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  • How Some South African Businesses Survived The Pandemic

    06 Oct 2020 by Damon Sivitilli in Lifestyle
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    [imagesource: Wcities on flickr.com]

    Businesses the world over are under a lot of strain during this pandemic period. Some have had to close their doors permanently, others have downsized, retrenched or taken on salary cuts in order to keep their ventures going.

    While the new norm has seen a lot of companies migrating to online sales, South Africa like many African states still lags behind in this area mainly due to lack of infrastructure and a population that does not have access to the requisite technology. As a result, Woolworths has introduced a small-shop format and centralised distribution for its food division.

    Some of the benefits of the small-shop format are that customers are not limited to shopping once a week in a much bigger shop but have the option to visit the small shops as often as they wish. This is especially true for customers who love fresh produce. Centralised distribution also makes it easy to support the small convenience shops. Over and above the benefits of the small-shop formats, ongoing Woolworths specials allow customers to save each time they shop. 

    In South Africa, small and medium sized enterprises (SMEs) have been particularly affected by the Covid-19 pandemic. McKinsey defines SMEs as businesses with a turnover of more than R15m and less than R500m. These SMEs are said to account for more than 89% of South African businesses while employing between 50 and 60% of the nation’s labour force. Experts estimate that about 60% of these SMEs will not make it through to the end of the pandemic. 

    So what can be done to help these businesses survive and what role can the government take?

    What is the Government doing to help companies during a crisis?

    Although government funding is available for struggling businesses, not all of them have been able to benefit from this funding for one reason or another. Other bailout options such as Unemployment Insurance Fund (UIF) and PAY AS YOU EARN (PAYE) also exist but just like the government funding, not everyone has managed to benefit from these.

    What measures can be taken to mitigate challenges during Covid-19 crisis?

    • Companies need to make full use of existing technology to gunner new customers. 
    • Where possible they should find ways to reach new customers even without use of technology. 
    • Increase market share through the development of more robust go to market strategies

    The same mitigation measures could be implemented to aid other businesses in distress.

    Current measures such as working from home and physical distancing have allowed for many business models to carry on without having to completely shut down operations. 

    Going into the future it is still uncertain how things will pan out but something that is certain is that businesses will have to reconsider how they operate.

    Post Covid-19 measures to ensure business survival

    It is suggested that not only businesses but all stakeholders will have to relook how to do things in the period post-Covid. Physical distancing will most likely continue after the pandemic so will the use of technology or internet-based services as well as delivery services. Here are some other measures that could be considered:

    • Doing away with large Points Of Sale 
    • Simplifying products to increase digital and remote sales
    • Migrating to remote and digital services
    • A shift in workforce models
    • Introduction of remote offices 

    Although the nation has moved to Level 1 of lockdown, we cannot celebrate the end of the pandemic just yet. Businesses need to continuously readjust to remain viable. Whether by means of specials like Woolworths has done or through the implementation of other mitigation measures.

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