Very small enterprises are set to disappear from the South African lexicon.
Lindiwe Zulu, minister of small business development, is set to launch the revised definition of small enterprises in South Africa on Friday (30 November). She will also release the Annual Review of Small Enterprises and Co-operatives.
The schedule to the National Small Enterprise Act defining SMMEs was last revised in 2003; and small enterprises are defined in multiple ways across a variety of different departments and functions within government, resulting in many different understandings of what is a small enterprise in South Africa.
On 12 October, Zulu gazette a proposed schedule that will remove “very small enterprises” and set out new guidelines for defining small, medium and micro enterprises.
The document has been open for public comment, and new definitions will be launched.
The proposed changes will define small enterprises using two proxies instead of three. These will be total fulltime equivalent of paid employees, and total annual turnover, with total gross asset value removed.
The category of “very small enterprise” will be removed and subsumed into the category of “small enterprise “, as many users found this size or class category unhelpful and inconsistent with international practice.
The minister will also set new turnover and employment thresholds for these definitions.