Small business owners must engage in disruptive strategy to circumvent Covid-19 challenges
Being owner of a professional services company Prodigy Business Services, Nerishni Shunmugam indicates that small business owners have to think outside the proverbial business realm and turn things upside down. Shunmugam says that simple disruptive techniques may prevent self destruction of small businesses.
In March 2020 Goldman Sachs did a survey of small business. The survey of 10,000 small business participants highlights the immediate and critical for policy action and support for small business owners. Fifty percent of business owners that were surveyed said they did not think they could continue business operations for more than three months.
The survey was largely based on small business owners in the USA.
However, globally the trends are similar, if not worse.
As the COVID-19 continues its cessation of small businesses, the livelihood of many entrepreneurs and their small businesses are threatened.
For South African small business owners, they already have to contend with a contracting economy. Additional shocks from COVID-19 are putting further pressure on their operations. These businesses usually have a turnover of R1million to R5million per annum. Lockdown measures have caused revenues in many small businesses to fall precipitously. In the COVID-19 South Africa SME Financial Pulse Survey the survey amongst medium to larger businesses revealed that the majority of these businesses will focus on cutting back on business spending to survive.
However, for small businesses, this may not be enough. According to a survey conducted by SME Africa and SASFIN across one thousand small business, analysts predict that approximately 60 to 80 percent of small businesses in South Africa may close before the crisis is over.
Nerishni Shunmugam who has experience in starting and operating a small business suggests that small business owners should consider pragmatic and disruptive techniques to deal with the challenges that COVID has brought about.
Nerishni Shunmugam also indicates that micro and small businesses are the lifeblood of South Africa’s economy—and also the most at risk during this period of COVID. SMEs across South Africa represent more than 98 percent of businesses, employ between 50 and 60 percent of the country’s workforce across all sectors, and are responsible for a quarter of job growth in the private sector. And while the GDP contributions from South Africa’s SMEs lag other regions—39 percent compared to 57 percent in the EU—there is no doubt that this sector is a critical engine of the economy, says Shunmugam.