3 out 4 SME’s will not survive lockdown beyond July, survey finds
The research was conducted just before the government announced level 4 lockdown regulations.
Picture: iStock
Businesses, whether large or small, have been heavily impacted by the Covid-19 pandemic. An entrepreneur research survey conducted by Heavy Chef, reveals the dire situation in which local business owners are currently experiencing.
The #CombatCovid SMME Survey engaged with 2,280 small business owners across South Africa to figure out the full extent of the damage on their livelihoods, with sales and movement the two main reasons why local businesses have been affected so widely.
The research was conducted just before the government announced level 4 lockdown regulations.
CEO of Retail Capital, Karl Westvig said: “The coming together of such a wide range of partners is unprecedented. In these trying times, it is encouraging to see a diverse collective of community organisations coordinate on a project like this with the true interest of small businesses at heart.”
The survey found two-thirds of the small businesses surveyed are ‘mature’ business (older than three years with healthy monthly revenue streams), 89% had a negative financial impact due to Covid-19 by indicating a sharp decrease in monthly income.
33% of the businesses estimated a monthly decline of between 75%-100%, the most alarming finding is that three-quarters of small business owners (across various industries) indicated that their business will not survive if lockdown restrictions go beyond 1 July.
Less than half of the small businesses applied for government and banking relief packages offered, a sign that businesses were either passive or untrusting of the Covid-19 relief options available to them.
Businesses that applied for relief packages, 68% were unsuccessful in their applications. Interestingly, 71% of the entrepreneurs surveyed expect they will require business funding when Covid-19 restrictions are relaxed, with more than half indicating they will need less than R100,000 of funding.
Lockdown has created uncertainty for many staff members, 66% of businesses surveyed have had to reduce staff salaries, with 71% stating a continued lockdown will likely lead to a retrenchment process.
Adapt or die
Online commerce has had a massive boom during the past two months, only 54% of businesses surveyed are making use of tech to work remotely and run their businesses.
Despite the global trend of changing business models, 64% of the business owners haven’t changed or adapted their businesses yet.
Heavy Chef CEO Fred Roed said: “This survey is a step in the right direction. We will continue to survey our community and track the trends over time. In the meantime, the results already point towards urgent and immediate action.”
(Compiled by Sandisiwe Mbhele)
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