Small business, big setbacks: worries set in as lockdown looms

26 March 2020 - 06:00
By Deepika Naidoo
Where to go for small businesses, with the national shutdown looming? Big calls must be made.
Image: Photo supplied Where to go for small businesses, with the national shutdown looming? Big calls must be made.

As SA prepares for lockdown, to empty the streets and stay at home, small businesses across the nation are grappling with big questions.

How will they recover economically? How do they continue running their businesses? And which businesses, exactly, count as essential services?

According to John Dludlu, the executive for strategy and public affairs at Small Business Institute: "Two years ago, research we commissioned found that formal micro, small and medium sized firms employ 3.9 million people or 28% of all formally employed people."

Though the beauty industry is not categorised as providing essential services, going to the beauty salon forms part of everyday life for South Africans. And many working in the sector are worried about what comes next.

According to InvestSA - a division of the government's trade and industry department - the beauty sector employs more than 50,000 people and produces retail revenues of R25bn a year.

Glen Lake, a 30-year veteran of the industry who runs Glen’s Beauty Salon in Durban, says though she believes the shutdown is necessary, she is worried about her finances.

“Due to this unforeseen national  and global crisis, I am worried that I won’t be able to service my bond. I have been a self-employed beauty therapist since 1990. I have four dependents and a domestic worker with her own dependents who works in the salon. If my business were to close down she would have nothing,” said Lake.

“My 21-day plan is not to panic and to pause for reflection. I am going to pray to God that this passes,” Lake added.

There has been some hope, however, despite the financial uncertainty.

Standard Bank, Nedbank and other banks recently announced that they would allow their small- to medium-sized business clients to take a three-month payment holiday.

In his speech announcing the lockdown on Monday, President Cyril Ramaphosa confirmed that billionaire families the Oppenheimers and the Ruperts had donated R1bn each to help small businesses during the national shutdown.

Vanesan Govender, director of Accensis, a Durban-based firm that offers services such as auditing, accounting, consulting and tax, said the payment holiday offered by the banks would help their clients. Accensis itself banks with Standard Bank.

“We don’t fall into the categories that Standard Bank has stipulated, but our clients do. I believe that it will benefit the small businesses that use our auditing and accounting services. There is a possibility for a positive future,” said Govender.

Shortly before the shutdown, Accensis had tested running its business remotely with 38 employees. According to Stats SA, 22.1% of small businesses already run remotely.

“We are lucky that we are one of the few businesses that can operate from anywhere as long as there is an internet connection. Though we won’t be fully operational, part of our business, such as the accounting side, is still fully operational,” said Govender.

Lordwish “Lolo” Sethole, owner of Reatlegile Food Services, still finds some hope in the situation.

Sethole has been in the catering industry since his university days in the 1990s and now operates a cafeteria on the University of KwaZulu-Natal's Howard College campus. His business had only been open two weeks before student protests - and now the lockdown - ground it to a halt.

“There will be major losses to my business, I won’t lie. Fruit, vegetables and meat will rot, cool drinks in cans do expire. But I do believe it is not about individual businesses, as global health is more important,” said Sethole.

He said he took his health seriously. After the first case of coronavirus was announced in SA in early March, Sethole said he didn’t take chances when an employee came to work with a cough.

“I went to Dis-Chem to get a blood test immediately. I am not taking any chances. I believe I am paranoid. I think that paranoia assists humanity from not being careless,” he said.