As South Africa celebrates Heritage Month, the focus is on preserving and building legacies, not only for the country's history but also for its small and medium-sized businesses. The emphasis is on creating enterprises that can outlive their founders and become part of the country's heritage. This requires a shift in focus from merely starting new businesses to ensuring their longevity and sustainability.
The significance of this conversation is underscored by the scale of South Africa's small and medium-sized enterprise (SME) economy, which comprises approximately 2.67-million businesses. These enterprises account for a substantial share of employment and economic activity in the country. However, research indicates that a considerable number of SME owners are nearing retirement age, making succession planning a pressing concern.
A study commissioned by the Shoprite Group from World Wide Worx in 2025 found that over a third of SME owners surveyed were between 45 and 54 years old, while nearly a quarter were between 55 and 64. This highlights the need for entrepreneurs to begin thinking about succession planning and legacy building while their businesses are still growing. It starts with documenting the business's story, including its values, mission, and history.
The knowledge and expertise that make a business successful often reside with the founder, making it essential to capture and formalize this institutional knowledge. This can be achieved by documenting history, formalizing relationships and processes, and protecting intellectual property. By doing so, businesses can develop leaders who can operate independently of the founder, ensuring the company's continued success.
A critical distinction exists between building a successful company and creating one that can thrive without its founder. The former requires entrepreneurial drive, while the latter demands institutional thinking. South Africa needs both to foster a robust and sustainable economy. When businesses survive, the economic value, knowledge, and opportunities they have accumulated can continue to grow.
This allows the next entrepreneur to build upon existing foundations rather than starting from scratch. Therefore, it is crucial for SMEs to prioritize their brand heritage as deliberately as they manage their balance sheet. By doing so, they can create brands that belong to the business rather than one individual. This may involve asking uncomfortable questions about ownership and leadership transitions earlier than expected.
Furthermore, the definition of economic transformation in South Africa should be broadened to include not only the number of people entering entrepreneurship but also the number of businesses that survive and thrive over time. With approximately 90% of small businesses estimated to fail within their first 10 years, longevity is an economic achievement in its own right.
Key points
- South Africa's small businesses are urged to plan for their legacy to ensure their survival and contribution to the economy beyond their founders.
- The country's 2.67-million SMEs account for a significant share of employment and economic activity, but many owners are nearing retirement age.
- Prioritizing brand heritage and succession planning can help businesses outlive their founders and create a lasting impact on the economy.
