South Africans can hardly turn on their phones without being bombarded with updates about the next step in the economy’s apparent race to the bottom. What a relief then to hear a voice saying: Now is not the time to panic!
Themba Mabizela, First National Bank’s business head for Gauteng South and Central, is not suggesting there is no reason for alarm. What he is saying is there are better things to do than panic at a time like this.
In a statement released on Thursday by the bank, one of South Africa’s ‘Big Four’, Mabizela noted the International Monetary Fund’s recent view that economic growth in South Africa this year and next was unlikely to surpass 0.8 percent after registering only 0.3 percent in 2016. He acknowledged that consumer spending was likely to remain fragile due to stretched household budgets and high debt, and agreed that businesses would eventually feel the impact.
But, he said, rather than panic, what was needed now was focused and decisive action. He suggested the sort of action that might bring to mind the old African proverb: “If you wish to move a mountain tomorrow, you must start by lifting stones today.”
Mabizela’s first piece of advice for testing times like these was: Stick to your core business and focus on ensuring excellence in delivery.
With this in mind, he said, businesses needed to be both innovative and agile. He recommended study of the market, urging business people to stay informed so as to avoid the danger of operating in a vacuum.
“Like in any tough environment, there are lessons to be learnt, as well as tactics a business can use.”
Even more than usual, Mabizela added, now was the time to keep an eye on costs. “Keep the business running lean, reduce all forms of unnecessary expenditure.”
Another basic principle to stick to was strict management of cash flow.
“As any successful entrepreneur will tell you, cash is king,” he said
“Managing cash flow ensures business fluidity by ensuring that the day-to-day running of the business can be financed with ease, and also allows the business to create room for a quick response to the market,” he added.
Then, of course, there are the customers. Mabizela reminded business people that keeping customers happy was especially important in an economy where buying power was under immense pressure.
“Each sale is a contribution to a more positive bottom line … Customers need to be made to feel that spending their money in your business is worth it.”
It is not all doom and gloom, though, as Mabizela says, challenges can be “reframed as opportunities”.
“Stay true to your business strategy, keep abreast of developments and proactively manage all aspects of your business – that mountain will eventually move,” said Mabizela.