Small Business Week: Important tips to protect your business in trying times
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Small Business Week, which is observed between 12 and 18 September and recognises the critical contributions of entrepreneurs and small business owners, is an opportune time to shine the spotlight on the importance of supporting these enterprises.
This is the view of Soul Abraham, Retail Executive at Old Mutual Insure, who says that although this an American-led initiative, there are lessons from this important initiative that can be adapted for the South African market.
“We know that small businesses are the lifeblood of the South African economy, yet these businesses have suffered great setbacks due to the impact of the pandemic. It’s never been more important to support these enterprises as much as we can so that business owners can focus on building and protecting their businesses to last,” says Abraham.
The importance of small businesses to the SA economy
Small, medium and micro enterprises (SMMEs) contribute significantly to the South African economy: According to research they employ between 50% and 60% of South Africa's work force and contribute around 34% to the national Gross Domestic Product (GDP).
“This points to a picture that small businesses are also vital to solving South Africa’s unemployment crisis, which is now even more urgent given the recent figures from Stats SA of 34.4%,” says Abraham.
In addition, nearly two-thirds, or 64.4%, of people aged between 15 and 24 are unemployed. This is among the highest recorded in the world.
He adds that although he is encouraged by the record number of companies (510 000) registered in 2020 — a 32% leap over new company registrations in 2019 – as per data from the Companies and Intellectual Property Commission (CIPC), a lot will need to be done to ensure that these businesses are sustainable.
“Worryingly, according to statics, 50% of small businesses fail within 24 months of launch and a further 70% to 80% of small businesses fail within five years. We must work to improve this figure, and support small businesses where we can,” says Abraham.
How to protect your business
If you are a small business owner, you have no doubt worried about how to protect your business to ensure it withstands challenging times. Below Abraham shares his top insights to help navigate this uncertain world.
1. If your business has changed in the last few months due to Covid-19, update your insurance policy details
“Changes in your business impacts its risk profile, and so if your business has changed dramatically in the last 12 months due to the pandemic, remember to ask your broker to relook your policy, as your premium may need to be adjusted to take the revised risk into account,” says Abraham.
To avoid unforeseen surprises in the event of a claim, do proper due diligence by conducting a review of your policy to make sure your adequately covered and not underinsured. Speak to your insurer about tailoring your policy to fit your needs and about any changes to your profile.
“If anything, as a business owner, this gives you peace of mind by ensuring that your business is protected. Reviewing your business activities; assets; product inventory and motor vehicles is a good place to start.” explains Abraham.
2. Use free resources as much as you can
As simple as it sounds, if you are cash-strapped, you will need all of the support you can get for free. Many online resources, if from reputable sources and partners, may move the needle on your business’s risk and growth.
“To protect your business and ensure it withstands the challenging times we are in, using easily accessible and practical tools, resources, and support, can mean the difference between surviving or thriving during this economic downturn.”
Here is a free tool offering an opportunity to add value to your business. Called the Business Growth Box, it is a tailored business insurance an online toolbox with business tools to help SME’s thrive in the digital and hyper competitive market accessible at.
3. Embrace the Digital Age
One of the biggest challenges that SMMEs continue to face is effectively adapting to a new way of working in a digital age. From Zoom meetings and doing business over the phone to closing deals on email and managing employees remotely, the pandemic accelerated the digital move.
“Digital is the lifeline needed to re-ignite the small business sector, so small businesses must upskill themselves and take advantage of this opportunity. You can get the basics right with a little effort, like uploading a business profile on Google, or free educational resources like Grow with Google. ”
Abraham says that if you do not offer your customers an opportunity to interact online, you could be missing out on sales. This could include building a website, which can help you create space for inventory, attract new online customers, explain your offering in detail, and allow you to increase your business hours to 24/7.
4. Find the right opportunity that will support your business growth
For any small business an obvious stumbling block is funding. If faced with challenging times, small businesses are often forced to give away an equity portion of their business or take on debt to fund their growth.
“Look for the right opportunity that will support your journey. There are so many big businesses out there that are wanting to support small businesses, whether in the form of obligation free funding, e.g. competitions, or digital tool kits.”
He says that as an example, recently we offered a cash injection for small business owners to help them kickstart their business growth. Ten businesses each won R100 000 to use as they please to protect and progress their businesses. These businesses span multiple industries such as engineering, mining, technology, food and beverage and retail. The winners announced include; Retail Shopfit, Underwraps Caterers,LCD Technologies, Osmers AJ H/A Augusta Farm, Ilianga Mining Services, Qaram 5 000 000,00, Andiccio24 Lynnwood, Fochville CV's And Propshafts, Danmar Precision Engineering and Zebros King Williamstown
Each business that entered also stood a chance to win a free webstore, invaluable in the digital age, as well as a Yoco point-of-sale device to quickly and effortlessly transact. The company will be announcing the 50 winners of the webstore and Yoco devices shortly.