The challenges of transition from a small information technology organisation to a medium sized enterprise

MBA thesisSME‟s play a key role in the creation of employment in South Africa and to a larger extent, economic growth of the country. However, as SMEs transition from small to medium sized enterprises, they experience numerous challenges. This paper reports on the findings of an investigation into the internal and external business challenges faced by SMEs in South Africa as they make this transition into medium sized enterprises. This was a qualitative study with data collected through structured interviews. Respondents were asked a series of open-ended questions and these responses were analysed, interpreted and discussed in the content. The findings indicate that when SMEs grow, the transition is not smooth and not all SMEs experience the same challenges: some may be unique to the type of industry or the circumstances under which the company was formed as well as factors such as access to finance, management, etc. There is no single or best way to overcome these challenges. SMEs should seek creative solutions to their challenges which will allow them to succeed and grow. Proactively addressing challenges can also prove to have long-term benefits for the company. This paper also provides some relevant recommendations to SME owners to overcome some of the constraints they might experience as they grow