CAPE TOWN - Despite the downturn in South African economy, Small and Medium-sized Enterprise owners need to unleash their entrepreneurial innovation to remain in the game, said Business Partners Limited on Monday.
Anton Roelofse, the Regional Manager at Business says, in the first three months of this year, the household consumption rate fell 2,3% with expenditure on food, restaurants, recreation, transport and clothing declining. “As such, small businesses within these sectors are being negatively impacted as consumers have less disposable income to spend on their products and services,” says Roelofse.
Roelofse notes that, following the 2008/2009 economic recession, it has become apparent that entrepreneurs with necessary resilience and skills-set can overcome economic challenges and adapt their business models to the current headwinds they are faced with.
With reference to Harvard Business study which reveals: during economic recession consumers tend to prioritize their consumption pattern into categories which include: essentials, treats, postponables and expandables, therefore business should see the gap to restructure according to those patterns, Roelofse points out.
“A good way of doing this this is to track how consumers are reassessing their priorities and what they place value on,” he explains. “For example, as the Western Cape is experiencing a devastating drought, purchasing bottled water has become an essential for many households. As such, SME owners throughout the country could consider transporting bottled water to the Cape and its surrounds." he added.
To add insight on emerging business opportunities Roelofse said “Another developing trend is for small businesses to offer green energy alternatives due to the recent scarcity of power in the country. While this service may have been an expendable in the past, the recently experienced negative impact of power shortages have made it essential especially for manufacturing businesses.”
BUSINESS REPORT ONLINE