Bleak future for small business sector – survey
JOHANNESBURG - NEW research from the BeyondCOVID Business Survey paints a bleak picture for the future of South Africa’s small business sector one year on from when the Covid-19 pandemic hit the country, with forecasts that they expect to lay off a collective 1.2 million staff over the next six months.
Specialist management consultancy Redflank conducted the BeyondCOVID Business Survey between July 2020 to March 2021, surveying nearly 4 500 companies, more than half of which were micro to small businesses.
The survey found that 26 percent of small, medium and micro enterprises reported being forced to close their doors, 7 percent permanently,
Small businesses were also 26 times more likely to close than their corporate counterparts, and would require R1.1 trillion in relief funding if they had any hope of staying open over the next 12 months, BeyondCOVID, a registered non-profit company, found.
A snapshot of the findings revealed that 21 percent of businesses polled were closed, although 64 percent indicated they expected to reopen. Roughly 54 percent of businesses said they were operating below capacity, while 41 percent were planning to retrench staff over the next six months.
Construction, accommodation and food, manufacturing, and ICT were the worst impacted, with the public sector, health care and financial services least impacted, the report said.
It found that a third of businesses had expressed the need for funding over a six-month period in order to continue trading over the next year. Businesses expected recovery to pre-Covid-19 levels to take six months longer now, at 3.5 years compared to their projection of three years at the onset of the pandemic.