David Against Goliath: Predicting The Survival Of Formal Small Businesses In Soweto

Abstract

The aim of the paper is to determine empirically through quantitative research the key characteristics for survival of formal small businesses in the Soweto Township area. The focus was on the formal small businesses that have been operating in a very dynamic business environment with the introduction of modern shopping facilities during this period. Binary logistic regression was used to develop two regression models to predict the survival of formal small businesses based on the key characteristics identified in the literature study. The results indicate survival similarities between formal and informal small businesses regarding longevity of the business, better qualifications of owners/managers, greater maturity of owners/managers and being further away from the new shopping malls. Even with the drastic changes in the business environment of formal small businesses in Soweto, there were a group of small businesses that were able to survive and grow. Information regarding this group of small businesses can be of value to owners and investors in their future consideration of venturing and funding new small businesses in the township areas of South Africa.