Johannesburg - Power utility Eskom announced possible stage 6 load shedding from 5pm on Tuesday, and this could affect over 10 million small businesses.
According to Small Enterprise Development Agency (SEDA), over 10 million people are employed by Small, Medium, and Micro Enterprises (SMMEs) in South Africa.
These enterprises play an essential role in the economy. They can be critical drivers of economic growth, innovation, and job creation.
While the government encourages citizens to be industrious and become entrepreneurs, recent times have seen difficult scenarios challenging the growth and sustainability of many SMMEs.
While the sector suffered immense damage due to the Covid-19 pandemic, there is another factor that continues to create unfavourable conditions for entrepreneurs and their business enterprises, load shedding.
While members of the public have found ways to mitigate the effects of load shedding like using candles for light, installing gas stoves for cooking, and even installing an uninterruptible power supply (UPS), also known as a battery backup which serves to provide backup power when your regular power source fails or voltage drops to an unacceptable level.
Businesses, on the other hand, feel the impact of the loss of power the most. This is particularly true of smaller businesses that do not have the infrastructure to cope with the loss of electrical power.
Themba Limekhaya from Orange farm makes pizza from a shack using an electrically powered oven. His budding business comes to a complete halt when the power goes off due to load shedding.
“Load shedding is a big problem. Even yesterday, I lost orders through load shedding. The only solution, now, is for me to go off-grid and get a wood fire oven.”
“Even now, I'm not promoting or advertising my pizza so much because I know load shedding is a problem, so people come here looking for food, and I look unprofessional because I can't give them what they want,” he said.
Sifiso Nyembe, who owns a hair salon, lamented the loss of income for himself and his employees.
He said: “Businesses cannot keep paying their employees to be present during a power outage as, essentially, we will be paying no workers. How do I justify paying someone to sit around and wait for the power to come back on?”
Speaking to Alumo Energy, David Seinker, CEO of The Business Exchange, pointed out the significant negative impact load shedding has on small businesses.
He said: “The reality is that many small business owners cannot afford to buy generators to keep the lights on during the rolling blackouts. For them, three or four hours without electricity will have a significant negative financial impact.”
These are some of the effects load shedding has on small businesses
- Loss of production: A significant number of businesses rely on electricity to power machinery, technology, and light to produce their products or provide services. The loss of electrical power means that daily production targets cannot be met.
- Loss of profit: The loss of production results in a loss of profit. If you are not producing goods or services, the direct result is that you have nothing to trade, and if you don’t trade, you do not generate an income, and your bottom line suffers.
- Theft and burglary: Insurer Dialdirect has compared the number of burglary incidents there is no load shedding to when there is from July 2019 to May 2022 and found that during the week, load shedding resulted in a 3.2% increase in burglaries, and the figure more than doubled to 5.2% on weekends. Loads shedding compromises security, leading to further losses.
- Damage to electronics: the surge of electricity when the power is returned upsets the steady voltage flow in the electrical system. This, in turn, can cause damage to electronic appliances.
Here are some steps entrepreneurs can take to try and mitigate the effects of load shedding on their businesses:
- Be aware: know the load shedding schedule. Knowing when you will be affected by power interruptions allows you to plan ahead. You can maximise the time when there is power available to the benefit of your business.
- Consider alternative energy solutions: while converting to solar energy or installing a generator may seem expensive, the long-term financial benefits are immeasurable. With the advancement of technology and innovations in the alternative power sector, the costs related to the installation and maintenance of alternative power systems have dropped, making it a worthwhile investment.
- Back up your data: this should be a routine procedure in any workplace. With a backup system in place, there is no need to panic if the power goes off.
The fact is load shedding is going to be part of the South African living experience for the foreseeable future and entrepreneurs will need to find innovative ways to combat its effects if their businesses are to survive.