Small businesses in Gauteng, the Western Cape and KwaZulu-Natal have been hardest hit by Covid-19. Covid-19 Business Rescue Assistance (Cobra) CEO Bob Grewer said, however, that there were different challenges depending on the industry.
Cobra, which was started by IQBusiness, a consultancy firm and Shindler’s Attorneys in 2020, was formed to assist struggling SMMEs. It has 90 partners from various sectors. He said one industry that had suffered due to the pandemic was tourism, particularly businesses that depended on foreign tourists.
“There are a lot of people whose entire businesses are on getting foreign people to SA and their client base is foreigners, and we still have a situation where South Africa is on the red list on many countries and these tourism businesses had zero customers for over a year, which is devastating,” Grewer said.
“We believe that as soon as the vaccination programme is rolled out in South Africa, we will see a strong recovery in that sector, and this is dependent on whether international countries will allow their citizens to travel, which in turn is dependent on the vaccine rollout.”
Grewer said the petroleum sector had also felt the pinch because people were driving less and working from home.“The South Africa Petroleum Retail Association is seeing a 30% decline in people filling up vehicles and is selling less petrol. This drop is not dependent on vaccines but on ‘work from home policies.”
He said other businesses that were in a state of “protracted pain” was the retail sector, especially commercial retail and commercial real estate. “People are going to the mall less often, and this is good news for the e-commerce sector, (but) not for the commercial real estate sector. We have a situation where suddenly people are buying online,” the CEO said.
“It’s not that people are buying less stuff; they’re just buying them through different channels. Different sectors are impacted differently and we’ll see a strong recovery in some sectors and devastation in other sectors,” he said.
Grewer believed that the public and private sectors should be doing more to help small businesses. “One of the biggest issues we have is that there has just been a poor rollout of relief funds,” he said. “Far too few people have been able to access these funds. There are funds destined for SMMEs and they don’t get them.”
Grewer said that in order for SMMEs to perform well, the environment in which they did business must change. “We believe that we need to create an environment where SMMEs can thrive and a big part of that is through business rescue,” he said.
“In South Africa, failure is not a learning opportunity for businesses, but the end. If we are going to be serious and see sustainability in South Africa there needs to be a better and more conducive environment for businesses to do business and able to learn through failure rather than have it as a death sentence.”