5 Ways to Rebuild Your SME During COVID-19

5 Ways to Rebuild Your SME During COVID-19

How do you even begin to rebuild your SME during COVID-19?

Some business owners have had weeks without turnover. Others are not sure when they can start trading again.

And even if you’re operating right now, you don’t know whether or not level 5 will force you to shut your doors in a few weeks.

Your fears are shared by thousands of SMEs.

Statistics South Africa asked business owner about the impact of COVID-19:

  • 85,4% reported turnover below normal
  • 46,4% reported temporary closure or paused trading
  • 30,6% said they can survive less than a month without any turnover
  • 54,0% can survive between one and three months

Covid-19 has changed everything about how we do business, and it’s not going away anytime soon.

So, we’ve gathered  advice from experts to help you forge a path in a new world.

1. Assess your situation

No business is untouched by the impact of COVID-19.

On an episode of CNBC Africa’s Business Tomorrow, Xolisa Nqodi, managing director of Shesha Tuks, said:

“It’s been really difficult for a small business like myself. We started seeing a negative impact on our operations since the last week of February. The last five weeks have not been easy for us…now that we are  starting our operations again it’s forced us to look at our business with a slightly different outlook.”

How has your business changed? Have a look at your SME right now, from profits to marketing budgets to staff.

2. Develop a two-year COVID-19 SME plan

Once you’ve completed an honest assessment of your SME, it’s time to get to the next step: preparing to run a business during the age of COVID-19.

On an episode of Business Day TV,  Pavlo Phitides, CEO of Aurik Business Accelerator, said SMEs needed to have a longer term view.

“The only thing we can be sure of is that Covid-19 is here to stay forever, and forever in a business life is two years. We’re going to be governed on the access of the economy based on the capacity of our health services to deal with the crisis as it unfolds and emerges…We will open the economy and close parts of it.”

Phitides said this was the only certainty.

“Hold onto that, it’s all that counts and forget everything else.”

To respond to these constant changes, business owners should come up with red, amber, and green strategies.

A red stage is a full lockdown.

“In the red stage, make sure you have staff who are able and capable to work remotely. If you can’t, the anxiety then rises. As the business owner, you are carrying the cost of that personnel, you are carrying the cost of the business.”

Another fact was that successful business practices before COVID-19 might no longer be effective.

“What led to your success coming  into COVID-19…will have to be very different from the way you will find success coming out of COVID-19.”

Phitides said this included practices, business leadership, and customer behaviour.

“The environment has changed, customers have experienced fundamentally different changes ..If you don’t adopt what you did and you do well in that new reality,  you could find yourself isolated from the opportunities that are going to emerge as we move out of lockdown into the new economy.”

3. Think about your next pivot carefully

When you’re coming up with ideas, it’s tempting to move into high-demand sectors.

But Nic Haralambous, serial entrepreneur, advises against this.

“If you weren’t already making masks, you’re probably not going to own the market for masks for the next 18 months. Stick to what you’re good at but try and evolve it.”

Haralambous was speaking with Business Day’s Michael Avery.

Study your industry. What are your competitors offering? What are the trends? What gaps can your business fill?

Maybe this means bringing a project forward, said Haralambous.

“What is the next thing you were going to do? What was on your development roadmap that you can bring forward to help accelerate the progress of your business because it is going on and off for the next two years.”

Haralambous suggested examining your existing skills.

“What tools do you have in your business that you can retool in different kinds of opportunities  that can generate revenue for you in the medium term?

“You need to be brutal with yourself. Be honest about your business survival opportunity…start retooling as quickly as you can.”

4. Determine your funding need

SMEs need billions of rands to keep their doors open.

More than 30% of businesses told Stats SA they had applied for government funding.

This week, the Minister of Small Business Development Khumbudzo Ntshavheni , told Parliament the department’s relief scheme was running out of the money, reports Fin24.

A good place to start is to determine your funding needs.

  • What does your cash flow look like over the next three to six months?
  • Do you need working capital to meet a backlog of orders?
  • Perhaps you need funding to fulfil a surge in demand?

5. Look after yourself

There’s a lot of uncertainty right now.

If you’re feeling worried and stressed, you’re not alone.

Personal development and business coach Charmaine Soobramoney has been helping SME owners navigate COVID-19.

“We all need to acknowledge that this is real, and it’s normal to go through the phase of anxiety. Lives have been impacted, the economy has been impacted, people are losing their jobs…People have reasons to feel anxious,” said Soobramoney in this video interview with Lulalend.

Soobramoney called on business owners to move towards accepting the new reality.

“This is the situation. Being anxious is not going to help me move forward in the way that I need to.”

She shared the mindset used by business owners who were finding traction:

“I’m in this situation. I have no control over it but I have control over how I choose to view my business , view the future, and grab opportunities that present itself.

“When you’re in this fearful state, you feel like the world is closing in. Yes, it is but you have control over how you open it.”

If you’re looking for fast access to funding, learn more about how Lulalend can help you grow. Click here for more information on how we work with business owners like you.

Reimagining a post COVID-19 access to market strategy

Reimagining a post COVID-19 access to market strategy

Business owners have gone through quite a journey with COVID-19 restrictions.

Customers’ needs have changed and South African regulations are evolving as we move from lockdown into lower levels of restriction. 

We chatted to Marc Ashton about reimagining an access to market strategy in a post COVID-19 world.

Previously a South African financial journalist and entrepreneur, Marc heads up Decusatio, an online financial problem-solving platform.

In this interview you’ll hear some inspiring stories about how companies like Uber are innovating and partnering during this time.

You’ll also hear some tips on how to adapt your business strategy as we move into and beyond level four restrictions. 

 

 

Join a community of business owners

Share your thoughts on this topic and stay updated on the latest COVID-19 information in our Facebook community, SA Small Businesses Unlocked.

COVID-19 Level 4 Lockdown: 7 Things SMEs Need to Know

COVID-19 Level 4 Lockdown: 7 Things SMEs Need to Know

Are you starting to trade during level 4 COVID-19?

If your SME is getting ready to operate, there are a few things you should know to protect your staff and keep your business open.

For a detailed overview of Level 4, please see our guide.

What does COVID-19 level 4 mean for your business?

On 23 April, President Cyril Ramaphosa announced a phased return to work.

During the COVID-19 outbreak, South Africa would operate on a risk level strategy, said Ramaphosa.

Here’s a list covering all the industries that may return to work if you’re still unsure about your SME.

The National Government has also published the following snapshot of “permitted” industries.

Agriculture, manufacturing, and construction:

Financial and business services, transport, and repair:

Retail and food services:

Other key level 4 lockdown points:

  • Alcohol sales remain prohibited, but you can export wine.
  • Exports allowed for all agriculture, agro-processes, fishing, and forestry products
  • Accommodation establishments remain closed to the public

So, how many businesses are going back?

Between 18% and 25% of SMEs will go back during level 4, said Mike Anderson of the NSBC on Hot 91.9 FM. And it’s estimated 1.5 million people will return to work this week.

7 things South African business owners need to know about level 4 lockdown

If you’re getting ready to open shop this week, there are strict health and safety rules. Companies that fail to follow these measures have been shut down.

You need to apply for permit

You need to apply for an essential services certificate on the Bizportal.

To apply, complete the application form on Bizportal.

Communicate with staff

Communication with staff is critical, said Robyn Stone, Head of Talent at Lulalend.

Stone suggested the following points to consider when communicating with staff:

  • Honesty
  • Transparency
  • Optimism

Kindness was the most important, added Stone:

“The state of current affairs is heavy on the heart, so it’s important to be kind at all times. Not only as the Business Owner or HR delivering the comms, but by encouraging kindness between colleagues and teams. When you’re communicating remotely, things like empathy can get lost in translation so it’s important to express warmth in your tone,” said Stone.

Develop a back to work plan

All companies will need a return to work plan.

As you prepare to return to the office, you must also designate a COVID-19 compliance officer.

This person will need to:

  • Make sure your company is following health and safety measures
  • Develop a plan for phased return of staff

Stone suggested creating a shared document so all employees can check updates to the return to work plan.

The number of employees you have will influence your back to work plan.

Companies with fewer than 10 employees, for instance, need to comply with less requirements. These are discussed in clause 40 of this Gazette from the Department of Employment and Labour.

Work from home first

Staff who can work from home should do so, states the regulations.

Pregnant and vulnerable employees should be allowed to work from or work from an isolated space in the office, reports the National Employer Association of South Africa’s COVID-19 toolkit.

All your workers need a permit to come to work

You will need to complete a permit for each staff member considered essential. They will need to carry the permit and a form of identification when they travel to work.

Maintain social distancing

Some industries may only allow a percentage of workers to return to the office.

All workplaces must cater to social distancing requirements, said Nxesi.

“With regard to social distancing, workplaces must be arranged to ensure a minimum of 1½ meters between workers. If this is not practicable, physical barriers must be erected and workers must be supplied free of charge with appropriate Personal Protective Equipment (PPE).”

Stone encouraged companies to consider creating a shared calendar for when staff would be in the office.

Getting to work

Regulations have been relaxed for people travelling to work by public transport or car.

Updated regulations include:

  • Public transport can operate between 5am and 7pm
  • All passengers must wear a face mask
  • Minibus taxis can take 70% load
  • For metered taxis and Ubers, a 5-seater can take 2 passengers and a driver
  • Buses can take 70% of the number of passengers they are licensed to carry

Everyone can now access emergency repair services.

You can find additional COVID-19 resources for SMEs here:

Coronavirus SME Support: COVID-19 UIF Payments Deadline Extended

Coronavirus SME Support: COVID-19 UIF Payments Deadline Extended

The UIF COVID-19 fund has received applications for 1.75 million workers.

The Unemployment Insurance Fund (UIF) has processed 59,000 applications for UIF payments during the lockdown, reports Moneyweb. Since the start of the COVID-19 lockdown, the UIF has paid out R4.4 billion to 1.1 million workers.

On 30 April, the Department of Employment and Labour released an update on the COVID-19 Temporary Employee Relief Scheme, COVID-19 TERS.

Although a FAQ by the Department of Employment and Labour and the UIF stated the deadline for applications was 30 April, application would remain open for the next few months.

Thobile Lamati, the Director-General of Employment and Labour, said:

“We would like to make it clear that we have not reached the deadline yet. The period will depend on the Memorandum of Understanding signed, but it shall not exceed 3 months, which is the period given for the Covid-19 TERS relief benefit.”

Lamati said he was worried about the large number of incomplete applications. There are more than 300,000 workers who might not be able to claim UIF payments because of missing details. Lamati said they were waiting for employers to complete these applications.

The UIF hopes its online application portal will speed up the process.

Employers and workers can access the following information online:

The names of companies that have been paid. The UIF introduced this feature because they received many queries from workers about the status of the company’s COVID-19 TERS applications.

The schedule of each approved claim, so employers can check how much each employee will get paid.

Thulas Nxesi, the Minister of Labour, said too few companies were applying for the COVID-19 UIF payments. Nxesi was speaking at a media briefing on 28 April, reports IOL.

“We are not paying the whole amount. We pay 38% because it is a relief and we had budgeted for a period of three months. We pay according to the payroll submitted. 20 000 workers entitled to pay have not done so. Some employers have not even dared to help their employees,” said Nxesi.

If you want more information on the COVID-19 UIF funds, read our blog post on applying for the UIF payments.

SA’s Fintech Working Group Lets Startups Test New Products

SA’s Fintech Working Group Lets Startups Test New Products

A government body wants to make it easier for fintech firms to test new products that aren’t covered by existing regulations.

Today, (23 April 2020), the Intergovernmental Fintech Working Group (IFWG) called on SA finance companies and startups to apply for the Regulatory Sandbox, during a live stream.

In the sandbox, companies will be exempted from regulations while they test new services. The goal is protect consumers while making way for new products that will improve financial services.

https://www.youtube.com/watch?v=kLp2Aa56_Kc

The IFWG is made up of the following financial services organisations:

  • National Treasury
  • Financial Intelligence Centre
  • Financial Sector Conduct Authority
  • National Credit Regulator
  • South African Reserve Bank
  • South African Revenue Service

During the live stream, Gerhard Van Deventer, Senior Fintech Analyst at the South African Reserve Bank, and Kagiso Mothibi, Head of the Fintech Department at the Financial Sector Conduct Authority, outlined the process.

Mothibi explained companies in the sandbox will be able to test products and services that don’t fit into existing regulations. Testing will start on 1 July. The testing period is six months.

“Regulators can provide exemptions in order to safely test the products over that six-month period.”

However, exemptions won’t be available for all regulations.

“We will review these on a case-by-case basis,” said Mothibi.

Van Deventer summarised the criteria for participating companies:

  • Business to Consumer: increase competition, improve financial inclusion
  • Business to Business: lower costs, increase efficiency, and improve compliance

Products must be fully developed and should “challenge the existing framework”, added Van Deventer.

Plus, the idea should be different from existing services on the market.

Van Deventer encouraged applicants to conduct their own research so they can highlight how their service is not covered by current policies.

Once testing has been completed, the group may lobby for regulatory change.

It’s hoped the unit will “shape regulations that provide clear benefits to financial services,” added Mothibi.

Although several countries have launched similar initiatives, South Africa was unique because of the collaboration of several financial bodies.

In addition to the regulatory sandbox, the IGFW has a regulatory guidance unit: a single entry point for fintech companies to ask questions about regulations

Dr Arif Ismail, chairperson of the IFWG, said fintech firms had an especially important role to play as “local and global economies navigate this period of uncertainty”.

 

In a report jointly released by the IFWG in February, it states:

 

“SA has a small but fast-growing fintech industry, presenting considerable benefits and risks.

As a result, regulators need an understanding of the fintech landscape in South Africa in

order to manage risks in a way that does not stifle innovation.”

 

The closing date for applications for the first round of the regulatory sandbox is 15 May.

For more information visit the IFWG website.