Legacy also starts with a ledger
What happens to a country’s future when most of its small businesses don’t survive long enough to grow?
According to a report by the Centre for Development and Enterprise one of the key characteristics of South Africa’s SMME sector is that it is dominated by ‘young’ firms. About 40 per cent of the sector are firms that have been operating for five years or fewer. Only 27 per cent are ‘mid-age’, having been in business for six to ten years, and 33 per cent are ‘mature,’ having been in business for more than ten years
Far too many small businesses don’t survive and when a business collapses, the consequences extend beyond a founder’s income; it unsettles households, disrupts local economies and chips away at the collective legacy the country is trying to build.
And with 1.77 million entrepreneurs running their businesses entirely on their own, precarity is a daily reality. Their vulnerability becomes a collective one, shaping not only personal prospects but the country’s ability to build continuity and economic inheritance.
The missing layer beneath the numbers
It is tempting to explain failure through financial metrics alone. But long before a ledger reveals strain, an entrepreneur’s internal world often tells the story first. Things such as their mental health and critical soft skills can be invisibly reflected in the numbers.
Running a business demands psychological endurance; anxiety and fatigue can make choices reactive and simple tasks feel insurmountable. All of which could an impact on how entrepreneurs approach their finances.
In addition, much of what influences financial outcomes sits outside traditional financial education. Things such as confidence can determine pricing of goods and services, communication can help with customer retention and emotional maturity can turn conflict into business wins. All of these can affect the bottom line in the entrepreneur’s ledger.
A broader understanding of what’s missing
While many successful entrepreneurs start with nothing more than an idea or a need the reality is that turning those great ideas into an operational business takes more than creativity, it demands financial know-how and the ability to manage money wisely.
“Many entrepreneurs know their product inside out but struggle to track income, manage debt, or forecast growth. They might invest in branding, equipment, or staff, but overlook the most critical tool - a ledger. Maybe not the physical kind, but the mindset it represents of discipline, clarity, and accountability,” said Nkosinathi Mahlangu Youth Employment Portfolio Head at Momentum Group.
However, financial discipline requires mental resilience and the right advice and tools.
Financial advice gives a solid plan
Without proper planning and financial literacy, inexperienced business owners risk a legacy not of business sustainability or financial security for themselves and their families, but of an over-indebted future.
The first step in financial planning is to identify goals - knowing what you’re working towards. These goals need to be mapped out into short-term and long-term, supported by realistic budgets. And when things change - the business grows, or experiences difficult times- your financial plan should be flexible enough to adapt without derailing your vision.
Said Mahlangu: “This is where finding the right partners including financial advisers and mentors to guide you on your entrepreneurial journey makes a difference.”
This is why the ledger is more than an accounting tool. It reflects the clarity, intention and consistency of the business and the entrepreneur themselves. It reveals what a founder prioritises, how they respond to uncertainty and whether they build from strategy or survival. It becomes the structural backbone of a business’s narrative: whether it reaches maturity or remains an unfinished chapter.
“A small business fails and succeeds at the intersection of financial literacy, behaviour and well-being,” said Mahlangu.
He added: “One of our flagship entrepreneurial programmes called Metropolitan Collective Shapers has responded very well to this need by designing a programme that builds capability in all three areas. The programme also helps entrepreneurs’ separate household and business finances, understand cash flow, build healthy habits and strengthen the emotional foundations of their decision-making.”
South Africa’s future rests on viable small businesses. When entrepreneurs gain the right financial tools and mindset, their ventures contribute to a shared national legacy.
“In a country where entrepreneurship is a powerful tool for transformation, but in which many small businesses never reach their full potential, small business owners need to be equipped with more than just passion. They need to build a team around them that can support them, including a financial expert. It is sound financial planning that builds legacies,” said Mahlangu.
