LESSONS LEARNT IN THE PANDEMIC ARE KEY TO SME’S SURVIVAL
South African small and medium-sized enterprises (SME’s) are the engine-room of our economy and the country cannot afford this to collapse because millions of livelihoods depend on them. For many small business owners, medium- and long-term planning is not a part of their business strategy, but it is time to realise that the steps taken today will determine whether they survive into 2022 or not.
“There is a rich abundance of knowledge, skills and expertise in our SME sector-all of which has played an essential role in the SME’s survival and ability to adapt during the pandemic. Part of this is that we have had to move away from a ‘business as usual’ approach and realise the need to learn from the lessons that the past year has taught us in order to plan and prepare for the future.” says Trevor Gosling, CEO of small business service provider Lulalend.
The government’s financial assistance to the SME sector will need to be supplemented with decisive action taken within the SME landscape, he adds.
“The R1.4bn relief package is not enough to save a sector that contributes an estimated R1.5trillion to the economy. Yes, the financial aid is welcomed but it is crucial that the SME’s take action to ensure that they are able to recover from the economic hardship that the last year has dealt them” says Gosling.
To do this , it will require business owners to critically evaluate what did or did not work over the last 12 months. “While there is renewed optimism, now that the first vaccines have been administered, it is not the time for SME’s to slow down and wait for recovery.” says Gosling.
“Are there better, cheaper and more efficient ways of delivering your service, and are there unnecessary overheads that you can cut? These are the things that business owners need to think about when mapping out their plans to survive and grow over the next two years,” he explains.
During the year ahead, time will need to to be taken to revisit business plans and develop long-term strategies, to not just survive but to thrive. Many of the actions taken in the time of crisis can be beneficial for a business in the long run.
While most companies have been moving online in the past few years, the pandemic has shifted this into overdrive. He says there is no turning back. “People have now gotten used to living in a digital world.”
But, going digital does not necessarily mean that developing an e-commerce offering is the only way that this can be done. “Digital technology can help to automate and streamline other aspects of the business, including stock control, financial management, and payment facilities,” he added that they must ensure that they have effectively managed their cash flow. As part of the planning, it is essential that time is taken to analyse what can be done to manage financial constraints in the year ahead. In addition to this, access to capital to invest in growing or pivoting the business will be crucial.
“It is important that SME’s talk to their credit providers about access to funding, including a revolving credit facility to help manage their cash flow,” explains Gosling.
“Survival is dependent on shifting business strategies and plans, as well as leaning on partnerships with service providers, stakeholders and customers. The year ahead will be a bumpy one , but with the right support it will be possible to come out the other side in a much stronger position,” says Gosling.
ARTICLE PROVIDED BY LULALEND AND FIRST APPEARED ON THE SMALL BUSINESS SITE.