As someone who is very involved with entrepreneurs in particular, what has been the impact of the Coronavirus pandemic on entrepreneurship in South Africa?
I think the effects of the Coronavirus pandemic on South Africa is wider and deeper than they appear at first glance. Lockdown and the shock of having to suddenly close down a business has had a massive psychological impact on entrepreneurs and small business owners, besides the more overt financial impact.
They were also under pressure to understand legislation, and to make sense of new regulations – for example the classification of essential versus non-essential services – which unfortunately provided little clarity as to how businesses needed to operate. Even as lockdown eased, various restrictions – such as curfews and closed borders – have remained in place, and business owners have had to find new ways of working despite these restrictions and sustained pressure on cashflow. They also had to take on the responsibility of making sure it was safe for people to return to work – for example they had to source, pay for and provide PPE and sanitising equipment – with health and safety compliance a bigger focus than might have been the case before.
All the while, outright cancellations of contracts, or even simply experiencing delays in payments due – whether from relief initiatives such as TERS/UIF, or clients experiencing their own cashflow crisis – have put a huge strain on business owners trying to retain their permanent employees.
What do you think entrepreneurs have learned from this crisis?
Well, the pandemic has caused businesses to reflect on being as agile as possible. For example, even non-IT enterprises had to quickly adopt a lot of technology in order to run their operations. This will inevitably change how they operate in future.
Small businesses owners have again realised the value of managing their debt levels and cashflow properly – not only to enable them to weather a crisis, but also to have funds available when a new opportunity presents itself. Financial compliance meant businesses could access relief funding, while non-compliance had the opposite effect.
Entrepreneurs and small business owners have again realised the importance of maintaining good client relationships – not only to keep channels of communication going during a crisis, but also to provide opportunities to diversify their offering when those same clients’ needs change.
The unfortunate reality of large enterprises retrenching employees has created a positive upward trend of new small businesses starting up.
And the closing down of borders has brought a new focus on localisation – in terms of local manufacturing and supply – which could bring new opportunities to entrepreneurs who understand the needs in the market, and can respond with innovation.
What has been the impact of this crisis on the social impact space in South Africa?
One good thing about the stark reality of the health and economic challenges facing families in this country, is that it has caused social consciousness in general to increase. Enterprises large and small have realised that whether society is doing well or not has a definite impact on their business. However, most are facing a keen balancing act between achieving economic growth and having effective social impact.
Of course NPOs have faced similar pressures to business owners in having to adapt to changing regulations and trying to keep operations going while having less (or no) sustainable levels of funding. But I do foresee greater support for social impact initiatives going forward.
Any closing insights?
South Africa needs nation builders during this time, especially business leaders who are action-oriented. There are tough economic times ahead, and we need leaders who are able to build strong partnerships and wisely deploy their business resources to bring about change. This is not the time to point fingers or blame others, but to do what we can. Entrepreneurs are leaders – and leadership means being able to cast vision, to motivate people, and to have a positive impact in business and society at large.
Shawn Theunissen will be presenting at our 6th Annual In Good Company Conference on the mornings of 17 & 18 September 2020. Book here!
Shawn plays various roles within the property and enterpreneurship ecosystems in South Africa and abroad. He is responsible for Corporate Social Responsibility (CSR) at Growthpoint, where he oversees the transformation, sustainability reporting, CSI and enterprise development portfolios. He is also the founder of two social enterprises: Property Point and Entrepreneurship To The Point. The first is an entrepreneurship incubator for small businesses in the property development value chain. Property Point has been around for 13 years, and gives small, medium and micro enterprises (SMMEs) operating in South Africa’s listed property sector a toehold in a highly competitive marketplace. The initiative provides entrepreneurs with training and support, to enable them to develop their enterprises into fully independent companies. The second is an information platform to equip and empower entrepreneurs, for example through masterclass webinars and content on their YouTube channel.