Running a business in South Africa requires more than ambition, with many SMEs still being held back by avoidable mistakes in cash flow management, financial discipline, digital adoption and long-term planning.
This is according to Umesh Madhav, provincial head of business banking coverage in Gauteng at Standard Bank South Africa, who says resilience is built through clarity, planning and strong business networks rather than chasing trends.
He says one of the most common problems is that entrepreneurs overcomplicate their business instead of actually focusing on the core money-making activity. Businesses that understand their main source of income are generally in a better position to remain disciplined and make good decisions.
Cash flow remains another major pressure point, especially for cash-heavy businesses like retailers, salons, taverns and fast-food outlets. Madhav says businesses need to plan inflows and outflows carefully, manage cash safely and avoid keeping large amounts of money on site.
He also warned that many entrepreneurs still blur the line between personal and business finances, making it hard to properly measure performance and build a sustainable operation. He says the use of dedicated business accounts, tools and reporting systems is also important for small businesses.
Digital tools can also help small companies work more efficiently, improve record-keeping, and build financial track records. Madhav says digital payments reduce administrative burden and create traceable transaction histories that can support funding applications and business growth.
At the same time, he notes that cash still plays a major role in the South African economy, especially for township businesses, spaza shops, salons, eateries and seasonal traders. For these businesses, it is essential to balance cash and digital payments, use proper cash-management processes, and keep track of every transaction.
Madhav says relationships with banks, suppliers and business partners should be built before problems arise, not during a crisis. Strong networks can help businesses manage pressures and unlock opportunities that might otherwise be out of reach.
He describes formalization as an important step for small and informal businesses. Standard Bank's Township Informal Economy Report, published in October 2025, found that nearly 80% of township businesses are unregistered, which can limit access to funding, supplier contracts, e-commerce opportunities and long-term sustainability.
Beyond day-to-day operations, Madhav says SMEs should prepare early for the busy trading period by collecting invoices, meeting obligations and, where necessary, renegotiating supplier terms. He encourages businesses to look at growth opportunities beyond South Africa, including regional trade and export markets opened up through frameworks such as the African Continental Free Trade Area.
He says the businesses most likely to survive are those that focus on stability, healthy cash flow, reliable systems and strong customer relationships rather than short-term hype.
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