A new survey by the South African SME Finance Association (SASFA) shows that despite the help offered by government and the private sector, only a fraction of businesses had any support. Only 47% of business owners applied for relief from government or financial institutions, because many did not believe they would qualify. Even amongst the 47% who did apply, only 32% were successful. This means that a mere 15% of SMEs with a turnover of below R10 million per annum, had any support.
To assist with the devastating impact Covid-19 has had on businesses across the country, Budget Insurance launched a relief fund for its business insurance customers with an annual turnover of less than R15 million. Those that qualified were given a relief package of R100,000 each, as well as business mentoring support.
“Our goal is to help SMEs survive the storm and emerge resilient to enable them to continue creating employment and contributing to South Africa’s economic reset,” says Alex Terblanche, Head of Budget Business Insurance.
‘This too shall pass’ is a phrase echoed by all 60 fund recipients. Despite the financial and emotional hardships they have had to endure, they all demonstrated an immense resilience and agility fuelled by the belief that there are better days ahead.
According to fund recipient Yvonne van Deventer, owner of bakery and restaurant, The Millery Clarens: “Lockdown restrictions caused a 50% drop in revenue and a backlog on our expenses. We had to unfortunately retrench some of our staff which was very sad because we pride ourselves in job creation for the local residents in the area. Although things are starting to slowly pick up, it really has been very difficult and challenging.”
Another fund recipient, Nicky Charles, owner of G2G Hair Studio said: “I had no income for about three months. We were the only shop in the mall that had to remain closed. The worst thing is that I had to let good people go for my business to survive.”
Primrose Bonisiwe Mdingi, owner of Disability Pride said: “On top of a loss in revenue, I incurred more debt as I had to buy costly PPE gear for all my staff. Although I am relieved that I did not have to retrench any of my dedicated staff, they have been affected by pay cuts.”
Pastor Devan Pillay from Truth and Life Ministry said. “We closed our doors on 26 March and only reopened them in the first week of June. Now, our services are limited to 50 people, where it used to be between 150 and 200. We rarely see more than 30 or 40 people in attendance. Receiving this funding means that we will be able to pay salaries and help those in our congregation who were also severely impacted by COVID-19-related job losses.”
For Sifiso Dlamini, owner of Bathathe Photography, lockdown has been devastating on his business and a deeply worrying time. “We lost out on so much work – weddings, corporate events, concerts – all were cancelled and the business was not generating a cent. With this funding we’ll be able to pay our running costs and upgrade our equipment for when everything returns to normal again.”
The Budget Insurance Relief Fund recipients have the following advice to assist other SMEs dealing with similar struggles:
- Don’t panic. Remaining calm and rational is the best way forward.
- Believe. Continue to believe that things will get better, do everything you can to make them get better, and eventually, they will. Just take it one day at a time.
- Persevere and stay positive. Getting into a negative mindset is not going to help.
- Choose your allies. One of the most important things, crisis or not, is to choose who you surround yourself with and to make sure that you have the best people on your team.
- Be brave. Take the bull by the horns and be prepared to make the tough decisions.
- Protect whatever is left of your business. It’s a very hard time but don’t give up. Things will get better; your business will grow again and enable you to employ people again.
- Don’t wait for the lockdown to end to start working on your ideas, start now – brainstorm, learn more about your business, plan what your next moves are going to be and always keeping going.
- Think out of the box and see if there are opportunities to expand your business. Don’t limit yourself and stay strong.
- Remember that lockdown is temporary, but business growth is forever. This nightmare will end eventually, so keep learning about your business and never stop. Don’t think short term. Try to also see what else you can add to your current business offering.
- Don’t give up. As entrepreneurs, we have all put in a lot of work into our businesses. It is strenuous but you need to keep at it – for yourself and for those who rely on you.
The fund recipients will have access to an exclusive support programme by Enterpriseroom to assist with business acceleration, growth, new opportunities and sustainability. Enterpriseroom have the following advice for other SMEs:
- Come to terms with and embrace the reality of change. It offers you an opportunity to reinvent yourself as a leader, assess what really matters and what problem your organisation seeks to solve.
- Try new things and learn from it, for good or bad. If you are, for instance, a clothing manufacturer. Try imaging the materials in a new way. Some people pivoted to making masks while other opportunities still exist towards which fabrics can be appropriated. The same is true for your business and its services or products. Be creative.
- Keep asking if there is another way to do this? The old way is past, the new way wants to introduce itself. Ask questions about each activity and decide if its core to what you want to continue doing. If not, let it go and focus on that which works.
- Don’t get lost in the drama of it. Life and business will go on. Try tend to immediate stresses while remembering the longer-term intention. You’re decisions will be less clouded and ones you don’t regret.
- Use your energy to cultivate curiosity and learn new things about other industries, your competitors, sales skills, networking skills, negotiation skills and so on. Rather than worry, ready yourself, your team and your business to take on the new normal while riding out this period.