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Over the past few years, small and medium enterprises (SMEs) have faced a tough operating environment. Many of these risks have materialised and negatively affected the economy and employment.
However, in the final quarter of 2024, businesses began showing signs of recovery, thanks to a prolonged period of uninterrupted power supply, amongst other factors.
Area Manager at Business Partners Limited, Megan Dedekind says it is crucial for SMEs to remain prepared for any potential challenges”.
She outlines five tips to help entrepreneurs build resilience and navigate emerging risks in 2025:
She says maintaining cash flow is important for the survival of SMEs as it enables the payment of staff, operational expenses, strong relations with suppliers, and investment in growth opportunities.
Diversifying sources of income is the most secure strategy to mitigate market fluctuations or economic downturns that could erode profit margins.
“Expanding income sources enhances financial predictability and supports sustainable growth because it leaves room for error.”
Dedekind advises SMEs to implement sound financial practices like budgeting, controlling expenses, and efficient invoicing.
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She adds that in 2024, the South African business landscape saw the wide adoption of advanced technology such as artificial intelligence (AI), cloud computing, and machine learning.
“A vast 87% of South African SMEs believe digitisation is a key driver of growth, however, small businesses are still adopting new technology reactively with over half reporting not being prepared for a digital future.”
Dedekind stresses that relying on outdated operations slows SMEs down, costs them time and money, and disadvantages their customers.
In an increasingly competitive marketplace, this is an area entrepreneurs need to become proactive about.
Dedekind says investing in upskilling and reskilling employees is important to ensure they are prepared to adapt to industry changes, technological advancements, and shifting market demands.
“Offering continuous training and reskilling opportunities, particularly in digital literacy and emerging technologies, can empower teams to work more efficiently with innovative solutions to challenges.
“Businesses prioritising employee development also see higher productivity, loyalty, and engagement.”
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She adds that 2024 revealed a trend toward value-driven consumer behaviour, with customers seeking personal, meaningful interactions.
SMEs that focus on excellent service, reward loyalty, and address customer pain points are likelier to retain and grow their client base.
“With the amount of consumer data freely available to businesses, SMEs must adopt a customer-first mindset, understand their customers and use their feedback to tailor all products, services, and communications.
“In a competitive environment, adopting a customer-centric approach that’s not just about selling a product but creating a relationship will set any business apart.”
Dedekind says resilience-building strategies must encompass comprehensive risk planning to assess and mitigate emerging risks, including cyberattacks, regulatory changes, and climate-related disruptions.
“With half of global cyberattacks targeting small businesses, South African SMEs face a growing need for cybersecurity frameworks.
“SMEs should build resilience by adopting risk management frameworks, implementing scenario planning, securing insurance, and setting up contingency funds.
“Resilience is about readiness. By planning for diverse risks, SMEs can safeguard their operations and maintain stability in an unpredictable world,” she concludes.
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