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:

Coping with COVID-19: Tips and Advice from a Business Coach

Coping with COVID-19: Tips and Advice from a Business Coach

This is a time of major uncertainty for business owners. We invited Charmaine Soobramoney, a personal development and business coach, to share her thoughts on some of the issues raised by our community. 

Charmaine has a diverse set of skills and experience. Her focus is on shaping, positioning and supporting individuals and organizations for excellence and growth.

Some of the topics we touched on in this interview are:

  • How to deal with anxiety about your business
  • What are ways to keep your staff motivated
  • How to have hard conversations with your staff
  • Could now be an opportunity for growth in any way?

Watch the full video here, and join our SA Small Businesses Unlocked community where you can engage with Charmaine directly if there’s any other questions you might have:

 

Applying for Coronavirus UIF Benefits? Here’s Everything Your SME Needs to Know

Applying for Coronavirus UIF Benefits? Here’s Everything Your SME Needs to Know

The Unemployment Insurance Fund has set aside R30 billion to help South African workers in distress due to the coronavirus.

If you’re a qualifying SME, your employees will get no less than R3,500 per month.

However, many business owners are struggling to access the relief.

More than 20,000 valid applications have been received, but only 136 have been processed, according to one news report. Business owners have taken to social media and newspaper columns to express their unhappiness with the process.

So, how do you access the UIF benefits for your business?

We spoke with Gerhard Papenfus, the Chief Executive of the National Employers Association of South Africa (NEASA), to gain a deeper understanding of the process.

Accessing the COVID-19 TERS benefits

The COVID-19 TERS (Temporary Employee Relief Scheme) is a relief package for employers, so you can pay staff salaries during the lockdown.

But a lack of clear information has been the biggest challenge SMEs face when trying to access the scheme, said Papenfus.

One part of the process includes completing a UIF Excel template. The employer must fill out their business details and each employee’s information. Before the document can be submitted, it must be converted to a CSV file. UIF Claims Commissioner Teboho Maruping told Moneyweb the bulk of applications for the relief were incomplete. Now, 23 000 employers will have to resubmit their applications.

To cover the information gap, NEASA, which represents 10,000 employers across South Africa, started publishing multiple updates to its website each day, releasing new information as it becomes available.

Papenpus explained that all employees who were “in employment on 27 March 2020 and who have suffered financial prejudice as a result of the lockdown” were eligible for the UIF benefits. This includes employees who are not South African citizens, provided they have a valid work permit.

The exact amount of the payments depended on their salaries.

“At this stage the benefit will be calculated on a sliding scale between 38% (for high earners) and 60% (for lower earners), calculated on the maximum salary cap of R17 712.00 per employee, per month.”

No worker will earn less than R3,500.

The process was different for SMEs with fewer than ten employees. For one, they do not need to sign a MOA.

“These funds will be paid out directly to the employees and not to the employer.”

However, these small businesses might struggle to recover advance payments, added Papenfus.

“UIF does not allow payment of the benefits to the employer where he employs 10 or less employees. Therefore, the employer cannot set-off these benefits against amounts advanced, which will make the employees hesitant to make advance payments in the first place.”

The UIF was set to make payments after 16 April, the date the lockdown was originally due to end.

“There will be payouts in tranches. Employers will have to apply for the first period of the initial lockdown and then again for the extended period.”

To speed up the process, the Department of Labour and the UIF launched an online platform, said Papenfus.

Looking forward, Papenfus encouraged business owners to think of life after the lockdown.

“If the employer envisages that reduction in staff or changes in conditions of employment will be required post lockdown, we advise to already start with this process during the lockdown period, as a section 189 process can be rather lengthy in nature.”

Frequently asked questions about the COVID-19 TERS benefit

NEASA has put together a COVID-19 TERS FAQ, based on the most common questions it has received from South African employers.

Here’s the summary of the key points.

Who can apply for the UIF’s COVID-19 TERS benefits?

SMEs need to be registered with the UIF to qualify. Your business doesn’t have to be in a complete shutdown for you to apply. Partial closures or any reductions in staff salaries due to COVID-19 are covered by the fund.

Which employees are eligible?

Any employee who was in employment on 27 March 2020 and who has suffered financial prejudice as a result of the lockdown. New employees who were set to start during the lockdown are also eligible.

How does COVID-19 TERS work?

Employees are paid on a sliding scale between 38% to 60% of their salaries. The lower the salary the higher the COVID-19 benefit. Companies apply on behalf of employees. No applications will be accepted once the lockdown is lifted.

How do I apply to COVID-19 TERS?

  1. Companies can email COVID19ters@labour.gov.za.
  2. You will receive an automated email response detailing the next steps in the process.
  3. Next, submit completed applications and supporting documents to Covid19UIF@labour.gov.za

Or, apply online on the UIF COVID-19 TERS Registration portal.

For more information, contact 012 337 1997.

Here is some of the information and paperwork you will need to to apply:

  • Letter of Authority, on an official company letterhead granting permission to an individual specified to lodge a claim on behalf of the company
  • MOA (completion of the agreement between UIF, Bargaining Council and Employer) · Prescribed template that will require critical information from the employer
  • Evidence/payroll as proof of last three months employee(s) salary(ies)
  • Confirmation of bank account details in the form of certified latest bank statement.

Will the scheme affect normal UIF benefits?

No, COVID-19 TERS benefits are not linked to normal benefits.

Do you need to send an invoice to the UIF?

No, this requirement has been removed.

How should employers register with a bargaining council claim? 

If you fall under a Bargaining Council, contact this organisation and find out whether or not they have finalised an agreement with the UIF. You may follow the relevant process with your Bargaining Council if they have reached an agreement with the UIF.

If no agreement has been concluded, or if one is still pending, you can claim directly from UIF on behalf of your employees.

What is included in remuneration for purposes of TERS? 

The amount an employee would normally earn and pay UIF on.

Can individuals claim TERS benefits? 

No, if an employer did not claim, the employee should ask them to claim. But if an employer still does not claim, the employees can claim normal UIF benefits for short-time or unemployment.

Where can I find more information on COVID-19 TERS?

For ongoing updates:

 

Coronavirus: Here’s how South African SMEs are hit

Coronavirus: Here’s how South African SMEs are hit

South African business owners are bracing for the potentially devastating impact of the coronavirus outbreak.

Carel Hauptfleisch, who runs a successful online retail store out of Cape Town, imports goods from China. He’s been unable to get new products from his usual suppliers since the coronavirus hit.

“Stock has been paid for, but it’s not coming in,” said Hauptfleisch.

A similar story is unfolding across South Africa.

Cash flow is under pressure

Trade links with China run deep: the viral disease is hurting the South African economy, from large firms to SMEs. Since the onset of the coronavirus in December, most Chinese factories have slowed production, or shut down completely.

Prolonged factory closures are a serious concern for SMEs who import goods from China, said Kayla Field, of the Lulalend credit team.

Field has been speaking with South African business owners over the past few weeks.

Local SMEs are struggling, said Field.

“Businesses have placed bulk orders six months in advance. They’ve already paid for these orders. But because of the virus, they can’t access that stock.”

Declining stock means declining sales, said Field.

“Cash flow becomes an issue. Businesses don’t always have capital to purchase new stock from alternative suppliers.”

Most SMEs are on edge.

“All businesses are left with is the stock they have. They’re quickly running out of the materials they need to do business.”

Hauptfleisch tells us he’s tapped into other networks.

“We are sourcing from alternative suppliers. They have limited supply.”

He remains in regular contact with his manufacturers in China.

“Some of my suppliers are getting back to work, but their suppliers are still shut down.”

Even when operations finally return to normal levels, the effects of the outbreak will stay with many businesses for a few months, adds Hauptfleisch.

Epidemic threatens jobs, growth

Many factories did not resume production after the Lunar New Year holiday, reports the Financial Times.

“With many workers…quarantined at home and supply lines affected, many factories are struggling to reopen or regain full capacity,” states the World Economic Forum.

In South Africa, almost no sector remains untouched, explained Field:

  • Mobile sales: cellphones and cellphone accessories.
  • Automotive industry: China is the world’s largest car market, according to Statistia. Wuhan, where the first case of the virus was detected, is known as a “motor city”, because it’s home to several large car manufacturing plants.
  • Retail: like companies across the globe, many SA retailers are reliant on China for stock.
  • Hospitality: around 100 000 Chinese tourists visit South Africa each year. A PwC report estimates the coronavirus will cause losses of R200 million in the tourism industry.
  • Construction: businesses import steel and concrete from China. Construction projects are stalling because of shipment delays, reports IOL.

SMEs in these sectors have been hit hard.

“Many businesses owners I speak to are worried,” said Field.

“There’s no timeline around this. Businesses are taking a knock.”

The impact of coronavirus on business finance

In some cases, business owners have been struggling to repay their business loans.

“Here’s where lenders need to be sensitive to what people are going through,” said Field.

Though, SMEs should take a proactive approach when it comes to managing their business finance obligations.

“Once you realise you will struggle to make your repayments, contact your lender immediately to make an arrangement,”, said Field.

By taking this route, business owners can avoid defaults or judgements against their name, added Field.