THE BLOG
11/12/2017 15:08 SAST | Updated 11/12/2017 15:08 SAST

Small Business Owners, Fasten Your Seat Belts For A Bumpy Ride Ahead

Research reveals that when a country is stable politically, it tends to do extremely well economically as well.

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Politics has somehow wormed itself into our daily lives. Nowadays, everyone has an opinion on the political climate and all other related debacles.

Research reveals that when a country is stable politically, it tends to do extremely well economically as well. South Africa is a great example of this observation. In the past decade, the South African Rand has been at its strongest.

In 1999, during the second democratic election, the rand's value was at an average of R6.11 (ZAR) to the Dollar (USD $). That was when the people of South Africa had more confidence in the government that had rescued them from the dark pits of apartheid.

A series of unfortunate and sometimes deliberately intentional events by the government and its authoritarians have made the rand much weaker and it continues to be more vulnerable due to this.

If high ranking politicians and government officials are implicated in corruption, money laundering and a host of other illicit financing crimes, the economy weakens due to uncertainty in the future of the country. If this affects the mainstream economy (i.e. big corporations) imagine what it can do to small business and ventures.

To all small business owners, fasten your seat belts for it is surely going to be a bumpy ride ahead.

Small business owners are somehow at the bottom of the food chain economically but are just as significant as the large corporations in driving important factors like reducing unemployment and increasing job creation.

When the economy slacks due to political uncertainty, the growth of these businesses slows down rapidly.

Some businesses have even shut down due to the slow and tiny profit margins thus making it hard for them to stay afloat. When large and multinational corporations like General Motors (GM) pack up and leave, know that something terrible is about to happen.

Unlike small businesses, large corporations have structures to foresee the future and the growth of their businesses in relation to the country's economy. In small businesses, it's just speculative.

With the country now officially in junk status and after having recently plunged in and out of recession, the growth of the economy is set to slow down even further.

To all small business owners, fasten your seat belts for it is surely going to be a bumpy ride ahead. A political revolution is taking place and its results will reflect on the South African economy either positively or negatively.