The South African economy slipped into recession for the third time since 1994 After two consecutive quarters, the economy retracted and going forward, this will impact small and medium-sized enterprises (SMEs).
Andiswa Bata, FNB business regional head for Gauteng said many small businesses outlook is looking gleam not only because of the state of the local economy but also lower forecast for economic growth globally.
Bata provided strategies that businesses can use to navigate during tough times:
- Have spare cash: This can help your business take advantage of opportunities, survive unexpected knocks and help your business remain competitive even when the market and the economy are struggling
- Inventory management: Make sure your goods in stock are in buyers’ hands as quickly as possible, reduce operating costs to free up the cash you have in the bank for investment in the right opportunities as they arise
- Think of other ways to cut costs: Consider sharing or renting office space, instead of buying new equipment buy used or rent out equipment or tools if buying them new is too costly. Review your operating model, use more technology to improve productivity and efficiency
- Look for the gap in the market: Where are the opportunities in the market? Tailor your offerings to meet those new demands and know what customers are willing to spend on
- Take advantage of the market: Lower economic growth means lower interest rates, where appropriate, take advantage of this for investment.
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