In my first column in this series, I delivered the bad news that 80% of all SME start-ups in this country fail. But what about the surviving 20%?
Towards the end of last year, stats in a report entitled: 'Small Business, Big Opportunity' showed confidence in South African SMEs was 10% higher than the global average. Moreover, most of these enterprises expected employee numbers and revenue to increase.
For many SMEs in this country, their problem is not that they don't get it, but they can't sell it. What does that mean? If you are an SME owner who made it through the 80% closure rate in the first five years and spent the last 15 to 20 years building the business and in doing so, overcame the challenges specific to being an SME in this country, you will get it immediately − you know how to run the business successfully. What you don't know is what to do to make it saleable one day.
There's no single silver bullet to achieve this, but rather a collage − technology, the investment in it and what is done with it will be pivotal to success in making the organisation an attractive purchase proposition that oozes sustainability to potential investors.
A managed service provider with a business approach to the organisation can deliver the level of support required.
There are some facts with which South African SME owners need to familiarise themselves and the first one is that in an Interpol 2022 report, South Africa emerged as the hub for cyber crime in Africa, with a total of 230 million threats detected. We are the leader on the continent in terms of the number of cyber security threats identified.
On the global front, SA ranks third in terms of the number of victims affected by cyber crime. Small to medium businesses in this country are cited to be at the forefront of this battle.
This emphasises the requirement for cyber security measures, but challenges for SMEs include lack of resources and expertise. A managed service provider (MSP) with a business approach to the organisation can deliver the level of support required.
What I mean by this is an MSP that takes the time to understand the company, the challenges in its sector and sets out to solve the business problem. What is not needed is an MSP trying to convince you to buy a pink plug to stick into a blue socket.
Cyber security is a business issue, not a technical one and yes, tech is an enabler, but only in as far as the right tech, deployed appropriately and managed with skill, will address the business problems.
Cyber crime is constantly evolving, hence cyber security measures must be reviewed constantly to remain one step ahead of the bad guys. Do SME business owners have time to do that? I doubt it.
The attack surface today is vastly expanded, and methods of attack are increasingly sophisticated and not to be underestimated. For example, in distributed denial-of-service attacks, cyber criminals don't have to infect systems in order to wreak havoc.
Today, they use tactics such as flooding a website or server with requests aimed at overwhelming it and forcing it offline. These attacks are designed to permit access to a company's computer system or simply to find vulnerabilities that can be exploited later.
Forbes notes MSPs offer modern identity management alternatives that meet today's security challenges, from the device to the network level.
MSPs can offer remote employee onboarding using security software embedded on devices to ensure in-place protection from the first time an employee logs in. They can set up systems that centralise identity to lessen the potential for staff to fall for phishing e-mails. They can monitor access across the entire system and detect anomalies or threats for quick remediation. They can also provide advice on ongoing staff education and training programmes.
What has all of this to do with selling your successful SME some time in the future? The answer is − everything.
Firstly, a well-run organisation, operationally successful due to the specialist advice and state of the art technology supporting it, will be a far more attractive proposition for buyers.
Also remember that should you be the target of a breach due to inadequate cyber security measures, the consequences for the reputation and saleability of the business will be dire. Even worse, if, due to negligence, customer data is stolen, the SME will not only carry legal liability for fines but the breach of trust in the market will damage growth prospects.
A managed service offering with a highly-skilled MSP can provide the highest level of protection against today's sophisticated threats to even the smallest firms. SMEs can look to the in-house expertise and support of an MSP − let's face it, the success of the service provider's business is totally interwoven with that of its customer.
MSPs offer SMEs the prospect of a good night's sleep, safe in the knowledge their business is secure and in the hands of experts, allowing them to get on with the job of running their company.
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