GroFin Founder and MD Mr Jurie Willemse recently researched the failure rate of SME’s and shares his thoughts on the matter :

“Out of the 14 sources investigated, the number of SME failures by year 5 vary between 50% and 95%. Using the standard statistical method of not taking into account the two outliers then the average failure rate quoted by the 12 sources come to an average of 71% of all SMEs being out of business by year 5, which reiterates the high failure rate of SMEs.”

“Out of 14 sources we investigated, eight ascribed the key reason for failure to quality of management and six ascribed it to a lack of access to finance. In all cases the 14 either ascribed it to either reasons of not accessing enough or correct financing or quality of management decisions.”

“This supports GroFin’s value proposition of not only making financing available but also adding value before and during the finance period.”

“In none of the cases did the SMEs plan to fail….but in most cases they failed to plan and this leads to a high failure rate. Planning - making sure of viability of entrepreneur and business and identifying risks, risk mitigation plans and correct financing need - is critical if you are to increase the success rate of an SME. It is here where GroFin’s value add really lies.”

“We increase the SME’s ability to succeed by addressing the two key causes of failure, being access to finance and access to management support – the value of not being part of the 71% statistic if you do business with GroFin.”