Impact of Crime on Small Businesses Report 2008 - Gauteng Online

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THE IMPACT OF CRIME ON SMALL BUSINESSESTable 8: Probability <strong>of</strong> firm experiencing an incident <strong>of</strong> crimeTurnover per year Mean MedianR1 million 1.91 1.50Total 1.36 1.00The results suggest that for the sample as a whole, the average probability <strong>of</strong> experiencinga crime is 1.36. The probability <strong>of</strong> being exposed to crime is U-shaped -very small firms and larger firms within the sample have higher probabilities <strong>of</strong>being victims <strong>of</strong> crime.Chart 29 shows the mean probability that an entrepreneur or small firm will experiencea crime in one year (a value <strong>of</strong> 1 means that it is a statistical certainty that theaverage firm will experience a crime). As Chart 29 shows, the smallest entrepreneursin our sample will experience an average <strong>of</strong> 1.4 crimes in a year. Firms in thelargest size bands experience well over 1 crime per year on average, with firmsturning over just under R1 million experiencing a mean <strong>of</strong> 3 crimes a year. Thechart suggests that the risks <strong>of</strong> crime are highest for the most vulnerable small entrepreneursand for companies that are just on the verge <strong>of</strong> entering the ‘first economy.’<strong>Crime</strong> therefore seems to hit the poorest and the most successful entrepreneurshardest – a particularly unfortunate pattern for growth and development.44
THE IMPACT OF CRIME ON SMALL BUSINESSESChart 29:Mean probability <strong>of</strong> experiencing a crime in a year (by meanturnover)3.532.521.510.50R1mThe likely impact <strong>of</strong> crime on firms is the probability <strong>of</strong> a firm being affected bycrime multiplied by the costs <strong>of</strong> crime to the firm if it is affected. This is <strong>of</strong>tencalled the ‘expected cost.’ The expected costs <strong>of</strong> crime are presented in Table 9below. Columns 2 and 3 present the probability <strong>of</strong> being a victim <strong>of</strong> crime multipliedby the average cost <strong>of</strong> the crime incident (column 2) and the median cost(column 3). Columns 4 and 5 present these as a proportion <strong>of</strong> turnover. 20 Columns6 and 7 present the actual costs <strong>of</strong> a crime incident as a proportion <strong>of</strong> turnover butdo not take into account the probability <strong>of</strong> a crime affecting the firm. The medianvalues are influenced less by crimes with high costs and are thus more reflective <strong>of</strong>the ‘typical’ firm.45
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Impact of Crime on Small Businesses Report 2008 - Gauteng Online

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