An important driver of the South African economy faces an enormous challenge. Our small to medium enterprises (SME) sector has barely emerged from the ravages of the pandemic, before now having to face a fresh set of obstacles. They need to be clever and savvy to overcome these challenges.
Rising fuel and food costs are making it difficult for everyone to control spending and budget adequately, a fact that has a knock-on effect for any SME. This sector also faces threats such as cybersecurity, the ongoing challenges of load-shedding, and lack of government support.
SMEs employ between 50% to 60% of South Africans and contributes up to 34% to the country’s GDP, according to a study by IFC. The sector plays an instrumental role in economic stability and job creation. Yet, SMEs battle to keep their doors open, and must find creative ways to position themselves competitively.
“With all these challenges, there’s also an invaluable opportunity. If SMEs can empower themselves by facing these issues head-on, it will not only benefit the South African economy, but it can boost job creation,” says Tom Stuart, Chief Marketing Officer at SME services provider Lulalend.
For SMEs, innovation and modernisation are what will drive competitiveness and accessibility. By procuring the right tools, business owners can make sure they’re in a strong position to drive business growth and mitigate risks.
Invest in cybersecurity
Cybersecurity is an ongoing threat for South African businesses, and SME owners shouldn’t underestimate the likelihood of being targeted. Cybercrime can have irreparable consequences, like loss of critical business or customer data. It can also breach the trust built between SMEs, their suppliers, and their clients.
“Cybersecurity is not simply a problem that your I.T. department needs to solve. Investing in the right security infrastructure, working with third parties to develop effective cybersecurity policies, and facilitating staff training workshops are all part of mitigating the risk,” says Stuart.
Business infrastructure upgrades
South Africans have become all too familiar with the impact of load-shedding. While getting a generator might not be the most feasible solution for everyone, it’s still important to be aware of how load-shedding impacts your business, specifically your business’s assets.
Power surges can damage company hardware, leading to unforeseen costs to replace computers, printers, or other critical electronic devices. This can add up to quite a bit of money in the worst cases.
In the absence of a generator, an uninterrupted power supply (UPS) system or surge-protecting power strip can help protect valuable electronics from surge damage. While these aren’t cheap by any stretch, they can save a lot of money in the long run.
Smart partnerships
Finding adequate support as an SME is arguably the most important part of becoming successful and profitable. No one makes it on their own, and SMEs are no exception. SME business leaders should adopt a strategic approach, looking for the right suppliers and advisors to help them grow effectively and sustainably.
“The right opinion matters. Whether it’s a business development consultant or an SME-centred financial services partner, working with the right people will play the biggest role in helping business owners keep their doors open. Sustainable SMEs that are savvy in their approach, is arguably one of South Africa’s best opportunities for sound economic recovery.”
