Financial Performance Measures and Business Objectives Attainment in Fast Food SMMEs in the Cape Metropolis: A preliminary Liability and Suitability Analysis

Abstract

According to the Small Business Act No. 102 of 1996, Small Medium and Micro Enterprises (SMMEs)

The risk management practices in the manufacturing SMEs in Cape Town

“…Despite the significant contribution of SMEs in South Africa, the failure rate of these businesses within their first year of existence is very high (Fatoki & Smit, 2011). There has been a slight improvement in recent times; however, 75% of South African SMEs have had to close their doors after operating for an average of 42 months (Fatoki, 2012;Ngary, Smit, Bruwer, & Ukpere, 2014). Comparing the views of the authors mentioned above, it is evident that SMEs have significant sustainability issues that require attention from academics and practitioners to find amicable solutions that may lead to the growth and sustainability of SMEs.…”

“…56 percent of the respondents don't budget. This is a major concern when one considers that the failure rate of these businesses within their first three years of existence is very high (Fatoki & Smit, 2011;Fatoki, 2012;Ngary et al, 2014). This could affect normal operations and profitability of business.…”

Do Internal Control Activities Adversely Influence the Profitability and Solvency of South African SMMEs?

“…Small, Medium and Micro Enterprises (SMMEs) play an important socio-economic role in both developed economies and developing economies around the globe, mainly by means of assisting with the distribution of wealth, the eradication of poverty and the decreasing of unemployment (Hill, 2001) (Wren & Storey, 2002) (Chepurenko, 2010). In a South African dispensation these business entities are believed to add approximately 57% 1 to the national Gross Domestic Product while providing employment opportunities to at least 61% of the national workforce (Naidoo & Urban, 2010) (Swart, 2011) (Ngary, Smit, Bruwer, & Ukpere, 2014). Albeit the socio-economic value which South African SMMEs add to the national economy, prior research (Fatoki & Odeyemi, 2010) (Cant & Wiid, 2013) (Moloi, 2013) suggests that 75% of these business entities fail after being in existence for less than four years -a statistic believed to be among the worst in the world (Fatoki, 2014).…”

Inventory Management Systems used by Manufacturing Small Medium and Micro Enterprises in Cape Town

“…When emphasis is placed on South African SMMEs, it is clear that they do not necessarily possess the relevant resources (Ngary, et al, 2014) to make use of formal inventory management systems like their larger counterparts. These limitations include a lack of initiative, a lack of expertise as well as financial limitations (Narayanapillai, 2010).…”

“…For the sake of clarity the criteria for manufacturing SMMEs are collaborated in Table 1 below: In the latter Act, the main objective imposed on South African SMMEs is to spur economic growth; mainly through means of creating jobs and alleviating poverty. To put the latter in perspective Ngary, et al (2014) aver that South African SMMEs are responsible for absorbing approximately 80% of the national labour force while Swart (2011) adds that SMMEs are believed to contribution up to 30% to the national Gross Domestic Product (GDP). This view is substantiated by Kongolo (2010) who points to the fact that these entities account for 91% of all business entities operating in South Africa.…”