The world and business as we know it, is changing dramatically. One certain thing however is that we have entered unchartered waters and only innovative and adaptable businesses will survive. Reality is that Small Medium and Micro Enterprises (SMMEs) are the ones at the highest risk amidst the Covid-19 pandemic, despite the government’s effort to lessen the impact through the various stimulus packages and measures being implemented.
With an estimated 120 000 spaza shops and businesses operating in the informal sector, townships will have the most casualties because these businesses are vulnerable to external shocks. Unlike the businesses in the formal sector, a large majority don’t have reserves, nor the resources needed to navigate through this pandemic. To add more salt to the wound unemployment will also increase as companies retrench employees to survive.
According to investor, tech entrepreneur, founder and managing director of the Pan-African Investment and Technology Company, Cryptovecs Capital, Mr John Lombela, COVID- 19 has created an unprecedented situation and every entrepreneur regardless of the industry they operate in, is negatively impacted because the economy came to an abrupt standstill.
However, South Africa is slowing easing the regulations in order to restart the economy, but this isn’t a quick fix as many will still need to measure its impact before they can be fully operational.
“Businesses are scrambling to adapt but it’s not all doom and gloom. The pandemic has created numerous opportunities and forced businesses to address their weak points and reevaluate their stance on remote working and changing the way they do business. It’s also shone the spotlight on cracks and forced others to either pull up their socks or go back to the drawing board.”
Mr Lombela says that crises are cyclical, and there will be another pandemic in the future. “However, accelerated this may seem, entrepreneurs need to learn how to be agile and not stagnate. They need to be able to pivot quickly and embrace new realities and be able to offer new services and or products as demand changes. Innovative entrepreneurs are those who are quick at identifying new opportunities during a crisis. As much as businesses are leaning towards business relief funds and the smaller players looking towards the bigger player to assist.”
He adds that smaller players can’t expect the bigger player to assist – case in point being the recent rescue of Edcon – they are also rolling with the blows as some are facing bankruptcy, while others are at a total standstill like the events industry and large corporations with a global presence that have requested immediate payment relief from numerous entities offering business relief funds and payment holidays as well as facing laying off employees.
“What businesses need to do both large and small, is to renegotiate all of their financial engagements with all of their stake holders across boards. With regards to employees, businesses need to arrange for extra credit facilities, relaxing their tax obligations and other instruments to allow them to pay employees and remain afloat for at least the next three months.”
Now more than ever before traditional brick and mortar businesses are on a brink of total collapse because keeping staff at offices no longer makes sense.
Decision makers are being forced to revisit and remodel working at the office or away from the office to save costs and use resources more efficiently.
The upside of this pandemic is that businesses are now seeing the value of embracing technology and implementing policies that benefit and protect both the organisation
and employees working remotely.
The real lesson though is that businesses need to unlearn and relearn in order to remain relevant in today’s economy. “We will see an introduction of new ways of working while embracing technology and relying on internet-based technology. Most businesses that rely on internet today can function remotely. Everything that requires mass gathering can be handled remotely or through video conferencing to reduce costs and improve on resources efficiencies. But of course, face-to-face meetings will remain an essential part of our lives for new relationships buildings, etc.”
COVID-19 has also changed the way we interact with each other as wearing masks can become a new norm in business meetings. Businesses, especially those in the informal sector need to rotate, pivot, and innovate. Constantly learn new skills. Stay connected online, not to read about the COVID-19 but to learn about new skills that will make you a subject matter expert post the crisis and during the crisis.
Entrepreneurs who seize the opportunity can see an increase in their revenues if they implement their business models well leveraging the digital infrastructure, thus stimulating the digital economy somehow. During every crisis there are always opportunities on the other side of the crisis. Businesses need to review their internal policies and figure out how they can leverage tools and technology at their disposal to transform how they currently do businesses. Most of those that rely on face-to-face interactions can leverage technology today to realize how that can improve their business during a crisis like this pandemic. Experiment new things, introduce new services, monitor and adjust.
The buzz words are Internet! Technology! Social media! Digital wallet for digital banking transactions! Zoom conferencing or similar tools to be connected. COVID-19 has made the business world realise that electricity, internet and internet-related tools are an important commodity.
Businesses need to implement processes that can improve on collecting data smartly for further processes because data collected can help significantly in creating new business models that can be used in the medical, insurance, telco and even banking sector.
Here are a few tips to help entrepreneurs remain afloat and learn and grow:
- Review your business model (traditional brick and mortar or internet based?). If traditional business, provide an internet-based offering adaptable to some or all your products or services, and if internet based, increase your online presence by leveraging on existing online tools to be more engaging with your audience and finding new buyers, while bringing back loyal buyers.
- Learn about new technologies and acquire new skills. Learn everything about digital marketing and internet customer reach for building a loyal customer digital footprint.
- Target and retarget customers based on their needs as you go about learning what they need allowing you to adjust your offerings accordingly.
It might seem as though there is no end in sight but together, we will get through it. It will not be the way we are used to, but a new normal is what we will have to become accustomed to.