Small and medium enterprises tend to take the hardest knocks in an economic downturn. Nothing illustrates this better than the unravelling impact of Covid-19, which left many SMEs teetering on the edge of collapse, says Colin Timmis, general country manager and professional accountant, Xero South Africa.<\/p>\n
In his 2020 medium-term budget policy speech, finance minister Tito Mboweni painted a somewhat bleak picture of SA\u2019s economic outlook, largely because of the soaring national debt.<\/p>\n
Since small businesses play a critical role in job creation and growth, they will, therefore, once again be required to plug the holes.<\/p>\n
Xero has been conducting research on the State of South African Small Business for the last five years. For this year\u2019s report, it used the findings of its research, alongside advice from industry experts, to map out the key areas small businesses need to focus on for recovery.<\/p>\n
The study, conducted by market research group World Wide Worx, surveyed 400 small business owners.<\/p>\n
Together with some collaborators in the report, Xero identified six trends that will be really important over the next 12 months. Here\u2019s a closer look at each trend and what collaborators had to say:<\/p>\n
Honing technology skills \u2013 Colin Timmis, Xero<\/strong><\/p>\n Nearly all small businesses have adopted technology they now depend on, with 97% investing in new technologies in 2019. Cloud accounting showed the most robust growth, surging from a mere 13% in 2017 to 61% in 2020 \u2013 an indication that most can now manage their finances remotely.<\/p>\n Yet, more than two thirds (67%) of respondents conceded that they struggled to find the right talent to execute their digital strategies.<\/p>\n Many still lack the skills to shore up the transition, and government and technology firms need to make a more concerted effort to close this gap.<\/p>\n Early on during the pandemic, many opted for any tech solution to allow them to continue their operations. It has since become clear that we\u2019re in this for the long haul, so businesses must pay closer attention to decide which digital solutions suit them best.<\/p>\n Getting started with tech adoption \u2013 Nicole Rousseau, PKF Ignite<\/strong><\/p>\n \u201cIt\u2019s important to understand what you are trying to achieve through adopting new technology,\u201d said Rousseau. \u201cOnce you\u2019ve defined your goals and objectives, you should contact an expert in the field who can assist and help find the right technology for your business.<\/p>\n \u201cEvery business needs to select technology that will help them achieve their unique goals. You should map out the process properly and develop an implementation plan which is realistic and achievable. I would also recommend keeping it simple and using a phased-in approach.\u201d<\/p>\n Protecting wellbeing \u2013 Mike Anderson, National Small business Chamber (NSBC)<\/strong><\/p>\n Xero\u2019s research shows that 79% of business owners have experienced stress as a result of work, and this will have only been made worse by the challenges brought on by Covid-19.<\/p>\n \u201cProtecting your wellbeing and that of your team is key for staying productive and resilient,” said Anderson.<\/p>\n \u201cTry to normalise the fact that current circumstances will impact mental health and signpost the available support to your entire workforce so that everyone knows to whom they can turn. Check in regularly, create a healthy routine, listen to yourself and others, and be flexible. None of us has been through this before, but we will get through it together.\u201d<\/p>\n Connected everywhere and anywhere \u2013 Arthur Goldstuck, founder and CEO of World Wide Worx<\/strong><\/p>\n According to Goldstuck, the small business of tomorrow is also home-and-away, meaning it can function equally effectively from a home office, an office building, or from the beach.<\/p>\n \u201cTo be part of this trend, explore which of your processes, systems, services, and administration can become completely digital, stored in the cloud, and accessible from anywhere.<\/p>\n \u201cConnectivity is the heart of the digital future. It\u2019s no longer enough to rely on one form of broadband access for a small business. Backup, or what ISPs, unfortunately, refer to as \u2018redundancy\u2019, is crucial. Have both fixed-line and mobile options available at all times, so that load shedding or cable breaks don\u2019t suddenly bring your business to a halt.\u201d<\/p>\n Embracing new ways of working through innovation \u2013 Fred Roed, CEO of SME network Heavy Chef<\/strong><\/p>\n Roed is encouraged by the signs of innovation he observes within the Heavy Chef entrepreneur community.<\/p>\n \u201cAcross the board, we\u2019re seeing entrepreneurs adapting their businesses to the post-Covid era. We\u2019re witnessing a remarkable resurgence of creative pivots, side-products becoming main-products, innovative partnerships, and new product launches.<\/p>\n \u201cAs much as this has been a harrowing year, I believe we\u2019ll see some extraordinary new channels of innovation opening up as a result of the hardships we\u2019ve faced in the entrepreneur sector.\u201d<\/p>\n Building an online presence \u2013 Kristen Buttress, owner, Kristen\u2019s Kick-ass Ice Cream<\/strong><\/p>\n Buttress believes that setting up an online presence is something every small business owner should aim for if possible.<\/p>\n \u201cMost customers are at home, looking at their phones for things to do. Spend your energy expanding your brand awareness via social media and other outlets who can create exposure for your brand. Now that we\u2019re emerging from lockdown, people want to have some semblance of normal, so adapt your offering to draw people to your brand.\u201d<\/p>\n The way forward<\/strong><\/p>\n South African SMEs are the lifeblood of the local economy but also the most vulnerable. Over the coming months and beyond, we all have a role to play in helping to rebuild the SME sector.<\/p>\n “True to their entrepreneurial spirit, business owners have shown a steely resolve over the past few months. SME owners have demonstrated extraordinary adaptability, drive, and innovation under the most challenging circumstances. We have to keep this momentum up, so now is not the time to ease off,” said Timmis.<\/p>\n
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