How SMEs can safeguard their business in uncertain times

It was feared from the start of the COVID-19 pandemic and lockdown that small and medium sized businesses (SMEs) and entrepreneurs would likely take a huge financial knock. As the backbone of the South African economy and as a key source of employment, this impact would be felt in all sectors of society.

This is according to Ernest Zamisa, Financial Planner at Momentum, who highlights a March 2020 survey* predicting that more than 55 000 SMEs would not survive the COVID-19 pandemic; with at least 423 500 employees working for these companies likely to lose their jobs.

And while the pandemic did have the devastating effect that was anticipated, Zamisa highlights that the silver lining is that this past year has tested the mettle of businesses, and some have not only survived, but gone on to thrive.

He highlights ‘Trove Wellness’, one of the winners of last year’s Momentum Budget Speech competition, as an example of a small business that tackled the challenges presented by the pandemic head-on, through spotting an opportunity to adapt its offering to meet the needs of its customers.

Founded by South African fitness fanatic, Juanita Khumalo in 2019, Trove Wellness is dedicated to helping others achieve holistic wellness. With last year’s unexpected lockdown, Khumalo realised she needed to adopt new ways to keep her clientele moving.

She says, “There is a dire need in 2020, more especially, to take care of oneself. I saw this need to encourage women to move more at home, and that is how I turned my love for fitness and wellness into a profitable business.”

So, how do SMEs build this resilience into their business, which will enable them to survive these challenging times? Zamisa shares his tips below.

Know your risks

Yes, we might not have seen Coronavirus coming, however, with a little planning, you can safeguard your business against some of the most common scenarios that could jeopardise your ability to make money.

Take a little time to do an assessment of your potential vulnerabilities. Ask yourself, “What are the things that could possibly go wrong that will impact my business? What will happen if I am not there? Do I have a business continuation plan? Do I have insurance so that my business can continue in the event that anything should happen to me?

“It is important to ensure that you are covered against possible accidents or unforeseen circumstances, Zamisa says. “If you are unsure of what these risks are, chat to a qualified financial adviser.”

Take your customers feedback onboard

Your customers’ satisfaction is a good indication of the future of your business. Which means if your customers give you feedback - even if negative or difficult to accept - listen.

“If you get feedback from your customers or other suppliers, do not brush it off. It might just be the input that you need to grow your business to the next level.”

Support other small businesses

Where possible, support others in the same boat as you. “As an owner of a business, you can decide where you want to spend your money. Before supporting huge international corporations, why not consider getting your products or services from a local entrepreneur or SME? This is good business karma, and you can be sure that these business owners will notice your support, and return the kindness.

Zamisa adds, “You can also support other small businesses by paying them in the shortest possible time, to assist with their cashflow.”

Advice for success

“Don’t be afraid to ask for help. Ask other people what their recipes for success are. Ask a financial adviser to guide you. Tap into your network, community and the resources at your disposal; these are the tools that will help you on your journey to success, and to weather future storms,” he concludes.

ENDS

*Survey by 22 On Sloane