SMEs tend to be the hardest hit in a recession. Colin Timmis, general country manager and professional accountant at Xero South Africa, can’t explain this better than the uncovered impact of Covid-19, where many small businesses are on the verge of collapse.
In a 2020 medium-term budget policy speech, Finance Minister Tito Muboweni described the economic outlook for SA as somewhat bleak, largely due to the surge in government bonds.
SMEs play an important role in job creation and growth and therefore need to close the hole again.
Xero has been researching the current state of South African SMEs for the past five years. In this year’s report, we used findings and advice from industry experts to highlight key areas that SMEs need to focus on for recovery.
The study, conducted by market research group World Wide Worx, surveyed 400 small business owners.
Xero, along with some of the collaborators in the report, identified six trends that will be very important in the next 12 months. Let’s take a closer look at each trend and the opinions of co-editors.
Hone your technical skills – Colin Timmis, Xero
Almost all SMEs are adopting the technologies they currently rely on, with 97% investing in new technologies in 2019. Cloud accounting surged from just 13% in 2017 to 61% in 2020, showing the strongest growth. Manage their finances remotely.
Still, more than two-thirds (67%) of respondents admit that they are having a hard time finding the right people to implement their digital strategy.
Many companies still lack the skills to support the transition, and governments and tech companies need to work more collaboratively to close this gap.
Early in the pandemic, we chose a technical solution that would allow many to continue working. Since then, it has become clear that we have been in this situation for a long time, and companies need to be very careful in deciding which digital solution is best for them.
Start adopting technology – Nicole Rousseau, PKF Ignite
“It’s important to understand what we’re trying to achieve by adopting new technologies,” Rousseau said. “Once you have defined your goals and objectives, you need to reach out to experts in your area to help you find the right technology for your business.
“Every business needs to choose technologies that help them achieve their unique goals. They need to plan their processes well, create realistic and achievable implementation plans, and keep them simple. , We recommend that you use a step-by-step approach. “
Happiness Protection-Mike Anderson, National Chamber of Commerce and Industry (NSBC)
According to a Xero survey, 79% of business owners are experiencing stress as a result of their work, which will only be exacerbated by the challenges posed by Covid-19.
“Protecting the well-being of you and your team is the key to staying productive and resilient,” Anderson said.
“Normalize the fact that the current situation affects mental health, show the support available to all employees, and make sure everyone knows who they can rely on. Get in, create healthy routines, listen to yourself and others, and be flexible. No one has ever experienced this, but we will experience it together. “
Connect Anywhere-Arthur Goldstuck, Founder and CEO of World Wide Worx
According to Goldstuck, tomorrow’s small business is also home and away and can work just as effectively from a home office, office building, or beach.
“To participate in this trend, find out if processes, systems, services, or management are fully digitized, stored in the cloud, and accessible from anywhere.
“Connectivity is at the heart of the digital future. Relying on one form of broadband access for small businesses is no longer enough. Backups, or unfortunately what ISPs call” redundancy, “are very much. Is important to. Make both fixed-line and mobile options available at all times to ensure your business doesn’t stop suddenly due to load limits or cable breaks. “
Embrace new ways of working through innovation – Fred Roed, CEO of SME Network Heavy Chef
Roed is encouraged by the signs of innovation he has observed within the Heavy Chef entrepreneurial community.
“Overall, we see entrepreneurs adapting their business to the post-covid era. We see a remarkable resurgence of creative pivots, by-products becoming the main product, innovative partnerships. And I am witnessing the launch of a new product.
“This year was a disastrous year, but I think the challenges faced in the entrepreneurial sector will open up some amazing new channels of innovation.”
Building an Online Presence – Kristen Buttress, Owner, Kristen’s Kick-ass Ice Cream
Buttress believes that setting up an online presence should be the goal of all small business owners, if possible.
“Most customers are at home and looking for something to do on their mobile phones. To increase your brand awareness through social media and other outlets that can generate your brand’s exposure. Spend your energy. Now that we’re out of the blockage, people want something like normal, so adapt your offer to attract people to your brand. “
South African SMEs are the lifeline of the local economy, but they are the most vulnerable. In the coming months and beyond, we all have a role to play in helping rebuild the SME sector.
“Faithful to their entrepreneurial spirit, business owners have shown a solid determination over the past few months. SME owners have extraordinary adaptability, impetus and innovation in the most difficult situations. We’ve been demonstrating. It’s not time to ease, as we have to maintain this momentum, “Timith said.
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Six Factors to Help SMEs Recover Next Year
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