Abstract:
The Construction Industry Development Board (cidb) register of contractors shows that small
and medium sized enterprises (SMEs) outnumber established firms in South Africa. However,
the failure rate of SME businesses, which has increased in recent years, constitutes a source of
concern in the industry. This situation is reflected in the limited number of successful
construction SMEs as a percentage of the total registered firms in the industry. The research
design for the study reported on entailed semi-structured and unstructured interviews, which
were conducted over an extensive period of time to gather sufficient information from the
research participants. However, the preliminary findings that form the nexus of this paper are
based on the reviewed literature, and a pilot study that was conducted among a purposive sample
of construction SMEs - Grades 1 to 5 on the cidb register. It is notable that the initial findings
suggest that construction SMEs often encounter difficulty in securing projects, fail to realise core
organisational objectives and goals, and are unable to gain cost advantages over their immediate
rivals, which affects their business performance. Thus it appears that more effort is required to
improve the business performance of construction SMEs in South Africa.
