The next six months will be difficult for small businesses in the retail sector, which are expected to struggle with cash flow, according to the recent quarterly SME Index conducted by Business Partners Ltd. Rene Botha, who is an area manager for the risk finance company, said that for small businesses to survive, they needed to keep expenses to a minimum and reduce costs that come with the cold winter weather.
“This year we are contending with the knock-on effects of the Soweto shutdown (over poor service delivery and socioeconomic conditions) which has affected a number of SMEs,” she said. “But what we also know is that our country’s entrepreneurs are incredibly resilient. We, therefore, encourage them to think creatively to find ways to overcome some of the difficulties that the off-season presents.”
According to Botha, retail businesses have been faced with cash flow issues during this period since 2020, which should give these businesses the impetus to prioritise how they manage cash flow this season. SMMEs can take a closer look at reducing the hidden costs that are associated with winter. She noted that instead of spending money on office heating, companies should allow their employees to work from home. They could also offer their employees incentives for clients who paid early and ordered in bulk. “The basic principle, when it comes to managing your cash flow efficiently, is to increase the flow of revenue and keep expenses to a minimum,” she said.
Botha also recommended that small and medium businesses make use of the barter economy. “SMEs can barter with freelance marketers or smaller agencies to exchange marketing consultancy services for goods and services like coffee, beauty therapy, discount vouchers, or interior design services,” she said. “If you’re a small business that can offer a good or service that can help a corporate with boosting their staff’s wellbeing, that is an opportunity for a trade exchange.”
Botha also urged SMMEs to consider going online during winter and to also think about online shopping beyond the traditional means of e-commerce. “A recent report showed that WhatsApp is South Africa’s most active social media platform, with 90% of the country’s 31 million local internet users making daily use of the platform,” she pointed out. “Small businesses can develop communities on WhatsApp during winter, a season where (fewer) users are outdoors and more users are using their mobile phones.”