 0 0  Robertson 4 0 0 0 0 0 2 0 0 0 1 0Witzenberg Witzenberg 14 0 0 18 0 0 4 0 0 13 1 0  Unknown area 3 2 3 0 0 0 3 0 4 0 0 3Breede Valley Zwelentemba 4 3 2 0 0 0 0 3 0 0 0 0  Worcester 5 2 0 0 0 0 3 4 0 0 26 0  Rawsonville 6 0 0 0 0 0 3 0 0 0 0 0Total average of similar businesses 111 45 12 26 8 3 40 10 6 13 42 17

26

This question required respondents to identify the number of businesses, similar to their own, which

were also operating in the same region as they were conducting their line of business.

It was reasoned that respondents would be aware of their local opposition and that they could supply a

fairly accurate evaluation of the number of similar businesses in the local area. Although not a 100%

accurate, by averaging out the answers received from respondents and adding these figures to the

survey sample, we are able to provide a reasonably accurate estimation of the number of business

enterprises conducting business in the Cape Winelands Municipal area.

Table 3: Estimation of the extent of the informal sector

Spaza Shop

Fruit & Veg Shebeen Barber

Hair Salon Butchery

Repair Shop

Street Vendor Construction

Health Services Taxi Other

Survey

Sample

95 30 8 7 6 9 18 13 6 2 40 24

Respondent

Estimate111 45 12 26 8 3 40 10 6 13 42 17

Total 206 75 20 33 14 12 58 23 12 15 82 41

Figure 13: Sources of funding for informal businesses

Only 2% of respondents financed their business by means of a bank loan, while 84% of respondents

used their own capital to finance their business. This was to be expected considering the nature of

businesses operating in the 2nd or informal economy.

n=250

Source of Startup Finance

84%

2%6% 4% 4%

Own contribution

Bank loan

Gov incentive

Loan from friend / family

Other

27

5.2 Section B- Job Creation

Figure 14: Entrepreneurs current business confidents

n=244

Business Growth Expectation

68%

32%

Yes

No

28

Table 4: Reasons for Businesses Growth Expectation ResultsMunicipality Area If expecting growth, why? If not expecting growth, why?

Drakenstein           

Mbekweni   

Sales, due to customer satisfactionI don't know   

If I can get financeAmbition and dedicationSupport and service

Wellington 

Sales and support No support from the peopleSupport and visibility Lots of competition from foreigners

Paarl  

More clients   

Business is improvingIncreased number of clients

Gouda  

Advertising more   

Expand business to partnershipNew development

Stellenbosch                    

Klapmuts    

No competition in the area Finances too low to expandCustomers are increasing Foreigners making it toughReceived money to sell more products

Lots of competition  

More products will be made availableMore tourists are coming in

Pniel   

No competition Limited spaceExpanding Economy slow

 Close to main roadWill Market better Economy slow

Stellenbosch  

Register business, market business Economy slowNew, huge interest Reached peakSales are increasing Petrol Price, economy

Kayamandi   

Tourism corridor, increase in tourism    

More marketing doneGap in MarketNew designs and increase product range

Franschoek    

Not much competition, lots of new clients

No space to extend business    

Expanding the businessNo more competitionWill start working full-timeMore exposure & marketing

Breede River     

Unknown area    

Inflation and growth Business is showing a downward trend

It depends on the effort I put in  

Price increases are having a negative effectPersonal restrictionsLimited resources

Ashton Increase in sales Business is slowing down

29

  

With financial assistance Prices are too high Planning to manufacture more goods

Touwsrivier 

Lots of support from community CompetitionWider variety of goods Not sure of growth

McGregor  

More sales and variety of stock  

Not enough finances to expandToo many similar businessesPrices too high

Montague  

Planning to increase shop sizePrices too high  

Committed to businessWider variety of goods

Robertson  

A lot of business Not enough profitMore employment Competition, high prices and competition

 Bigger shops

Witzenberg          

Witzenberg      

Depends on availability of contracts

       

Employment opportunitiesGrowing Community needsSlot MachinesAdvertising, Marketing, Word of MouthWould like to expand businessTown expanding

Unknown area    

There will always be a need for the products Too many spaza shopsThere's a monthly growth rate in the business

Business is showing a downward spiral  

To deliver a better service to my clientsThe business will grow because of the growing requests in the industry

Breede Valley             

Zwelentemba  

More people know about the shop Too many similar businesses in the area

People cannot afford going to town to shop 

Limited spaceThe prices of goods are too high

Worcester        

Experience will help my business grow Prices of goods are too highIntends to expand variety of goods Too much pressure on cigarette industryNeed for this product Too weak financiallyToo expensive for customers to drive to the bigger stores More street vendors are starting upPositivity and good craftsmanship Financial crisis in countryPeople supporting well Other shops in proximityMore adverting, specials, etc

Limited resources  

Bigger premisesBecome more involved

Rawsonville 

  

Too little capitalPrices are too high

30

Figure 15: Breakdown of people employed in the informal sector

Figure 16: Employment in the informal sector 2007

n=538

Breakdown of Workers employed in 2008

62%

38%

FULL TIME

PART TIME

n=472

Breakdown of Workers employed in 2007

62%

38%

FULL TIME

PART TIME

31

Figure 17: expected growth for 2009

Figure 18: Employment trend

2007 saw an increase in numbers of both part time as well as full time employees. However, it would

seem as if the projected number of full time employees will be drastically reduced in 2009, in favor of

part time status which is expected to increase by 71% over that of 2008.

n=377

Breakdown of Workers Expected to be employed in 2009

7%

93%

FULL TIME

PART TIME

294333

25

178205

352

050

100150200250300350400

Full Time Part Time

Employment Growth Assessment

Workers employed in 2007

Workers employed in 2008

Workers to be employed in 2009

32

5.3 Section C- Government Incentives

Figure 19: Entrepreneurs’ knowledge of government incentives

The majority of respondents, 74%, indicated that they were not aware of Government Incentives that

were available to their industries.

Figure 20: Entrepreneurs’ source of knowledge regarding government incentives

Of those respondents who indicated that they were aware of Government Incentives, approximately a

third gained this knowledge from Banks, a third from the press and a third from the District

Municipality.

n=245

Awareness of Government Incentives

26%

74%

YES

NO

n=206

Source of Awareness of Government Incentives

29%

0%0%

33%

38%DIST MUN

BANKS

FINANCIAL ADVISOR

PRESS

OTHER

33

Figure 21: Historical use of government incentives

8% of respondents had made use of Government Incentives.

Table 5: Indication of government incentives used

Municipality AreaIf yes, what incentives or subsidies were made use of?

Drakenstein    

Mbekweni No incentives used Wellington No incentives used

PaarlBridging financeSubsidies and study support

Gouda No incentives used

Stellenbosch       

Klapmuts 

Umsobomvu Youth FundSeed funding

Pniel 

Seda/UIFRed Door

Stellenbosch No incentives usedKayamandi 

Grant in AidSeed funding

Franschoek Seda/Seed Funding

Breede River     

Unknown area No incentives used Ashton No incentives used Touwsrivier No incentives used McGregor No incentives used Montague No incentives used Robertson No incentives used

Witzenberg 

Witzenberg No incentives used Unknown area No incentives used

Breede Valley  

Zwelentemba No incentives used Worcester No incentives used Rawsonville No incentives used

Figure 22: response to local government regulations concerning the business environment.

n=241

Business Use of Government Incentives

8%

92%

YES

NO

34

6% of respondents indicated that they had experienced problems with local government regulations.

Table 6: indication of problems experienced with local government regulations

Municipality AreaIf yes, what incentives or subsidies were made use of?

Drakenstein   

Mbekweni No indication given

Wellington No indication given

Paarl No indication given

Gouda No indication given

Stellenbosch     

Klapmuts No indication given

Pniel 

Signage restricted

Rezoning problems not sorted out yet

Stellenbosch Permit issuing, increase in prices

Kayamandi Difficult to access funds

Franschoek No indication given

Breede River     

Unknown area No indication given

Ashton No indication given

Touwsrivier No indication given

McGregor No indication given

Montague Business too close to the road

Robertson No indication given

Witzenberg 

Witzenberg Problems obtaining a liquor license

Unknown area No indication given

Breede Valley  

Zwelentemba Problems obtaining a liquor license

Worcester By laws

Rawsonville No indication given

n=229

Problems with Local Government

6%

94%

YES

NO

35

5.4 Section D- Business Growth Factors

Figure 23: Location of suppliers doing business with informal businesses

The majority businesses bought their trade stock from local suppliers and regional suppliers. This is in

line with the expected buying patterns for this business segment.

Figure 24: Extent to which informal sector businesses experience problems buying stock.

n=260

Supplier Analysis

60%28%

10% 2%

LOCALLY

REGIONALLY

PROVINCIALLY

NATIONALLY

n=252Stock Purchase Problems

160

1811 9

25 22

0

20

40

60

80

100

120

140

160

180

NOPROBLEMS

EXTENSIONOF CREDIT

BULKDISCOUNTS

QUALITY OFGOODS

AVAILABILITY DELIVERY OFGOODS

36

Figure 25: Extent to which big business interacts/deals with informal businesses

Only 9% of businesses received referrals from big business on a regular basis, while 69% never

received any referrals from larger businesses.

Figure 26: Extent to which entrepreneurs would welcome government assistance with business development

n=241

Extent of Help from Big Business

5% 4%10%

12%

69%

ALWAYS

NEARLY ALWAYS

SOMETIMES

SELDOM

NEVER

n=238

Increased Government Involvement

87%

13%

YESNO

37

Table 7: indication of support to be received by local government

Municipality Area If yes, what incentives or subsidies were made use of?

Drakenstein        

Mbekweni 

Finance and trainingBusiness site and transportation.

Wellington  

Finance and trainingAdvertisement locally Business site

Paarl 

Supporting financeBusiness information, newsletters, database, website

Gouda 

Finance and trainingBusiness site

Stellenbosch                 

Klapmuts 

Finances, capital expenditure and assetsMake it easier to do business

Pniel   

Assist with signage and parking areaBusiness information, newsletters, database, websiteBuild market place, reduce permit priceControl of same types of business in the area

Stellenbosch    

Reduce daily stand price, more mobile toiletsIncrease tourism in Stellenbosch

Cover operating cost/subsidies. Reduce permit price.Finance and trainingAssist with signage

Kayamandi  

Upgrade business, help in marketing and supportFinances, capital expenditure and assetsTraining

Franschoek   

More support from Stellenbosch Municipality

Business information, newsletters, database, websiteInfo on incentives and financial aidFinance and training

Breede River             

Unknown area    

Upgrade business, help in marketing and supportThey should make land availableBusiness information, newsletters, database, websiteFinances, capital expenditure and assets

Ashton 

Finance and trainingUpgrade business, help in marketing and support

Touwsrivier 

Training, Finances, Youth DevelopmentUpgrade business, help in marketing and support

McGregor 

More projects aimed at individual entrepreneurs vs. groupsFinance and training

Montague Finance and training

Robertson  

Finance and training

Business information, newsletters, database, websiteUpgrade business, help in marketing and support

Witzenberg   

Witzenberg   

Local Municipality should be more visible & also lend supportAssist with signageFinances, capital expenditure and assetsUpgrade business, help in marketing and support

   

Unknown area   

Finances, capital expenditure and assets

They need to assist more with regulation and licensing

38

Local Municipality should be more visible & also lend supportTraining and marketing

Breede Valley      

Zwelentemba 

Finance and trainingMunicipality must help identify opportunities

Worcester  

Finances, capital expenditure and assetsTraining, specifically in tourism businessMunicipality must help identify opportunities

Rawsonville 

Finances, capital expenditure and assetsTraining

Table 8: Business growth factors

Factors ExtremelyImportant

Very Important

ReasonablyImportant

SomeImportance

Not Important

TotalN =

Access to cheap finance. 95 57 38 17 33 N = 240

Networking support from major players.

85 71 43 16 21 N = 236

Tax breaks. 115 57 33 11 22 N = 238

Identification by local government of opportunities.

132 52 33 7 12 N = 236

Management training. 143 56 18 12 15 N = 244

Employee training. 138 55 15 8 20 N = 236

Cooperation with other businesses. 115 50 33 14 22 N = 234

Figure 27: Entrepreneur ranking of business growth factors

ADDITIONAL COMMENTS:

Importance of Factors for Business Growth

95

57

38

17

33

85

71

43

16

21

115

57

33

11

22

132

52

33

7

12

143

56

18

12

15

138

55

15

8

20

115

50

33

14

22

0 100 200 300 400 500 600 700 800 900

1

2

3

4

5

Access to cheap finance. Networking support from major players.Tax breaks. Identification by local government of opportunities.Management training. Employee training.Cooperation with other businesses.

39

Table 9 Additional Comments on Fig. 27

Municipality Area  Additional Comments

Drakenstein         

Mbekweni    

To assess your business better

I wish that the authorities would make use of this information to provide us all with the necessary support in terms of money, staff training and development

We would like to receive finance and a proper place to do business

I would like to see the municipality becoming involved in developing the small business to see to it that they are empowered as young businesses.Require adequate security.

Wellington  

I hope that this study will act as a foundation for the municipality to have something to work from. Finance will then be made available; management training will be made available for us.

Municipality should provide us with more opportunities to grow our business and give me the material to build my business stronger.

Paarl No additional commentsGouda Reach out to and train small businesses

Stellenbosch          

Klapmuts  

Klapmuts is very divided. Initiative needs to be taken to bring the community togetherSupport and Training is importantMake people more aware of tourism in Klapmuts and the opportunity

Pniel Needs more parkingNeeds signage on road and the road is in a bad state

Stellenbosch Government must change daily charge to monthly

Kayamandi    

Need capital for operating costSmall business support workshopsMore involvement by municipality in small businessesWorking conditions is tough

Need speed bumps in front of the business as traffic is influencing the business. Owner has waited for more than a year.

Breede River        

Unknown area   

Need training in financial management

The local government can assist with the small business in the area to help create jobs and assist with funding.

It would be nice to have permanent premises, with the assistance of local government.

The local government can assist with the small business by educating them on business ethics; tax; etc

Ashton Land for animal farming; need more assistance from municipalitiesTouwsrivier Help from the GovernmentMcGregor No additional commentsMontague No additional commentsRobertson No additional comments

Witzenberg     

Witzenberg  

Survey is a good thing and hope it will be usedWould like people to make more use of taxis as primary useFunding & opportunities should be everybody

Unknown area   

I feel that small businesses are marginalized due to certain factors: tender process; lack of service; local government not transparent enoughNeed training in financial and business management and a site to run the business freelyNeed support and financial assistance.

The locals should be encouraged to make use of small businesses. The banks should be more accessible to the small business owner. Small business owners should be supported.

Breede Valley 

Zwelentemba No additional commentsWorcester There is no support from government

40

     

Flea market - need of stands with roofsFinance to grow business

Learnership does not equip learners but get qualifications. Government ignores older qualified craftsmanship. Assistance with workingNeed of access to motor financeNepotism needs to be eliminated. Bias toward black African business

Rawsonville No additional comments

6 Summary and RecommendationsSection A

Results of the survey show that the majority of business enterprises could be classified as

“Micro-Enterprises” and that most (70%) entrepreneurs interviewed had no prior business

experience. This points to the possibility of some sort of pre-establishment training or

information sheet which encourages entrepreneurship. Seda currently has an agreement in

place with the CWDM and should be included in the intervention to assist entrepreneurs.

Another possible intervention is the facilitation of an after-hours training program or even an

early morning training programme that targets those entrepreneurs who are quiet during the

morning trade.

Very little use is being made of outside capital for acquisition of assets and start-up capital. A

possible explanation for this is that entrepreneurs do not have adequate security or collateral to

apply for loans. In most instances one could infer that small businesses are started out of

necessity rather than by choice.

In this connection an intervention might be to act as a go-between to facilitate the raising of

working capital and unsecured loans for informal businesses.

Section B

Although the majority of businesses interviewed displayed a positive outlook regarding growth

prospects it is worth noting the reasons given by those respondents who were pessimistic about

growth prospects. The most prevalent reasons given by those respondents who displayed a

pessimistic viewpoint were:

The lack of finance to expand.

The lack of space available to facilitate any expansion.

41

High input costs.

Increased competition.

Although most respondents were of the opinion that 2009 would see an increase in job

opportunities, the general approach was to make “part-time “ appointments as apposed to “full-

time” or permanent appointments.

This implies a cautious approach on the part by employers which could be as a result of long-

term pessimism or the introduction of increased bureaucratic labor legislation regarding the

full-time appointment of staff.

Section C

Section C reflects a general lack of awareness of Government support programmes available to

entrepreneurs. This could be a possible reason for the fact that so little use is made of

Government support.

An alternative train of thought also says that the entrepreneurs are also so busy trying to save

money by not paying government levies and taxes, that the less these informal businesses

interact with government the less they are bound to be caught out. Most government incentive

schemes are subject to small businesses being registered with one or other organ of state.

Section D

Although businesses sourced most of their stock purchases locally, they experienced problems

of delivery, availability and credit facilities.

Not been able to solve these problems themselves, most small businesses look to Government

to become more involved and provide support in obtaining finance and business training.

Very few businesses received assistance from larger corporations.

The number one factor identified by respondents as necessary for future growth was

“management training”. This was followed by “identification by local government of

opportunities” and “employee training”.

42

Most of the before-mentioned problems could be solved by the establishment of decentralized

incubator facilities which would supply after-hour training and mentorship programs designed

to educate and better equip existing and potential entrepreneurs in the art of successfully

running a business.

Annual Surveys

While this survey served as a pilot study it has to be borne in mind that in order to better

respond to the needs of the informal sector that will enable it to grow there has to be better

interventions based on up to date reliable and relevant data that emanates from this sector. This

will only happen by repeating this survey on an annual basis, by refining what it is that is

needed to know about the sector.

43