12 months after South Africa’s hard lockdown some SMEs have reported that they have not only survived but thrived according to a Retail Capital survey which was conducted in February. Photo: Pixabay
12 months after South Africa’s hard lockdown some SMEs have reported that they have not only survived but thrived according to a Retail Capital survey which was conducted in February. Photo: Pixabay

One year on, 83.4% SMEs survived lockdown – survey

By BR Reporter Time of article published Apr 5, 2021

Share this article:

DURBAN - 12 months after South Africa’s hard lockdown some SMEs have reported that they have not only survived but thrived according to a Retail Capital survey which was conducted in February.

The survey was based on 500 respondents – of which majority were aged between 36 and 45 – 60 percent are male and 33.1 percent live in Gauteng.

Collectively, 83.4 percent of the SMEs surveyed reported that they managed to make it through the year.

Key findings from the survey indicate that over the past year:

  • 7.9 percent of businesses’ financial performance improved over lockdown.
  • 4.2 percent employed more staff.
  • 9.2 percent of businesses’ profits increased.
  • 11.7 percent reported that profits stayed the same.
  • 9.2 percent saw their turnover go up.

“While these may be relatively low percentages, they are encouraging and indicate that it has not necessarily been doom and gloom for all SMEs,” says Karl Westvig, chief executive of Retail Capital.

SMEs surviving the hard lockdown could in large part be due to their quick response to the pandemic, changing their business models and operations overnight.

According to Westvig, 38.8 percent reported that they had pivoted their business’s services and offerings, 22.7 percent went completely remote while a further 21.9 percent continued trading as usual.

The survey also suggests that all of the respondents 39.6 percent teched up and made use of e-commerce platforms to continue to trade.

When it comes to generating income, 9.2 percent of small businesses increased their profits while 11.7 percent reported that their profits stayed the same. However, 31.5 percent are currently running at a loss, while 29.6 percent are only just breaking even.

Interestingly, while the majority were affected financially, a large portion (50.2 percent) did not reduce their staff complement.

“This is typical of a small business owner. We have seen time and time again that they will do everything in their power to reduce costs before implementing retrenchments or salary cuts, even cutting their own salaries before anyone else’s,” said Westvig.

Indeed, 46.2 percent of small businesses turned to those that could offer financial aid. The majority of those small businesses approached the banks (41.4 percent), or SMME Relief Finance Facilities (26.6 percent) while 26.6 percent applied for temporary employment relief (Ters).

Yet, 60.8 percent reported they did not receive any pay-outs from these organisations. Among those that did acquire funding (39.2 percent), 49.4 percent was from Ters, 26.4 percent was from Financial Institutions/Private Lenders and 21.8 percent were from banks.

As we get closer to winter and an inevitable third wave becomes more probable, Westvig advises SMEs to turn to technology wherever possible, cut financial corners where they can and seek financial aids that can assist them when they need it most.

BUSINESS REPORT ONLINE

Share this article:

Related Articles