Entrepreneur Survival 101 - The South African Recession

Reach new heights

News And Articles

Entrepreneur Survival 101 – The SA Recession

Entrepreneur Survival 101 – The SA Recession

Table of Contents

Dr Thommie Burger is the Founder of JTB Consulting

Author

Entrepreneur survival is vital to ensure the growth of an economy. Nearly every business has felt an impact from the recession. There has been no escaping. A few weeks ago, the word ‘recession’ was used in nearly every newspaper and online news… South Africa is in a technical recession. Nearly every day we as South Africans are inundated with negative news on both the economic and political front.

But there is nothing small business owners and entrepreneurs can do about this ‘bad news’. It is what it is! You have no choice but to adjust, cope, and survive.

Some small business owners believe they’ve seen the bottom and they are surviving — they are OK and they expect to persevere with modest adjustments. These small business owners are kidding themselves. The ‘bottom’ has not been reached, and it will be a long slide until it does. Whether you look at market indicators like the stock market, GDP growth, or whether you focus on the political turmoil and corruption, recession or not, this ‘recessionary-type’ market is, in my opinion, here to stay for a while longer.

So, what can you do?

Here are some tips:

  1. Defeat the downturn: During such times, it’s easy to panic. Panic, which is fear-driven and not based on fact but on emotion, has tremendous power, the power to change the direction of the business. But do you want to give in to panic, throw your hands in the air and accept self-destruction, actually accelerating it, becoming a part of the panic, stimulating more? There’s an alternative to panicking. We are confronting change, and change is an opportunity for advances. Now you have the choice to take advantage of change it or allow yourself to be buried by it. Make the right choices today and see the results tomorrow. It’s not just about adjusting prices – you need to broadcast your differences, tell people why they should shop with you, provide them with added value, and not discounts, and watch your business grow in a down market. Be a leader, and the people will follow. As a small-business owner, you can help lead the way out of the recession. Start with your employees, move to your vendors, and then support your customers and your market area. Announce the good news, and everyone will line up.
  2. Evaluate and eliminate excessive debt. If your revenues have dropped, you may not be able to service the debt you took on when your revenues were much higher. Any debt can be worked out – secured debt, business loans, asset finance, trade finance, lines of credit, and even leases.
  3. Downsize. If you haven’t already, reduce your headcount and overhead. You can deliver the same amount – or more – by increasing productivity.
  4. Track your finances daily – and start today. Install a key indicator system to track your business and have daily, weekly and monthly financial reports issued. Follow profitability per job, per week, per client, per product, per service. Use these indicators to focus on your most profitable products or services. Cash generation is key. 
  5. Reduce inventories and overhead at any cost. Look for items that do not move or turn frequently. That’s where your cash is locked up – in your cost of materials, labour, and so on, waiting to be turned into cash after it’s sold and the receivables collected. This can result in a huge cash drain.
  6. Train and cross-train your staff. If every job or task is learned by at least one additional person, when the primary person is out, the secondary person cross-trained to perform the task can leap in and save the day. And so, work continues, and productivity remains high despite the absence of a key player. Smoother production, greater productivity and happier customers mean a better bottom line.
  7. Resist profit-eating sales and discounts. Don’t give away your product; instead, compete with service, quality and uniqueness. Create a niche and have a competitive advantage. 
  8. Manage effectively. This means tracking and analysing key indicators, financial reports and productivity. Get smaller first and more profitable; then grow slowly and carefully.
  9. Focus on quality. That’s what wins in the long run. Never forsake this principle. Get better, get smaller or be forced out. It’s your choice.
  10. Drop unprofitable customers. The natural urge is to hang onto every customer, but use the spare time the recession provides to analyse your customer base and find out which ones are the most profitable and which ones are costing you money.
affordable business planbest business planbusiness plan assistancebusiness plan consultantbusiness plan consultantsbusiness plan creatorsbusiness plan pricesbusiness plan servicebusiness plan writerbusiness plan writersbusiness plan writingbusiness plan writing companybusiness planning companiesentrepreneur survivalprofessional business plan

Established in 2006, we have successfully written hundreds of bankable and world-class Business Plans for clients across 25 countries. As South Africa’s Leading Business Plan Company, we are confident that we would be able to assist you too. Kindly note that we also offer “Investor Pitch Decks”, “Excel-based Financial Models”, and “Proposal/Tender Writing Services” in addition to our Custom Business Plan Writing Service. Please visit our Services page for more information.

We look forward to being of service to you. Please feel free to contact our Founder, Dr Thommie Burger, on +27 79 300 8984 should you have any questions. He is also available via email and LinkedIn.

JTB – Your Business Planning Partner.

Share this article…

Recent Articles

SWOT Analysis and 50 Urgent Questions to Ask (Our Free Checklist)

SWOT Analysis and 50 Urgent Questions to Ask (Our Free Checklist)

Every business owner should conduct a regular SWOT Analysis to assess the company’s strengths, weaknesses, opportunities, and threats in relation to its competition. A SWOT Analysis helps evaluate where a company stands in a competitive market and what steps need to be taken for further strategic planning, helping decision makers draw a future roadmap for the company.

Top 3 Reasons Why A Business Plan Is Essential For SMEs

Top 3 Reasons Why A Business Plan Is Essential For SMEs

For entrepreneurs, especially small businesses, a Business Plan can act as a strategic tool to make informed decisions, especially better planning decisions, and meet short- and long-term business objectives. A business plan is often referred to as a blueprint or roadmap; without it, one can still travel, but with a map, one can reach a destination much quicker and easier. Companies rely on Business Plan Writing Services to keep businesses on track for a more detailed and strategic guide. Let’s look at how having a business plan can help your business in the competitive global market.

How to Hire an Effective Business Consultant

How to Hire an Effective Business Consultant

The role of a Business Consultant is often misunderstood. Some business owners see them as snake oil salesmen only out for their own good. In this blog post, we explore what exactly a business consultant does, how they can help you and some tips on how to find the right one for you.

What we do.

We are South Africa’s leading Business Plan Company providing world-class Professional Business Plans to local and international clients, ensuring total satisfaction at every step. With extensive industry experience and the latest market insights, our qualified team of Business Plan Consultants are the first choice of serious entrepreneurs.

Subscribe to our newsletter.

Stay informed and opt-in for our newsletter via email. We respect your privacy and we never spam.