*6.1.3 Barriers and challenges contributing to the stagnant business growth of SMMEs*

The third question in the survey was, 'what are the barriers and challenges contributing to the stagnant business growth of SMMEs?' A summary of the challenges that impact effective operations and business growth experienced by SMMEs is depicted in **Figure 7** below. These identified challenges have been categorised into four aspects: marketing and competitiveness, skills and opportunities, finances and proper infrastructure. The survey results show that non-certified organisations are more negatively affected by these challenges than their counterparts. About challenges relating to marketing and competitiveness, only 35% of the respondents in certified organisations are affected, whilst 65% of them confirmed to have no market accessibility issues.

Most respondents in non-certified organisations are faced with challenges relating to proper infrastructure, finances, marketing and competitiveness. These very crucial challenges are to be surmounted by all organisations in pursuit of accreditation acquisition. Due to financial constraints, non-certified organisations cannot compete globally, hence placing them in a disadvantageous position. Competitive advantage denotes the relative higher position in the market that leads a firm to surpass its rivals in terms of revenues ([7], p. 3). Standards have also been essential to get recognition from demanding regional and global retailers Gerundino [39]. Based on the survey results and the assertions by Gerundino and Mohamed, it can be concluded that global competitiveness is one of the benefits that certified organisations have as a result of their consistent level of quality and therefore their ability to penetrate larger markets, which is essential for business expansion and sustainability.

### *6.1.4 Knowledge of relevant industry regulatory and statutory requirements*

The fourth question in the survey probed participants to indicate whether they knew relevant industry regulatory and statutory requirements of quality standards

**Figure 7.**

*Represents a comparison between challenges facing certified and non-certified organisations.*

*The Impact of Quality Standards on the Business Performance of Small, Medium… DOI: http://dx.doi.org/10.5772/intechopen.101366*

**Figure 8.**

*Represents the level of agreement on the knowledge of relevant industry regulatory and statutory requirements.*

or not. This question used a Likert scale with five options to choose from, ranging from Strongly Agree to Disagree Strongly. The questions were designed to respond to the level of awareness on industry regulatory requirements and red tape barriers associated with noncompliance. **Figure 8** above is a graphic representation of the responses from both certified and non-certified respondents about the knowledge of relevant regulatory and statutory requirements that govern their industries.

The application of standards supports good regulatory practices and efficient implementation of public policies Gerundino [39]. Research results revealed that 90% of the respondents of the certified organisations are very much aware of their industry regulatory and statutory requirements compared with 60% of the respondents of the non-certified organisations. Similarly, certified organisations are less affected by the red tape associated with noncompliance than non-certified organisations. If adequately applied, standards positively impact the economy as they support creativity and innovation, thus enhancing more opportunities for new product development and R&D. According to Muringani ([40], 111), the intended outcomes of innovation in small firms are either enhanced business or operational performance or both. In the former, the production of goods, services and profitability are primary, and in the latter, the overall desirable combined outcome is cost reduction and customer satisfaction. The impact of noncompliance to standards and lack of good regulatory practices contribute to the sub-standard performance of SMMEs.

#### **7. Policy implications**

The study has observed that the majority of SMMEs in the informal economy are trading food without a valid certificate of acceptability, which serves as a minimum requirement as stipulated under Regulation 638 (2018:8). The S.A.'s Food Safety Regulation R638 of 2018 Section 3(1)(a) (2018:8) provides for regulation and compliance of how the Food Safety Regulation must apply. However, the government needs to go back to the drawing board and identify the gaps in policy implementation. It is a priority for the government to invite all stakeholders to submit policy changes regarding the compliance of SMMEs in adopting and practising quality management. Any shift in government policy decisions regarding quality management will implicate the cost of educating and training SMMEs on the new provisions for compliance with quality management requirements. Some entrepreneurs are already struggling to sustain their businesses. It is a challenge for them to expand their operations and functions to accommodate a quality management system.

To receive quality compliance certificates, SMMEs must train staff to perform better and get valid certificates of acceptability, they sometimes do not have these certificates. The SMMEs are challenged since they do not have compliance all the time. Affected parties must develop strategies that can address the noncompliance of SMMEs in quality assurance and management. Most respondents in noncertified organisations are faced with challenges relating to proper infrastructure, finances, marketing and competitiveness. The SMMEs will need money to address their challenges of accreditation acquisition by upgrading infrastructure and finances, marketing and competitiveness. These very crucial challenges are to be surmounted by all organisations pursuing accreditation acquisition. Managers will have to align their operational units with TQM.

Managers can draft internal quality policies to drive compliance in the organisations. Having a quality management policy can alleviate risk and uncertainty during the implementation of operational principles and practices. The use of quality practitioners can be used to support non-quality management functions. The use of a structured and predetermined implementation plan can be an added advantage, especially if it is shared across all units of SMME. This can imply the company is supporting to benefit employee involvement and effective policies.
