Small Business Survival in the Times of COVID-19

COVID-19: A Global Pandemic

Quarantine, isolation, social distancing, disruption, uncertainty. These are just a few words associated with our current milieu. The COVID-19 virus’ exponential spread from Wuhan, China to the rest of the world has caught governments, organisations and businesses unawares. A lack of preparedness coupled with instances of early-stage apathy has led to a global moment where countries are forced to shut their borders, people are forced to distance themselves from one another, and businesses are left to think of ways to survive in the wake of changes in consumer behaviour.

In South Africa, President Cyril Ramaphosa has shown decisive action. He wasted no time in implementing radical measures that include: an outright ban on visitors from high-risk countries like the US, UK, China, Italy and Germany, the closure of schools, the closure of 37 of SA’s 72 ports of entry, and a prohibition on gatherings of over 100 people.

While these measures are far more extensive than those imposed by some other countries during similar phases of the outbreak, such as the UK and Italy, COVID-19 cases continue to rise daily. With a 116 confirmed cases of COVID-19 on 18 March, up from 61 on 17 March, South Africans will all play an important role in flattening out this upward curve. At this stage of the game it is imperative to minimise social interaction and remain vigilant in our support of the national health system. If we are lucky we will contain the spread of this virus, but where does that leave small businesses?

If the United States is anything to go by, micro and small businesses need to get ready for the worst. A recent survey in hard-hit Seattle found that 60% of small businesses were already considering wage cuts and staffing cutbacks, while 35% said they would probably need to close. Although the South African government has mentioned the establishment of a fiscal programme, the next 90 days will be critical for businesses as cash-flow grinds to a halt and supply chains, especially those from China, remain destabilised.

As the coronavirus spreads, many small business owners will need to rethink their strategies and adjust the way they work. So what should small businesses owners focus on in the coming months? Business mogul, leadership maverick and venture capitalist Vusi Thembekwayo has offered his advice for businesses to get through the next 90 days. Here is what he calls the five C’s.

The Five C’s of Small Business Survival

1. Cash

Cash is king and during this period small businesses are going to have to worry about conserving cash. In the words of Thembekwayo, “worry about the contracts you have signed, and collecting on these contracts. Worry about the invoices that you’ve issued and collecting on those invoices.” In other words, make sure you collect on all the cash owed to you by your customers in order to weather the storm over the next 90 days.

2. Customer

Focus on getting close to your customers. Identify your top customers and tighten your bonds. Even though you may be forced to maintain a social distance of 1.5 metres, visit them in person and find out what is important to them, what problems they are facing, and establish how you are positioned to help them.

3. Credit

As the next 90 days will largely see small businesses fending for themselves, Thembekwayo suggests getting adequate lines of credit. By this he means securing a short-term lending facility or overdraft from your bank. This will be something to tide you over for the next 90 days in terms of cash flow and current liabilities.

4. Colleagues

In the workplace, it is vital that you communicate with your colleagues, your team and your support staff. As a leader, you need to help calm nerves and steer the ship. Firstly, inform them of the implications of the virus and how to curb it in the workplace in order to manage expectations and fears. Listen to questions or fears that your colleagues may bring to the fore and suggest solutions. For example, if congested public transport is an issue, try looking at remote working or flexible hours. Maintain a fluid approach to the current disruption and allow for innovation.

5. Communication

Finally, Thembekwayo stresses the importance of getting ahead of the communication curve by speaking to your external stakeholders: customers, potential customers, suppliers, clients, social media followers, etc. Establish communication early, speak frankly, and ensure everyone is on the same page.

Teamwork Makes the Dream Work

It is difficult to say what the next 90 days may hold for South Africa in general and small businesses in particular. If you look at the rest of the world, greater controls over movement and the closure of more public spaces will be inevitable. However, if we all work hard together, we can at least try to minimise the impact. To all South Africans, we hope that everyone is acting responsibly by changing their habits and putting adequate measures in place. To all businesses in Technopark, please keep supporting our local service providers, even if it is by buying a gift card for a shave or a haircut, or ordering food to be delivered. Let’s band together as a community so we can all try to move forward together as one.

 

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