Businesses of all sizes, mostly retail, have been left devastated by previous weeks’ events, with about 800 stores looted, 100 malls damaged, and over R20 billion lost.
As if the critical impact of COVID-19 was not enough for small businesses to handle, the unrest has reaffirmed the need for – and importance of – a financial buffer to build resilience against a plethora of unforeseeable future events that can cripple your business.
After noting that many businesses would not have the means to rebuild, the president, in his most recent national address, pledged to assist small businesses affected by the looting by providing aid and support in the form of funding or schemes.
However, this may not be enough as lots of ingenuity may be needed, especially since we are still in the middle of a pandemic. The good news is that all is not lost. As we conclude National Savings Month, there are multiple ways that small businesses can save money, and technology is perhaps the most effective in ensuring resilience.
E-commerce and online retail
A practical route for SMEs in the retail sector would be to consider setting up and prioritising an e-commerce wing of the business. This will not only futureproof your business in times of unrest but will also ensure that you can keep trading when social distancing is required.
Online shops generally store goods in remote warehouses, while it is also possible to order goods from suppliers on demand. This typically goes well with a reliable delivery service that may add to your revenue. There are numerous ways that businesses can improve the online shopping experience through automation, with little to no brick-and-mortar presence.
Constant innovation means staying ahead of the times and using the most convenient and effective means of production to save costs. What’s the point of having technology if not to make life easier?
Kaveer Beharee, founder and CEO of Ubiquity AI, believes that start-ups incur unnecessary expenses on brand collateral, expensive office rental, and stationery, among other non-urgent expenditures. “Perhaps the biggest savings comes from technology and continuous innovation,” he says.
“We’re pretty much in a golden age of innovation, so keep your eyes peeled for new solutions to costly expenses.”
Beharee offers a few ideas, including once-off NFT business cards and outsourcing from low-cost service platforms like Fiverr and Upwork. “(These) democratise access to almost any complex service that small businesses would traditionally pay an arm and a leg for from local service providers.”
According to Nigel Bhebhe, co-founder and CEO of diesel and petroleum distributor Global Legacy Distributors, if you cannot marry your business with the 4IR and internet of things, you’re fossilising fast and solving an unnecessary problem.
“If you can use existing global platforms to produce and sell your products, you save money and time on machinery, complicated processes, staff overheads, logistics, etc., and ultimately free up time for marketing and deal-closing. Drop-shipping is one example where the seller accepts customer orders but does not keep goods in stock.”
According to Bhebhe, even WhatsApp calls can save your business tens of thousands per year in phone bills. “All the billionaires I know have no problems calling me on WhatsApp.”
Open source and free software trials
Before you spend thousands on software and updates, look at open source software alternatives. Access basic functionalities for free on everything from photo-editing to document creation and even project management.
When it comes to managing your finances, however, it pays to pay for a solution that guarantees the security and integrity of your information. Choose a solution that offers a free trial, low-cost basic plans, and the option to upgrade as your business grows.
Profitably, or lack thereof, doesn’t kill businesses, adds Beharee – cash flow does. “Every problem I’ve ever experienced relates to poor cash flow. This happens for many reasons, but generally, SMEs have limited access to bridging or short-term funding facilities and, if they’re able to access funding, it’s usually expensive. Becoming cash-flow-positive should be any start-up’s top priority.”
Lonwabo Marele, founder and CEO at digital wealth magazine Successful Journals, says: “We live in a world where, when we struggle with something, we can simply Google it or find it on YouTube. And, as an entrepreneur, it’s important to build a network of like-minded people who can give you advice on certain financial or cash flow topics. A business needs to balance its cash flow sheets to generate profit.”
Sage Business Cloud Accounting
With Sage Business Cloud Accounting, you spend less time on admin and more time growing your business.
Take advantage of the situation
It’s often said that every problem presents an opportunity. Businesses using traditional operational models should rebuild using a more futuristic approach and digital technologies.
“The opportunity of a lifetime must be seized within the lifetime of the opportunity,” says Bhebhe, who recommends that you use the pandemic to save money for your business by, for example, not meeting clients in person and instead use alternatives like Skype, Zoom, or MS Teams.
“During the pandemic, clients and prospects are more than willing to meet up online. It’s not being viewed as anything other than you being considerate and sensitive to your client’s health”.
Bhebhe also recommends that small businesses consider bartering services to save costs. “Know your value and worth and barter the life out of it. Money may be tight right now, but businesses and people need what you have and have what you need. Trade as much of the value you can bring to get value for your business in return.”
“For example, a tech-savvy programmer can set up systems for bigger companies to operate easier during the pandemic, in exchange for coveted machinery. It’s a win-win all around, and the entrepreneur doesn’t have to buy the machine at the premium charged when buying it cash.”
Although you are in business to solve a problem, Marele says, at the end of the day, lights have to be on, and you have to eat. “Having a great service or product, charisma, and a financial advisor will help to ensure long-term financial success.”