Almost one third of South African small businesses surveyed for the 2026 State of the SMME in South Africa report have been operating for more than 20 years, yet many remain small employers, highlighting the challenge of turning survival into sustainable growth.
The report, published by the Shoprite Group and based on research conducted by World Wide Worx among 800 South African small, medium and micro enterprises (SMMEs), found that 32.1% of respondents have been operating for more than two decades.
Yet businesses employing between one and five people remain the largest company size category, accounting for 39.1% of those surveyed.
The findings point to a persistent challenge for South Africa’s small business sector. Businesses are surviving for years, and in some cases decades, but are not consistently developing into larger employers.
There are, however, signs of growing confidence. Some 42% of respondents described their businesses as growing and expanding, up from 33% in the 2025 survey, while 85% expect moderate to high growth over the year ahead.
More than half of the businesses surveyed, at 53.6%, reported net profit after tax above 10%.
“These findings are encouraging, particularly given the difficult operating environment SMMEs have navigated. The challenge now is to help businesses convert that resilience into sustainable growth and greater economic impact,” said Maude Modise, Enterprise and Government Relations Executive at the Shoprite Group.
Modise added that SMMEs have operated through one of the most difficult business periods in the country’s democratic history.
"Years of loadshedding, weak economic growth, rising interest rates, inflationary pressure, logistics bottlenecks and deteriorating municipal services forced many businesses to focus on survival rather than expansion. Against that backdrop, the improvement seen in the 2026 findings is more significant than it first appears. Businesses are emerging from an extended period of economic disruption with renewed confidence, even if many remain constrained in their ability to scale," Modise said.
Access to customers remains a hurdle
Market access emerged as the most commonly cited requirement for growth, with 56.9% of respondents identifying it as a priority. This was followed by financial support at 39.5% and digital tools and platforms at 29.7%.
The importance of access to established customers was even clearer when respondents were asked about support from large corporations.
Some 78.1% rated regular orders as important or very important, putting predictable demand ahead of mentorship, grants, training, technical skills and loans.
“An order from a large customer can create a significant opportunity, but a small business also needs the working capital and capacity to deliver on it. Market access, appropriate finance and practical business support need to work together if we want to help more SMMEs scale,” said Arthur Goldstuck, CEO of World Wide Worx.
The findings place procurement and access to established supply chains at the centre of the debate around helping small businesses expand.
Funding gap persists
Capital remains another significant constraint.
Although 70.8% of respondents said improved access to funding would increase their competitiveness, 90.9% currently rely on their own resources and personal networks.
Only 9.7% use bank loans, while 57.4% have never applied for funding.
Private investment is also largely untapped. Just 2.1% of surveyed businesses currently use private investors, but 46.2% said it is a funding mechanism they would like to access.
The report identifies working capital, market opportunities, business systems and procurement opportunities as key areas that could help established SMMEs move into their next stage of growth.
The Shoprite Group aimsto address some of these challenges through Shoprite Next Capital, which focuses on empowering and growing local, commercially viable small businesses.
The initiative combines access to the Group’s retail market with working capital and practical support covering areas such as product development, training, data insights and growth planning.
In 2026, Shoprite Next Capital invested R30 million in enterprise and supplier development and onboarded 13 new suppliers, taking the number of supported SMMEs to 84. These businesses contributed 469 locally produced products to the retail market.
A further R10.7 billion in working capital was provided to 120 suppliers.
The impact of this support is reflected in businesses including Gauteng fresh produce supplier Urban Grown and technology solutions provider OTB Group.
Urban Grown grew by approximately 45% over four years and now employs 34 people after expanding its relationship with the Shoprite Group.
OTB Group, meanwhile, grew from six permanent employees to supporting approximately 50 roles, helped by milestone-based funding from Shoprite Next Capital and a long-term contract to develop the Shoprite Group’s digital recruitment platform.
“SMME development is about more than funding. Corporates can help create the conditions for growth by opening supply chains, creating predictable demand and helping small businesses build the financial and operational capacity to respond to those opportunities,” said Modise.
For South Africa’s established SMMEs, the findings suggest that surviving the early years is only part of the challenge. The next step is creating the conditions that allow businesses to turn longevity and resilience into scale, employment and greater economic impact.
ashley.lechman@nationalmg.co.za