KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES
Category SMMEs
SUB CATEGORIES General | 

Lessons from a Lockdown: One Year on

23 June 2021 Business Partners Limited
Arnold February, Regional Investment Manager at Business Partners Limited

Arnold February, Regional Investment Manager at Business Partners Limited

A closer look at businesses who managed to pivot, highlighting the true resilience of South Africa’s SMEs

It has been more than a year since South Africa’s nationwide lockdown was implemented in response to the global COVID-19 pandemic. Lockdown put major restrictions on the movement of all citizens, as well as on business operations, as an attempt to curb the spread of the virus.

As the country moves back into level three lockdown restrictions, and phase two of the vaccination programme begins, it seems that a post-COVID-19 world is still some way off. In the South African business world, the past year has seen a significant shift in the way that small and medium enterprises (SMEs) operate.

This is according to Arnold February, Regional Investment Manager at Business Partners Limited (BUSINESS/PARTNERS), who says that – especially for entrepreneurs, who are by nature agile and always seeking opportunities – difficult times tend to cultivate resilience and can even lead to innovation, serving as a catalyst for positive changes within a business.

He explains that new COVID-19 safety protocols have altered the way that companies interact with their employees and customers. The SMEs that have successfully managed to adapt and pivot in response to the rapid changes of the last fourteen months, have learned some invaluable lessons that could benefit their operations in the long-term.

“What we saw from our Business Partners Ltd clients that did well during the lockdown, is that they managed to successfully adapt their business model or operations to match their clients base. Another response that paid off was looking at cost efficiency – whether it was through implementing better measurement of output or through things like apps.”

February points to an example of a business he works with who managed to successfully pivot – a line of daycare centers. “In response to the new dynamic of work-from-home, they changed their time frame for their daycare services to meet the parents’ new timetables. In doing so, they’re matching what they offer to what their clients need. Since it’s a safe assumption that many potential customers are going to continue working from home indefinitely, this means the business has now opened itself up to a new client base in the long term.”

For one hardware centre that Business Partners Ltd works with, social distancing, curfews and the reduction in customer movement could have spelled disaster. “However, they managed to successfully pivot by adding a delivery element to their service – delivering not only to individual households but also to other businesses and tradesmen who required larger orders. This ensured that the store could keep its sales numbers up, and in so doing also helped its customers to reduce the disruption of the lockdown on their own operations.”

A common thread among those businesses that managed to adapt successfully was that they took a cue from their customer base when adjusting their operations. “The answer to a rapidly changing environment is to become even more customer-centric. In some cases, SMEs opted to change their business models completely as their best means of survival.”

He notes that companies in the property industry were especially under pressure to pivot their business model significantly. “A client of ours with a lodge and a conferencing facility was hit quite hard by the collapse in the tourism industry. They saw an opportunity in partnering with a frail care facility and converting their business into a retirement village. Initially there were a few compliance hoops to jump through, but the changes could benefit them in the future.”

Another client who operates a guesthouse changed their client base from business and leisure travelers to hospital visitors and healthcare employees working at a nearby medical centre. Other tactics that February noted worked successfully were shifting target audience, making the most of a business’s location, imparting more trust on staff, and adopting new health and safety protocols swiftly to use as a competitive advantage.

In closing, February says that the lessons learned by companies adjusting to the pandemic, could also help both new and existing SMEs to build more resilient operations. “The world has changed irrevocably, and we all need new approaches. Luckily there are enough examples in the market to look to for inspiration and guidance,” he concludes.

Quick Polls

QUESTION

Each year ordinary consumers and their financial and wealth advisers flock to dozens of asset manager ‘outlook’ presentations to find out about economic and investment trends, and the next ‘hot’ company. What do you want asset managers to share during these events?

ANSWER

Asset allocation strategies
Big picture investment themes and how to position portfolios for them
Investment methodologies and historic fund yields
Share tips by the score
fanews magazine
FAnews June 2022 Get the latest issue of FAnews

This month's headlines

A free smoothie does not make a loyal customer
Consequential loss policy court cases
Everything you need to know about death, disability and severe illness cover post-emigration
Are advisers doing all they can for clients’ portfolios?
Financial advisers need help - navigating the complex ESG fund environment
Subscribe now