With a record high unemployment rate of 43.2% recorded in the first quarter of 2021, and lockdown destroying 42.7% of small businesses in South Africa, it is a clear signal that the backbone of our country’s frail economy is weakening.
Now is the time for small business owners to look at how they can recover and rebuild in new ways for a post-pandemic business environment, in order to retain employment and set course for growth.
Small business globally is seen as the engine of job creation, but South Africa lags behind, with a high failure rate of SMMEs meaning we are still far short of the National Development Plan (NDP) target of small businesses creating up to 10 million new jobs by 2030.
The short-term outlook for small businesses most definitely varies depending on the industry, with some industries closed for the foreseeable future, however there are many that can still recover and consider action plans to rebuild their businesses.
Seraj Toefy, Custodian of Entrepreneurship at the University of Stellenbosch Business School (USB), says that amidst the uncertainty of not knowing how long the recovery will take, it’s imperative for SMMEs to reconsider and reimagine their business models.
Embrace the changes
If your business is still yet to boom again, there is no doubt you need to make some serious changes to survive. What you don’t want to do is bounce back to pre-Covid routines. Rather embrace the changes and create a new norm.
Go back to basics and relook your business model – interrogate why you did things in a certain way, and whether you could do things differently. Most businesses grow organically with very little time spent on critical assessment. Investigate the changed consumer behaviour landscape and ask yourself how relevant your business still is, how can you adapt your service or product, attract a completely new consumer group, or use your skill set to start an entirely new business.
Side-hustles are very often overlooked as potentially fledging full-time businesses. If you started a side-hustle to keep things afloat, consider whether this could not steer your business into a new direction either as an addition to or a completely separate business.
Reassessing your staff complement is essential in reimagining a business. Consider how you can adapt job descriptions to keep overheads lower, upskill your star employees in taking on new responsibilities or diversify their tasks. By investing in your staff and making them part of your growth, they will be, in many cases, the reason for long-term, sustainable, success.
Isolation is the death of many small businesses. By collaborating you can potentially grow faster. Share expenses, resources, leads and staff, even if only as a temporary measure.
For too long, we have viewed competition in a binary way. I win, you lose. We need to move past that and realise that the real competition at the moment is lockdown and a struggling economy. If forming collaborative partnerships with your immediate competition is too much of a stretch, then look to see how you can collaborate with suppliers and complementary products or services.
Rising tides raise all boats, and working together makes that easier.
Set yourself reasonable milestones for your growth. It will be tempting to think that you will be able to bounce back to pre-pandemic growth figures, but expecting that could be frustrating. Reset your targets, set mini milestones that will keep you moving forward and motivated. Build a runway of at least 6 to 12 months until you can safely be looking at pre-Covid levels.
Brand awareness is your way of letting your consumers, customers and suppliers know that you are either back in business, have expanded your business or at the very least, that you are still around.
Strengthen or re-establish the bond by communicating regularly and excite them with your offering. Clean-up your database and use email and social media to advertise your offering or share new developments in your business. Re-skin your website and ensure it visually portrays a sense of dynamism. And never underestimate the power of a phone call. A short call to your suppliers could result in new, better ways of working together.
Seraj Toefy, Custodian of Entrepreneurship at the University of Stellenbosch Business School (USB).