While the lasting impact the COVID-19 has on the South African economy and the day-to-day life of our society is yet to be determined, its stinging effect on the operations of small businesses, following the introduction of the lockdown by President Cyril Ramaphosa, hasn’t gone unnoticed.
To encourage innovation of business’s processes and products’ for SMEs’ personal finance digital platform, The Balance, advises SMEs to:
✔ Build innovation into their periodical planning. This can be done by setting goals that focus on improving products and processes. If for an example one of your business goals is finding a new way to communicate with your customers, create an innovation action plan to implement your innovation goals.
✔ Actively solicit suggestions for improvement by:
– Using both formal and informal methods to get customers to make suggestions for innovation, such as questionnaires, surveys, and casual one-on-one conversations.
– Talking to their suppliers and stakeholders to see what suggestions for improvement they might have.
Erin Louw, Chief Brand Officer at Retail Capital believes the ability to retain forward motion can be the sole differentiator between the drivers and survivors, adding that the “objective remains to take control”.
Below, Louw shares with NOWinSA her top tips for small businesses to survive these challenging times:
✔ Keep calm and carry on
In all high-risk situations it is essential to remain soberly calm for fear leads to panic leaving chaos in its wake. Today, we are already experiencing the effect of a global crisis. It is important, however, to also remain realistic and to take note of the facts.
– In a matter of days and weeks, each business will feel the effects on their trade.
– In a matter of months we’ll be dealing with the aftermath, and what that will look like, entirely depends on how well we plan.
✔ Plan today for a better tomorrow
It is key for business owners to have a detailed plan for each scenario, in order to optimise efforts and maximise results by taking a ‘III’ stage approach as Unpacked below:
Firstly, consider what is fact vs fear. Facts backed up by numbers can enable any business owner to create projections and timelines based on the information that is available within the parameters of his own business. It is important to understand how this will affect working capital and cash flow, employees and customers.
Having the information available allows you to investigate best practice or case studies of how to handle similar situations allowing you to formulate a plan of action. Also identify the triggers and thresholds which will initiate each contingency plan and the definitions or categories for knowing whether it is successful and when to initiate the next stage.
Having a plan shifts the balance of scale from reactive to proactive and instills a sense of security with all stakeholders involved. Any business continuity plan involves a policy which will include the principles for precaution and response and will include guidelines for resource and operational management. Once the policies and procedures are defined it is critical to formulate the following plans: continuous communication; social distancing and remote work; and recovery. Every business should plan as if they are soon to join the StayingHomeClub.
Situations such as these provide an opportunity for innovation. Whether it is a new supplier chain for those in the services, construction or manufacturing sectors, delivery options for businesses operating in restaurants or retail or virtual engagements for events and networking, being creative in your approach to running your business is key.
Make no mistake, COVID-19 has the world in a state of panic, but the data shows that the earlier precautionary measures are activated, the lower the impact on the health and economic system. We find ourselves in a black swan event and no one truly knows how this will play out and how long it will take.
Due to the unpredictable nature of the situation and the severity of the potential consequences, business leaders need to put themselves in the driver seat and with the benefit of hindsight, this will be the moment they went from a victim to victor. We have the opportunity and the responsibility to prevent this.
Other interventions and financial/debt relief resources for SMEs
Meanwhile the government and the private sector have made funding or payment relief available to help business owners navigate through this tough time, including the R500 million will be made available through the Debt Relief Fund. Small and medium enterprises that are in distress can apply by visiting https://smmesa.gov.za/.
SMEs can visit SME South Africa for more information on available funds’ including the R200 million available to assist the tourism and hospitality sector, R150 million relief to arts and culture practitioners and R1.2 billion package for agriculture.
The Southern African Venture Capital and Private Equity Association (SAVCA) has launched a strong membership network support platform for small businesses and enterprises, which consist of professionals who manage over R175bn in assets.
Tanya van Lill, SAVCA CEO, said the platform is geared towards assisting SMMEs gain access to industry professionals for free advice on managing a variety of challenges they may face in the wake of COVID-19.
“We have called on our members to donate hours from staff who have capacity and specialist skills that companies may need, such as legal, accounting, supply chain and industry specific skills, to name a few.”
In addition to announcing a monthly R10, 000 relief fund to youth-owned enterprises for a period of three months, NYDA said Richen Attorneys Inc has mad plans to contribute to the turnaround of the economy once the pandemic is over.
To assist they are offering free legal due diligence to SMME’s which includes the following
- Compliance status on CIPC;
- Due Diligence on Incorporation Documents, should the SMME not have the requisite MOI, we will draft one ex gratia
- Review of 1 commercial contract; qualifying criteria
- SMME must be operational for a minimum of 2 years
- Must have a minimum of 2 employees
- Must have a company registration number
- Must have a minimum of 1-year financials (need not be audited)
- Promotion is valid until May 7, 2020.