By Jeremy Lang
THE PAST two years have been among the most challenging for South African small and medium-sized enterprises (SMEs) across the country. Many faced a maelstrom of obstacles in the form of the ongoing Covid-19 pandemic, a record-setting petrol price hike, load shedding and the civil unrest in Gauteng and KwaZulu-Natal.
Heading into 2022, South African small businesses will be called upon again to “suit up and show up” if they wish to thrive in an evolving economic landscape.
Over the course of the past two years we have seen small businesses demonstrate several amazing feats of courage, remaining resilient through the toughest of times. For a successful 2022, we encourage SMEs across all sectors to learn from 2020 and 2021, by making sure that they are as prepared as possible for the unexpected.
Here are three tips for small businesses as they prepare themselves for the year ahead:
1) Tighten up your tech
According to the Business Partners Limited Q3 2021 SME Confidence Index, only 43 percent of South African small businesses felt that they had the digital tools and measures in place to keep their businesses going when the pandemic hit.
At least 25 percent of SMEs said they were not ready to meet the sudden need for digital competency that was required when teams started working remotely. A further 32 percent responded that Covid-19 was the wake-up call they needed to embrace digitisation in the workplace.
What the results of the Index have demonstrated is that the majority of SMEs do not yet have the infrastructure and digital proficiency to adapt to the changing environment. However, the tide of digitisation is gaining traction, so my advice to small business owners is to conduct a technology audit, including aspects like security software, the use of cloud technology and available hardware.
Ask yourself whether your business has the digital capabilities it needs to reach your target audience using the right means and mediums. Then take into account costs like printing, insurance, data and telephone, etc. and consider which costs can be reduced through innovation or negotiation.
2) Prioritise your budget
The SME Confidence Index revealed that the top three challenges South African SMEs predict they will face over the course of the next six months are: cash flow, economic conditions and funding. Ironically, all these challenges relate back to the financial position of a small business and are poignant reminders of the importance of budgeting.
Lang emphasises that budgets need to perform two key functions – to plan and to project. As such, budgets should make provision for as many hidden costs as possible. These include membership fees for networking, and industry bodies, license fees, insurance, vendor fees for credit card payments, shrinkage (if yours is a product-based business), office sanitising and cleaning supplies and stationery.
If anything, what we have learnt from the past two years is that it’s impossible to predict the future. It is, however, vital for small businesses to include some wiggle room in their budgets for the unforeseen. Events like national crises and natural disasters need to be planned for so that if and when these events occur, your business does not take a knock that will bring it to its knees in the long-term.
3) Brush up on your human resources skills
The importance of good employee relations has come to the fore over the past two years. Across sectors, employees reported feeling burnt out, stressed out and disillusioned about their futures. Where previously the health and mental wellbeing of employees was an aspect assigned to the domestic realm, it has now become part of the responsibility of employers – to demonstrate empathy and instil a culture of mutual respect and support within the workplace.
Across the world, we’re seeing the effects of the ‘mass exodus’, where people are resigning from their jobs in pursuit of companies and brands that resonate with their personal values and goals. SMEs will have to invest in becoming more human-centric, so that they can retain talent in this competitive environment.
*Jeremy Lang is the executive director at Business Partners Limited.
*The views expressed here are not necessarily those of IOL or of title sites.
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