NATIONAL NEWS - Many small businesses will have to change their business models and opt for short-term customer needs to survive Covid-19.
This was according to experts who spoke at a webinar hosted by the Mail & Guardian and Absa for small and medium-sized enterprises (SMEs) on Friday.
“If you are an entrepreneur running a business then this is the time to get close to your customers because they will tell you what your short-term (business) opportunities are,” said businessman Vusi Thembekwayo.
“Put the customer at the centre and see where the opportunities are.”
However, he said such shifts should be within the business’s reach and be cost-effective.
“SMEs need to question whether the services they provide are critical to the customer; if not, one needs to start rethinking your business model. Avoid being cut in the essential budget,” he added.
Oscar Siziba, of Absa bank, agreed businesses needed to look at their business models again.
“What you used to sell yesterday is not what you will need to sell tomorrow.”
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He said such a shift was some SMEs which started selling masks during the lockdown as a way of staying afloat.
“That’s the kind of thing SMEs need to look at. Revise your costs, look at where your opportunities are.
“This is the moment you need to get a little bit thinner and think about what your core business will be and what you are good at.”
He said banks launched several initiatives for SMEs, which included “payment holidays” and loans.
Siziba said the bank’s criteria for funding had changed to mainly prioritising the cash flow of the business instead of the balance sheet.
“Profitable businesses might not exist, but a business that can demonstrate the management of cash flow is essential. We are banking on entrepreneurs that are rolling up their sleeves to see where every cent goes.”
Motlatjo Moholwa, of the Gauteng Department of Economic Development, said SMEs were critical in boosting the economy and ensuring sustainability.
He said government had dedicated R4-billion in grants.
“As Gauteng government, we are giving SMEs at least six payment holidays and the private sector should do the same. No one should be blacklisted during this time.
“At best, we estimate Gauteng would lose about 800 000 jobs. The worst would be two million jobs.”
He said the government would prioritise the tourism sector, which continues to suffer under the lockdown.
