Small-business support often starts with the obvious constraints: access to finance, customers, technology and markets.
Those problems are real. But they can also encourage a view of business performance in which the organisation is treated separately from the person running it. Give an entrepreneur capital, teach them the mechanics of finance and marketing, and better performance should follow.
New South African research suggests the management equation is considerably broader.
Researchers from the University of South Africa examined small- and medium-sized enterprises in Johannesburg and found that stronger financial performance was associated not with one dominant managerial capability, but with a combination of knowledge, skills, values, attitude and experience. Perhaps more importantly, the researchers found no statistically significant differences between the overall scores of these five dimensions. t changes the management question.
The issue may be less about finding the single skill that separates successful SME owners from everyone else, and more about building a sufficiently complete management capability around the business.
Looking beyond technical competence
Published in the South African Journal of Business Management, the research by Shenice B.S. Kemp and Johan Marx surveyed 120 SME owners and managers operating in Johannesburg.
Participants rated a range of competencies using five-point scales, while the researchers used factor analysis to identify relationships between these capabilities and self-reported return on investment. They also developed a Business Success Driver Index to assess how the different competency dimensions contributed to business performance. resulting picture was not dominated by accounting knowledge, leadership ability or strategic planning alone.
Instead, the five dimensions worked together.
Knowledge concerns what the manager understands. Skills determine whether that knowledge can be applied. Experience provides judgement accumulated through previous decisions. Attitude influences how problems and uncertainty are approached, while values affect behaviour, relationships and the way decisions are made.
For a small company, those distinctions matter because management is concentrated.
Large organisations can distribute expertise across finance teams, operations managers, human-resources departments and specialist advisers. In an SME, several of those responsibilities may ultimately converge on one owner or a very small management team.
A weakness in one area can therefore spread quickly through the organisation.
What business owners themselves identified
The study’s open-ended responses make this broader definition of management capability more tangible.
Owners and managers pointed to financial health, customer focus, employee satisfaction, strategic planning and execution, adaptability, innovation, brand and market position, access to capital and reputation as contributors to business success.
Asked about the competencies required to manage successfully, they identified issues including cash-flow management, customer loyalty, strategic vision, time management, employee development, networking, adaptability, leadership and company culture. se are not isolated management functions.
Poor cash-flow management limits the ability to invest. Weak customer relationships affect revenue. Limited strategic foresight can result in capital being deployed in the wrong direction. Poor leadership can weaken employee development and execution.
The commercial consequence is that management capability behaves less like a checklist and more like a system.
The training problem for South African SMEs
This is where the research becomes particularly relevant for organisations involved in SME development.
The authors argue that business training and coaching should extend beyond management knowledge alone. They specifically identify strategic foresight, communication, decision-making and leadership alongside values including integrity, service and openness to change, as well as persistence and long-term commitment. t does not mean technical training is unimportant.
It means teaching an entrepreneur how to calculate margins or construct a marketing plan addresses only part of the management problem.
For banks, incubators, universities, development agencies and corporate enterprise-development programmes, the finding raises a more demanding question: are SME interventions transferring information, or developing managers?
The distinction could influence how support programmes are designed.
A programme built around workshops may successfully increase knowledge. Developing judgement, adaptability, leadership and decision-making capability is likely to require something different, potentially mentoring, repeated application, feedback and experience over time.
That is an editorial inference from the study rather than something the researchers directly tested, but it follows from the wider competency model their results support.
Source Information
Study Title: Competencies of small- and medium-sized enterprises’ owners and managers as drivers of the financial performance of small- and medium-sized enterprises in Johannesburg
Authors: Shenice B.S. Kemp and Johan Marx
Journal: South African Journal of Business Management
Volume: 57(1), Article a5348
Published: 8 May 2026
Study type: Peer-reviewed original research
DOI: 10.4102/sajbm.v57i1.5348 Read the published study
