AMBROSE BATSWALELANG*
The State of Emergency (SoE) in Botswana came to an end on the first of October 2021. COVID-19 taught us the importance of factoring in the internet and digitization into business processes. It has highlighted the importance of a contingency and survival planning. The pandemic impacted the global economy dismally and small and medium businesses took the hardest knock. The majority of these companies did not have measures in place to weather financial storms let alone one of this magnitude.
Small and medium sized enterprises play a vital role in the society’s social inclusivity, local employment, and development in rural areas. Their survival is mandatory for building an empowered and self-sufficient nation.
Some of the major challenges small businesses faced and part of the reasons why they failed to stay afloat are: disruptions in supply chains, cash flow challenges, less demand for certain goods and services, failure to meet delivery dates, and lessened risk enthusiasm by financial market. Experts cited that most small businesses identified the following as their biggest sources of struggle currently: loan repayments, salary payments, and rent.
First and foremost, successful and stable businesses should have a solid business plan with a comprehensive marketing plan and accurate financial plan which will allow you to better understand the intricacies of your business and be in a better position to make it a success. Furthermore, it will make it simpler to access financial aid from potential investors and government schemes.
Earlier this year, the president of Botswana, His Excellency, Dr. Mokgweetsi Eric Masisi announced that small businesses would soon be able to operate from home without licenses. This eliminates a barrier to entry and presents an opportunity for small businesses to be started with ease and those existing to increase profits. Capitalizing on initiatives presented by the government is a sure way of ensuring your business grows. Albert Einstein once stated that “in the middle of difficulty comes opportunity.” Even in difficult times, opportunities for growth, development and increase among SMMEs can still be found and taken advantage of.
Additionally, there are a few things that small businesses may consider in order to survive. This can involve spending less on rental by occupying smaller office spaces, sharing office spaces, adopting lean and mean structure, and for some, opting for solar energy as opposed to generators. SMMEs can also encourage their staff to work on alternating days, strictly work from home, execute temporary pay cuts, or have staff rotations. SMMEs highlighted the following as desired solutions for their business challenges: lower interest loans, and the relaxation of loan payments. If small businesses are going to survive, they require the collective efforts of all sectors.
Moreover, developing a solid financial plan is important for the sustenance and longevity of a business. At this time, businesses may have to revisit their financial plans and begin identifying alternate streams of revenue. Getting more funds into the business through diversification will be paramount for the survival of small businesses at this time. A small online boutique that has been specializing in selling clothing may now diversify and begin selling wigs and weaves, and a tuck-shop lady who has strictly been selling sweets and salty snacks may begin cooking lunch for her customers.
At this point-in-time, businesses will have to reconsider their expenditures. Going back to the financial plans and identifying costs that are not imperative for the day-to-day operations of the business will be vital in helping owners spend less and retain more profit. This profit can then either be reinvested into the business or placed in the company’s reserve.
A good credit score is very important for small businesses. Acquiring funding is a key way for businesses to expand, therefore, diligently paying back creditors and using funds received to grow the business will make it more attractive to both funders and investors. A credit score is a numeric representation ranging from 300 to 850 signifying how likely you are to pay back the amount of debt you incur.
*FirstCred COO