By Miyelani Mkhabela
The COVID-19 crisis is disrupting supply and demand at the same time, with severe financial consequences. To not only survive the crisis but also rebound swiftly, companies must protect their liquidity position and focus on their core competencies and businesses
Leaders can better prepare for the next shock by observing lessons emerging from the current crisis. Shutting down was hard, but opening up is going to be harder. Your workers are always your most valuable asset and it’s not the best times to lose them during the crisis, as rebuilding your operations is going to be even more difficult, you want to maintain your ability to rehire your best workers when the world is open for business again.
Statistics South Africa reported that Four in ten businesses feel that they cannot continue to operate: When asked about financial resources, 42,2% of respondents indicated that they are not confident that they have the financial resources to continue operating through the COVID-19 outbreak and 54,0% of respondents indicated that they can survive without turnover between one to three months. The doors of Tourism & Hospitality; Sports; education, Retail; Entertainment are closed while manufacturing; Mining; Cargo and Logistics will also suffer in 2020.Small businesses based on their investments cannot manage the complexity of Covid19; large corporates are also struggling, yet risk can be minimized.
To set the scene, large numbers of small businesses have shut down and laid off huge numbers of workers; most are extremely cash strapped. The majority think they will be able to reopen by the end of 2020, but others are less certain. Small businesses disagree, a lot, about how long the crisis will last. Small businesses needs business continuity management, adaptation to technology and talent retention
It will be years before we fully comprehend the economic impact of the coronavirus, but one thing is painfully clear right now: Small businesses across South Africa and the rest of Africa markets are facing an existential threat. It will get a lot worse before it gets better for the African continent.
Here are a few tips for survival:
1. Carefully the prospective impacts of government plans to help small and medium enterprises (SME).
2. Help the business by deciding how to work with customers.
3. Regularly reassess credit worthiness: companies should continuously monitor the financial health of all but the safest customers.
4. Strictly monitor supply inventory through support functions to assess the cost of supplies and support functions that have access to a digital marketplace.
5. Recommendations to business on how to adjust the product offering. Companies should aim to deliver fast-selling products to priority customers for as long as possible, but they should also assess their product offering.
6. Investment and credit will be attractive
7. Adoption of an active operations management systems
8. Figure out how the needs of your customers needs have changed.
9. Don’t rush your decisions, but do make plans.
Finally, this is a time to be more client centred. Small businesses are highly required to meet customer expectations or satisfactory levels, while operating virtually has many disadvantages and misunderstandings, however, client’s service delivery standards still needs to be achieved. Generosity during a crisis can make a relationship far stronger. Small businesses are facing unprecedented struggles, and banks and policymakers must step up to help SME’s.
Miyelani Mkhabela is an Executive Director of Antswisa Transaction Advisory Services.