Taking stock of the situation
Back in 2020, we grudgingly came to accept that the Covid-19 lockdown would last longer than most of us expected and consequently its impact would be more severely felt by almost everyone
And when would it be over? Some experts believed that the effects of the contagion would not be ‘over’ for months, maybe years, after the lockdown was lifted
Its impact was keenly felt by:
- the vast majority of businesses in general, and cash-strapped individuals in particular
- workers facing joblessness. Estimates were that as many as half of the South Africa’s working-age population will be unemployed before it is over
- the many millions of people who would not have adapted to the 21st century reality. People Toffler identified as: “… those who cannot learn, unlearn and relearn.”
Indeed, things would never return to the way they were. We were already entering a ‘new normal’ world
But, things were not quite as bad for the self-employed. Business owners were more accustomed to making their own futures than people who depend on a boss to direct them
And not all sectors were suffering equally. „Die een so dood is die ander se brood.” Some businesses were actually thriving
Which sectors were benefitting from the lockdown?
- video on demand (eg Netflix),
- mobile data companies (eg Rain),
- online shopping (eg amazon, takealot),
- home-schooling (eg Brainline) and online education,
- pharmaceutical companies (eg Roche),
- delivery businesses (eg BottlesApp),
- niche sector products (eg face masks, hand sanitisers),
- online conferencing apps (eg Zoom)
and maybe
- artisans (plumbers, electricians),
- mental health practitioners (therapists, life coaches)
The move to ecommerce was being imposed on a lot of reluctant shoppers by the lockdown. But once they grew accustomed to the online buying experience, many people wouldn’t revert afterwards
Coming to terms with the realities
What did this all mean for you and for your business?
► A survey of small businesses in Mzansi showed that most operated in the services sector. The majority of micro businesses operated in the retail space. Service businesses could not meet their customers face-to-face. Most retail and manufacturing businesses could not sell their products
► Many people, your customers and suppliers included, were emotionally and psychologically stressed out by the alien experience of a pandemic
► And many, both people and businesses, would not have adjusted to the ‘new normal’ world by the time all this was over
► Indeed, some of the business that you bought from and some of your customers would no longer be around in their pre-Covid-19 form
► By the end of the pandemic, a huge proportion of this country’s workforce would also have lost their jobs. It was projected that up to 50% of the workforce will be unemployed
► Millions of people would lose their dignity and self-respect together with their livelihoods
To prevent what appeared inevitable, several small businesses resorted to requesting donations via crowd funding and offering their loyal customers gift vouchers: saveyourlocal.co.za and supportsmall.co.za
These are some of the realities that businesses had to come to terms with if they hoped to rebound in the future
Seeing the situation differently
The ‘Spanish’ flu of 1918 killed as many as 50 million people. The world recovered from the Spanish flu
Billions of dollars were wiped out in a single day in the 1929 Wall Street crash. The world recovered after the Wall Street crash
This too would pass
But businesses couldn’t afford to wait ‘till it had past; we had to plan for life in the post-pandemic world, immediately!
To respond to and take advantage of new realities, you had to examine and understand how the business landscape that you operated in pre-Covid had changed
This was also the time to do scenario planning:
- what would the post-Covid world probably look like?
- what short and long term strategies could you develop to leverage the new landscape?
- how would your business have to be structured to respond to the new realities?
Critically, you would need a robust and resilient business to take advantage of the new conditions. You had to analyse and interpret your current financial position. (Your accountant could help to conduct profitability and cash flow forecasting)
From a sound financial base, you would be able to strategize: identify and exploit (new) short term and long term opportunities
To recognise those opportunities, you would conduct research to establish what your current and prospective customers need right then, and in the future; many customers’ needs would have changed, and many would remain changed
Some of your customers would not have survived and would have closed, some would have adapted to / embraced the ‘new normal’
With this new knowledge in your pocket, you had to ask yourself: What expertise / products / services do I offer / can I offer that I can adapt / re-purpose / reinvent to satisfy my current / new / future customers’ needs?
Some businesses would discover that they would have to diversify their product range / market segments to satisfy changed needs
Some nimble businesses had already responded. These businesses repurposed what they had to respond to a new reality:
In many cases, businesses had to pivot completely or collaborate to combine their respective strengths to secure (new) opportunities: 1 + 1 = 3. Granadilla
The lockdown was a god-send for those proprietors who needed to upskill. It was an opportunity to learn new stuff so that they could enhance / re-purpose their businesses:
- digital marketing,
- project management,
- small business finance,
- pitching,
- securing finance,
- branding
While big corporates could apply for business rescue when they got into difficulty, SMMEs had to take care of their own business continuity: paying school fees (ie costly learning experiences) to prepare to be ready for what CoViD-20 would throw at them
What lessons were you learning then that would inform systems that would prepare your business to respond effectively to future disasters?
It’s just good business
Some enhancements that you could and had to implement right away:
► Make your systems work for you:
- Update your customer database. (If you were not using a CRM, implement one right away)
- Segment / personalise your mailing list. (If you were not using an email marketing program, implement one right away)
- Build resilience: implement accounting systems to help you to take control of your cash flow eg manage debtor days. (If you were not using an online accounting program, implement one right away)
► Communicate regularly: Continually engage with suppliers, creditors, banks, investors to keep them informed about developments at your business
► Stay in touch with your market: Let your customers know that you are still there for them whenever they need you. It is cheaper to keep a customer happy than to recruit a new one
► Employ publicity: Keep customers constantly informed about changes / specials / new products
► Enhance customer care: Contact your customers to conduct a satisfaction survey: How could we serve you better?
► Conduct a needs survey: Find out if customers’ existing needs are being satisfied / if they have new needs
► Support your partners: put mechanisms in place to help your customers – and suppliers – to survive / cope / adapt / succeed, eg: Pay part now the balance later
► Pay it forward: Remember to support other small businesses who may be distressed. (You might also need them when the economy recovered)
► Attract new customers: Collaborate with complimentary business and give one another referrals. List your business on online business directories
► Introduce online sales: Make it easier for customers to continue buying from your business. (eCommerce plus delivery)
► Enable online payments: Make it easier for customers to pay your business. (eCommerce, EFT, SID instant EFT)
► Care for your staff: These times were not ‘business as usual’ for your employees either
- their finances may have been devastated, feeling insecure, their emotions would be fragile
- instead of retrenching, explore and discuss other ways to work so that they coiuld still earn an income: work online / part-time / flexi-time / freelance . . .
► Improve efficiency and productivity: Eliminate unnecessary or ineffective processes to (cut costs and) make for a leaner, more profitable business. (If you were not using a project management program, implement one right away)
Suggestions for identifying opportunities
To come up with imaginative ideas, it helps to be in a positive frame of mind. Start by listening to your favourite music, reading about developing a winning mindset, chatting with a successful optimist
Talk with your suppliers and other partners. They know what is happening with your competitors in your market segment. You might discover some unusual needs triggered by the current situation:
- ► Personal care products (hair care, skin care) and treatments (spa, nails, hair, skin)
- ► Struggling SMMEs whose businesses compliment yours that you could partner with or support
- ► Mental health opportunities: coping with / adapting to change / stress management
- ► An opportunity to partner / collaborate with small local businesses that offer complementary products / services to provide something unique / niche: eg online purchasing and delivery of artisanal food combinations (eg bread and beer)
- ► You could team up people working from home who have particular skills / expertise to provide new online services like:
- Teaching crafts / skin care / food preparation using online meeting apps
- eLearning support
- Distance tutoring / extra lessons / coding courses
- Personal training via video communications apps
- ► You could see old products / services in a new way: yesterday’s cast-off (t-shirt) became today’s necessity (mask) becomes tomorrow’s accessory (scarf)
- ► Invent crazy curiosities. T-shirts with: Covid world tour 2020: Wuhan, Milan, Barcelona, New York, London: I was there
- ► Satisfying new needs:
- Meals prepared for business-people and school-kids working from home
- Meals delivered to business-people and school-kids working from home
- ► Buy up what distressed businesses are discarding:
- ► Property for buy-to-rent
Good luck. I now expect that you are embracing everything that Covid-19 threw at you – and your business now thriving
Rick Ed
Mentor, trainer and business advisor at DoBetter.Business
PS: If you would like me to help you make your business survive and thrive, give me a shout
Additional reading
► https://www.yoco.co.za/blog/covid-19-small-business-guide/
► https://smesouthafrica.co.za/the-ultimate-covid-19-survival-guide-for-smes/
► https://www.bizcommunity.com/Entrepreneurship
First posted: 2020/05/09 Updated: 2024/03/25
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