Picture: 123RF/AMI KISHIYEV
Picture: 123RF/AMI KISHIYEV

When your car battery is flat and the engine won’t turn over, carefully connected jumper cables are an easy solution to get your vehicle sputtering into life again. It’s clear that we need similar swift solutions to jump-start business engines to achieve an economic recovery as SA faces its worst decline yet in economic activity.

Though the private sector alone cannot avert the economic tsunami ahead, practical interventions and tools are available that can help save businesses, jobs and livelihoods, while saving lives.

The pro-bono Covid Business Rescue Assistance (Cobra) initiative and its collaborative team of experts are using four core principles to help distressed businesses jump-start their engines for survival and growth.

Most SA businesses are grappling to adapt overnight to a vastly different socioeconomic environment, and there are heartening insights available in determining whether a business should jettison, uplift, mothball or pivot their services and products, or simply start something new.

Those that are facing demise should fold quickly to protect the underlying assets as a resource base to start something new

This JumpStart approach, developed by Cobra leadership with partners Invest Africa, acts as a financial triage to evaluate businesses. It looks at the effect of Covid-19 disruption, assesses what form of assistance each business needs, and develops practical steps for their current and future survival.

Many SA businesses have been heading for distress  for some time, and the pandemic has made things worse.  Any government support and relief packages must be drawn from the R500bn available, which will certainly not support the needs of all 700,000 SA businesses and repair the damage to livelihoods caused by the pandemic.

This approach requires an uncomfortable confrontation with the fact that not every business will survive this crisis. Those that face demise should fold quickly to protect the underlying assets as a resource base to start something new. Most businesses entering this “jettison” phase are encouraged to grasp opportunities that are now available within the economy.

Businesses that are at high risk of folding should draw inspiration from the expanded demand for personal and public protection equipment such as face masks and thermometers. Though already overcrowded, the growth in this sector offers encouragement to seek high growth opportunities in other sectors.

Opportunities abound in logistics and home delivery services as shoppers use online and e-commerce offerings as part of their efforts to flatten the curve. In addition, cleaning and sanitation — particularly of office buildings — is a further area of expansion given that the essential service of thorough and frequent sanitising will be required in all workplaces for the foreseeable future.

Compulsory requirement

Made in SA, the Ully-Pully footplate door handle is a superb example of simplicity, relevance and speed to market. Opening a door in a public place, restroom or office space is now replaced by the simplicity of the Ully-Pully footplate, to open a door without the risks of catching viruses and bacteria.

The jettison process should be a rapid one, and if done within the Cobra ecosystem, it can be. Cobra is now authorised to issue Rule 41A certificates, which are a recent compulsory requirement certifying, for example, that a bank has sought mediation and aid before approaching the courts for liquidation.

If there are prospects of success in continued operations, businesses should carefully consider whether it is viable to uplift to survive and grow, mothball for preservation, or pivot by accelerating their offering in a related field.

An uplift strategy is centred on an avenue of growth to survive. Retail stores have been particularly hard-hit by the Covid-19 lockdown and retail sector regulations. Retailers, especially those with a regional or national footprint, should consider the immediate introduction of an e-commerce channel to uplift their business prospects. This will help with interim sales during the lockdown, ahead of the reopening of their physical stores, and any post-lockdown strategy should include provision for retaining and growing this new customer base.

In some cases though, businesses might make the hard decision to mothball operations. Many otherwise successful national restaurant chains have opted to hibernate rather than reopen while the virus is at high risk of spreading — with the consequent risks associated for their staff, customers and brand. But this alone does not mitigate the need for additional funding and has left many businesses seeking assistance from Cobra with Unemployment Insurance Fund (UIF) applications for staff as they face months of uncertainty.

Some businesses will survive this pandemic by adjusting or pivoting their offering towards new, yet similar targets. The Cobra team recently helped a gym equipment business that before Covid-19 drew 75% of its sales from commercial gym and hotel networks; just 25% was drawn from home gym equipment sales.

Given the practical, safety and regulatory realities of our coronavirus world, even if commercial gyms were allowed to reopen people are likely to prefer exercising in the safety of their own homes and in their own time. After a detailed analysis this business has successfully pivoted its target to meet the increased demand for home gym equipment and is now available to service its customers via an e-commerce channel.

With a robust strategy to tackle the road ahead there are glimmers of opportunity for every distressed SA business. The skills, tools and potential exist now to JumpStart their engines for stability — and even growth — despite the dire economic outlook.

• Craker is CEO of IQbusiness.

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