Many challenges, but a lot more opportunities
The PSG Think Big Series, hosted by award-winning financial journalist Bruce Whitfield and top PSG executives, addresses burning issues that are concerning South Africans in these uncertain times.
During a PSG Think Big Series webinar, Mike Stopforth - Founder and Director of Beyond Binary shared his outlook for local Small and Medium Sized Enterprises (SMEs).
South Africa’s current economic climate is a challenging one for SMEs. The discussion focused on how different stakeholders can assist in creating an environment for this sector to thrive, to alleviate the scourge of unemployment. In addition to this, he discussed the challenges faced by SMEs in the current environment, and how they can be managed, and essential strategies for SMEs to navigate digital disruption and thrive in the future.
Challenges faced by SMEs
“Uncertainty and challenges continue to abound, and for many entrepreneurs and business owners’, times have been tough,” said Stopforth.
“Running a business in the current economic environment requires a profound level of skill and is difficult under normal circumstances. Add in the rapid acceleration of digitisation and the complex working environment created by the onset of the pandemic, the number of variables that business leaders need to consider has increased in rate and complexity. The biggest challenge facing entrepreneurs is how to build a business that will thrive in a future that looks very different to anything we could previously have imagined,” added Stopforth.
Stopforth provided five tips for entrepreneurs and business leaders who are thinking about how to build value in the years to come.
Basic principle of good customer service
“COVID-19 has accelerated the adoption of digital transformation in both local and global businesses because, as we’ve seen, there’s nothing like necessity to fuel innovation. Technology is, however, not a solution. Neither is it a magic wand or a panacea. It is an enabler,” he said.
“What this means for small businesses is that investing in digital technology is not an end but a means to an end. There are opportunities for businesses to scale dramatically using technological tools, but there are foundational, underlying processes and operations – the basics – that need to be nurtured before we add the “digital layers.” Just investing in AdWords advertisements or a WhatsApp Business Account is not going to reap positive returns in and of themselves. Entrepreneurs need to remember that their customers are the lifeblood of their business, so why would they not put all their resources into finding out how to provide a service that meets their needs? In an age of complexity, we need to get back to basics,” he continued.
“Think about who you are trying to sell your product or service to, what stops you from converting leads into sales and how you can change their minds. Ultimately, we need to be super critical on what works and what doesn’t. We need to base our decisions on research and fact-checking rather than making assumptions about our customers. Solve those problems, then drive your strategy forward with digital tools, if digital is where your audience is, instead of doing it the other way around,” added Stopforth.
Stop making excuses
Stopforth encourages small businesses to ask themselves what their businesses would look like if it were built from scratch today. Then, to ask how that dream, or business idea, is different from the one that currently exists. The third question is what their excuses are for those differences. Are they good excuses or are they related to legacy issues that were “inherited” from the past?
“Let’s interrogate the quality of our excuses and judge an entrepreneur by the quality of their excuses. These kinds of questions could be the basis of how entrepreneurs can find a way to disrupt themselves, before they are disrupted by the biggest threat – a group of emerging, well-funded, talented and highly motivated people who have a disruptive idea that could put even the greatest innovator out of business,” he said.
Manage energy like you manage time
“In a world that is transforming faster than anyone could ever have imagined, small business owners need to manage their energy as diligently as they manage their time. Try pretending that new legislation restricts the working day to no more than two hours. Business leaders should ask themselves how they would spend those two hours, focusing their energy on only what is most productive, most valuable and most constructive. Then, they should try and extrapolate that division of time over eight hours. The result, very simply, would be an illustration of what the best use of their time looks like,” said Stopforth.
“Spending time on things that are out of your control is perpetually energy-sapping. As an entrepreneur, you must manage how you spend your energy. You have to spend it on doing things that are valuable – to reconnect with your intent and your purpose as a business owner,” he added.
Foster a positive and proactive attitude
“Ability is important, but attitude can inform ability. The pandemic caused many business owners to reach an inflection point where they felt compelled to think very critically about whether their business can create value for the next three to five years. For many, the solution was to pivot – to double down, get back to basics and make difficult and often painful decisions around killing “legacy thinking” and the assumptions they made that the status quo cannot be challenged – because it can be,” emphasised Stopforth.
“As a practical example of this radical approach, consider floral and gift delivery service, NetFlorist. With the onset of the pandemic, NetFlorist was faced with the difficult reality that within a few days, its core business proposition became obsolete. Within 48 hours, the leadership of Netflorist had explored how to deliver fresh fruit and vegetables using the same cold-chain supply and processes they used for their flowers and gifts,” he said.
At pertinent moments of disruption, Stopforth said it’s about ascertaining the value you already have in your assets as a business and changing direction. With the right attitude, you can achieve anything.
Good marketing produces results
“When investing in digital as a marketing tool, business owners need to bear in mind what the desired outcome for each of those tools is, and this is what needs to be communicated to marketing teams and consultants,” explained Stopforth.
“As an example, when I was CEO of Cerebra, where I sanctioned the spending of substantial budget on producing content like e-books. Ultimately, this investment did not reap the returns that were needed, and the company spent a lot of money on marketing to the wrong people. It was more profitable to pick up the phone and ask for a meeting with 150 of the correct people than to invest thousands into intricate marketing campaigns that didn’t hit the mark. In that instance, the solution lay in nothing fancy, but something effective, Stopforth added.
Nirdev Desai, Head of Sales at PSG Wealth concluded the webinar by reflecting on how disruption affects change and how today’s entrepreneurs have a unique challenge in terms of choosing to see opportunity within a competitive and often volatile business environment. “South Africans are blessed with innovation and opportunity. We can compete with the best in the world, and our banking environment is a prime example. In the investment world, we’re seeing investors in the South African stock market reaping positive results, so the evidence is there – ours is a land of many challenges, but also many opportunities.”
Writer’s thoughts
As SMEs position themselves for growth, all organisations in the sector have a role to play in protecting their businesses and mitigating risk. Only then can the economy truly reap the benefits. With the proper risk management plans in place and the appropriate insurance cover in place SMEs can grow and prosper. Do you agree with this? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
