The world has been affected by the coronavirus outbreak to an unprecedented extent. To curb the spread of the infection that has already taken hundreds of thousands of lives worldwide, governments are imposing various lockdowns and travel restrictions on their citizens. This has put a stop to many economic activities and has led to a spike in unemployment all over the globe. Travel, tourism, and hospitality sectors have been hit the hardest but many other small businesses are suffering the consequences as they simply don’t have the funds to keep going. Unfortunately, the situation is sadly no different on the African continent. Take a look below for more details and some useful advice that could inform small business owners during these times of economic strife and uncertainty.
What is the current situation in Africa?
The recent African Management Institute (AMI) survey shows that 87% of small businesses fear that they might not be able to survive the COVID-19 crisis. 67% have stated that their companies have been affected by curfews, lockdowns, and social distancing. What is more, 62% of SME owners have said that this pandemic made a big impact on customer demand while 49% claim that their product supply has been affected to a great degree.
The World Travel & Tourism Council (WTTC) figures show that Africa is expected to lose over 7.5 million jobs and the UN predicts that the coronavirus could cause almost half of all jobs on the continent to be lost.
The aforementioned AMI survey also emphasizes the need for liquidity that Africa’s small businesses have. Over 75% of entrepreneurs think that a loan could help them survive while more than 50% believe that a small loan no bigger than Ksh5.4m ($50,000) could be what makes the difference when it comes to surviving this whole ordeal.
What can Kenyan SMEs do to survive COVID-19?
Small businesses are vital for job creation and growth so protecting them during these difficult times should be of the highest importance. While some have, unfortunately, been forced to close down, there are still those that are doing their best to survive. What can these Kenyan SMEs do? Here are some key strategies that might help.
Rely on technology to keep the business going
In case a lockdown is in place and a certain business is not deemed essential, a company will simply not be able to operate. However, some businesses have the opportunity to make the most of current technology and keep working from home. Technology is very advanced nowadays and the employees can work remotely to solve any issues the customers might be having. This might also result in lower overhead costs for the company thus saving them some money, an essential element for going forward. Of course, not all kinds of businesses can operate remotely, but those that can, should embrace this aspect of technology to stay afloat.
Look for ways to retain your existing clients and reach a new audience
Something else Kenyan businesses need to do is look for a strategy that will help them keep their existing clients loyal. There are many ways to do such a thing and they can even follow the example of various South African companies when it comes to this. For instance, online casinos in South Africa know the importance of retaining their customers, which is why they provide many offers to their clients. One such offer is what’s called a loyalty bonus that rewards those players that play on a regular basis. In a similar vein, retail stores and restaurants in Kenya can consider offering their frequent customers vouchers, discounts, or some other type of gift and, in that way, turn them into loyal customers. Then, adjusting their marketing strategy is also a great way to not only keep the existing audience but reach a new one as well, as it can show people how devoted they are to fighting the coronavirus and staying safe.
Get in touch with their suppliers and creditors
Various businesses have suppliers that are necessary for running a company. If these suppliers go out of business, it’s critical to find new ones who can meet the same demand and provide products of the same quality. Likewise, banks, landlords and other creditors also need to be contacted to work out a payment schedule and see whether it is flexible. Seeing as how they also benefit from a business’s success, they might be willing to reevaluate their payment terms and conditions.
Better understand the government plans
Another step Kenyan SMEs should take in these uncertain times is closely follow what the government has planned. It is quite possible that it is offering a reduction of the turnover tax, loans, relief packages, or some other kind of financial support. It’s vital for small business owners to look into these measures and the requirements they need to meet in order to receive help.
This is not an easy situation that the world has found itself in. Many global systems will need to adapt and change in order to minimise the effects this crisis has had on all aspects of society. Even though small businesses are not in an enviable position, there are still ways how they can pull through and continue to operate long after this pandemic has passed.