Small business resilience

Photo by Javier Allegue Barros on Unsplash

If you go back to the first blog posts on the ideaaccelerator.co.za website you will recall that we started warning about strange things happening in the economy way back then — nine years ago. 

The message was to knuckle down, protect your cash flow, shore up your cash to see you through troubled times and to come up with new ideas to attract customers and generate revenue. 

But in recent times things have taken a turn for the worse.

It’s not sufficient to talk about cash flow, the mantra of the business gurus and exspurts, and operational efficiencies. Shaving off pennies while Rome burns isn’t strategic planning.

Now with the economy at its knees and things expected to get worse, small business people are required to pull the Ace out from their sleeve.

Business continuity planning becomes important in times of social unrest and upheaval.

It’s no place here to discuss it, but let’s just say that each action has a reaction and it would be prudent to prepare for an environment that requires much higher levels of security.

Our scenario planning anticipates a situation where small businesses may need to pay an additional cost for doing business.

It’s a common theme that offshore, if you can get it, is an important medium-to long-term strategy. The more business you can do offshore, the more you can manage inevitable risk. 

Stepping out of your business to reflect on these things and see where you are going is critical. Your market may be falling away underneath your feet without you being aware of it. Small business owners and entrepreneurs need to understand the risk that faces them in a turbulent environment. 

Fortunately there are ways of reducing the numerous business risks facing small business owners and entrepreneurs. 

Take a look at ideaaccelerator.co.za which explores these topics and get in touch with us to start an uncomfortable but courageous conversation about risk planning and management. 

Beware false and inaccurate information

A lot of information hits us daily. Information from family, friends, news and social media. How much of this information is accurate, misleading and even false?

People use information to achieve their objectives or goals. They want something and they will use information selectively to obtain it. Think of all the sales messages you receive daily with promises about quality and service.

Then there is propaganda, which attacks, is insulting and deliberately hides the truth or even fabricates it. With no little being done and so much being taken away it’s no wonder the progandists spew out hate to cover themselves and claim progress.

Views are expressed by so-called exspurts, market commentators, economists, company representatives, self promoters and sympathy seekers.

How do you sift through all this information overload and decide what is accurate, what is objective and what is solid to base your decisions on? For small business owners and entrepreneurs it’s pretty crucial to have accurate, up-to-date information. Your survival can depend on it.

Just think how difficult it is to estimate customer demand. What about people pushing hyped up technology trends, deliberately trying to say that you are falling behind.

The best information to obtain is first-hand either through observation or making your own enquiries. Some people make jokes about information you are obtain from Internet but there is good information out there if you are careful to identify the source and perform a basic believability test.

Small business owners and entrepreneurs require information about customers, market trends, technology, new methods of operating, new strategies, laws and regulations, ways to save costs, and marketing strategies.

Do your own homework. Cross reference information. Look for trends. Talk directly to exspurts, preferably people with experience and where possible businesses similar to yours.

It’s hard to prevent yourself from being sucked in by others peddling half-backed truths, misleading and inaccurate facts and slanted, biased information. But if you start from the premise that all information is suspect, you can minimise risk to yourself.

Always begin with the question to yourself, “what’s in it for them?”. View facts and figures in context. A little bit of accurate thinking and caution will help you to avoid being taken for a sucker and making wrong decisions based on inaccurate and false information.

How entrepreneurs see things differently

I went for a walk near the Braamfontein Spruit with my family from New Zealand and my nephew Daniel, 11 years old, spotted a clump of bamboo, removed one of the bamboo stalks and brought it home with us.

“What are you going to make with that?” I asked.

“I’m going to make a spear,” he said.

What interested me was what a child can see in a clump of bamboo. Whilst most people would merely see the bamboo, he saw a spear, a sword, in that clump. The spear gave him hours of fun and enjoyment.

On holiday in the Kruger National Park, we stayed at a private game lodge. I looked around and saw the beautiful surroundings, in bushveld with the backdrop of mountains that were an ochre colour and slightly blue in the morning sunlight. I got to thinking about the original owner who may have looked at this land. He or she could’ve seen it as an abandoned farm, something to sell and move on or an exclusive private game park. International buyers from Russia and Denmark, for instance have snapped up the properties.

Entrepreneurial innovation or creativity is a highly prized resource, a special way of seeing the world around us. I saw a competition recently with a large monetary prize just to come up with new ideas to revive and renew aging and neglected infrastructure. Good luck to the entrants and may creative vision prevail – something sorely needed in this field where climate-resilient infrastructure is critical.

So how do you cultivate this entrepreneurial vision? There are no pat answers. It’s not something you either have or don’t have. It is something that you can develop. But like anything else it requires thinking differently, time and effort and sheer hard work so that it can see the light of day.

As an initial exercise, next time you go out where you haven’t been before, take a look around, focus on one object and let your imagination run. Artists do this all the time. They see potential for artworks in even mundane settings whether it be landscapes, seascapes or crowds of people. What potential do you see in those things you are looking at? Take a step back. Enjoy what you have discovered. Sleep on it. Let your idea expand. If you don’t come up with anything, don’t despair. Try again. You need to start somewhere.

Entrepreneurial vision doesn’t come suddenly out of nowhere. It requires practice and making it into a daily, life-long habit.

Entrepreneurs called back after being chased away


Photo by Joss Woodhead on Unsplash

I recently went with family visiting from New Zealand to the Kruger National Park and had the opportunity – and privilege – to see the park and surrounding attractions.

Most spectacular was the Kruger National Park with its beautiful wild animals and interesting topography.

One can only thank the pioneer conservationists for their foresight so future generations can enjoy this wildlife heritage. Had they not done so, we probably wouldn’t have the privilege of seeing the many animals, birds and other wildlife in their natural habitat.

But what I want to get onto is something interesting I experienced about entrepreneurship during my recent trip.

We visited an historic town – we will leave the name out – and got chatting to the owner of a local business.

We found out that the owner recently started up after the locals encouraged entrepreneurs to come back to the community.

Entrepreneurs running businesses were previously chased away – rather let’s not go into that here – and others tried to start something to attract tourists but were unsuccessful.

The locals changed their tune and have been encouraging entrepreneurs with proven experience to come in and rescue the community.

You see, what locals really want is to make a livelihood. Unsuccessful businesses are not going to create jobs. Other institutions are largely incapable of creating new job productive to the local economy. We saw for ourselves how many jobs the entrepreneur created – all beneficiaries from the local community.

Entrepreneurship is the magic that creates employment.

Take a moment to think of all the many, many people who rely on entrepreneurship throughout the country. for their daily livelihoods.

Everywhere, no matter which community, large or small, you will find entrepreneurship giving people what they need and want. Some people disagree. They have other agendas.

On every level, entrepreneurship needs to be encouraged.

No one here wants to glamorise entrepreneurship because it takes guts, grit and hard work to get something off the ground.

But in the end it’s rewarding not only for the entrepreneur but also for all the beneficiaries in the community.

Face change from within

On the road in Namibia. Photographer: Chesney Bradshaw

Disruption. Turbulence. Volatility. Uncertainty.

Major changes are hurtling towards us at an increasing rate.

How do you cope?

External circumstances can bring about major life changes. Think of the unprescedented number of businesses that are restructuring and closing, the huge number of job losses and environmental degradation, ultimately lowering the quality of life around you.

You can’t ignore the realities in the outside world. But often they are out of your control. This is why adaptation or response to change needs to come from within.

Inner change begins with examining who you are, what you want and how and your vision for yourself. You can control your attitude, your perspective or paradigms, your behaviour and your inner world.

The human condition is difficult, life is difficult – nobody said change is easy. What happens to you is less important than how you are going to handle it.

Inner change puts into sharp focus values, purpose and meaning. As Stephen Covey says, values build character. Without purpose or meaning in our lives, we can drift, take the easy way out, feel sorry for ourselves. A mission, a purpose a clear meaning, supplies us with energy to drive forward and achieve those things that matter most – peace of mind, security and love.

Changing your inner world takes time, hard work and changing mental habits. A quick way to gain new perspective is to use a technique offered by Gerry Gilles. Write down 10 good things about the change you are experiencing – no matter whether it is a loss of a business, loss of a job or, heaven forbid, a life-threatening illness. It’s hard I know. But give it a try and resolve to come up with 10 positive things. Write down 10 good things about about your current situation (if things were to have stayed the same), even if you are in the eye of a personal storm.

This little exercise will start to turn your thoughts around. The two sides begin to balance in your mind. You may see opportunities that you had never thought about before. From this base start digging deeper into your values and decide what you really want. What is important to you? Where do you want to go with the rest of your life. What is your life’s mission or purpose?

Gaining new perspective in our lives is important. We have to do it. There is no alternative but to find a new path, a new life to live … and follow perhaps a low road less travelled. James Clear says in a Tweet, “Life is short. And if life is short, then moving quickly matters. Launch the product. Write the book. Ask the question. Take the chance.”

The spirit of free enterprise

Photo by Chesney Bradshaw

A while back we browsed a small seafront market at Walvis Bay, Namibia. It was amazing to see how alive and well the spirit of free enterprise was in this dusty fishing industry town.

At one restaurant overlooking the Atlantic Ocean we sat down and had fresh Namibian oysters in the mid-morning sun … with a well known Namibian beverage. A large yacht, was steaming out to take passengers for a sea cruise. Gigantic pelikans perched on poles along the jetty. What a beautiful coastal scene – thanks to the entrepreneurs who made it all possible.

I’ve just found out that entrepreneurs have taken over the old port lighthouse at Walvis Bay and converted it into a mini hotel. Rooms cost an arm and a leg for locals but will be chump change for overseas tourists. The lighthouse accommodation is surrounded by desert sand and even a ship wreck on the rocks in front.

The spirit of free enterprise can be nurtured at a young age. Youngsters who have the opportunity to work in their parents’ businesses begin to understand what entrepreneurship is all about. Entrepreneurship can be learnt after school too.

But for those who have sat in public or private jobs, it can be challenging. The reality of small business operations often means you have to start from the bottom, sweep the floors, pack shelves, load crates into a bakkie and do all the dirty but necessary work.

In a previous era, people would give you a strange look if you said you were an entrepreneur. Nowadays because of financial necessities entrepreneurs received due respect.

It’s a good time to think about entrepreneurial opportunities. In an economy that has been heading south for many years (we all know why) and with no glimmer of hope yet for economic growth, opportunities are available everywhere:

– landlords are battling to charge exorbitant rentals
– assets, particularly second-hand equipment, are available at much lower rates
– interest rates are low and expected to decline
– suppliers are more willing to give discounts
– technology, especially digitalisation and the Internet, is helping to bring costs down
– customers are looking for alternatives and if you can save them money or make their lives easier, your chances of winning their business is increased

Entrepreneurs do it better. But there is no denying that entrepreneurship requires hard and clever work. It is not as glamorous as the guru talk show hosts and wizard business advisers proclaim. It takes guts, grit and determination. It’s character building when you have to sell on the street and persuade strangers to buy from you.

I recently came across a person who is 60 years old, previously employed in the film industry. He said his one regret was that he never learnt a new skill while he was working for other people. He never gave the future a thought.

If you have any inkling or itch to be an entrepreneur, then the time start acquiring the necessary skills and experience is now.

Have you considered these serious warning signals for business disruption?

Sailing in for False Bay. A watercolour by Chesney Bradshaw

You may have seen the news about a food company’s business that was disrupted because of the lack of basic services. The company requires a large volume of water for its broiler/chicken broiler operation. The municipality was a unable to supply the required qualities of water and as a result the operation suffered huge losses.

This company isn’t the only victim of a lack of services. Others in the food processing business experience similar incidents. If your business is vulnerable because of basic services such as water and electricity, then it should signal a warning signal for you to take preventative measures.

You may have seen the news about a food company’s business that was disrupted because of the lack of basic services. The company requires a large volume of water for its boiler/chicken broiler operation. The municipality was a unable to supply the required qualities of water and as a result the operation suffered huge losses.

A business continuity management system starts with the basic premise that there are risks internally and externally and an operation needs to identify and evaluate these. Once the risks are identified a business impact analysis (BIA) needs to be performed for each significant risk.

As Stephen Covey says you need to look at the things that matter most in a business. That is having a vision, especially in rapidly changing markets, and a purpose. But the reality of running a business involves being proactive to opportunities and threats int he environment.

Business continuity assists your business to get up and running as soon as possible after a business disruption. With no business continuity plan in place, your business could be disrupted for far longer than necessary (with millions being lost). The business continuity plan involves first looking within at things you can control and then looking outside to see what risks in the environment can cause major business disruption.

Often business leaders and managers are preoccupied with current activity — heavily invested in “the thick of thin things”. When a business disruption occurs, they are at the mercy of finding alternative suppliers at very short notice and even a new or different location to continue with their business operations.

In this disruptive economy where margins are razor thin and costs — especially administered costs — increasingly escalating, a business disruption of a significant size can put you out of business.

When it comes to the supply of basic services, hard decisions sometimes have to be made. Does a business need to relocate? But where? Other areas may have similar problems. A business is not a short-term thing – you are planning for the future at least for a minimum five years or so. A relocation can also involve unnecessary job losses with an unfortunate impact on a local community. There are also limits to relocation because you don’t want to be too far from your main markets, especially with rising transport costs.

Business leaders need to look carefully at relocation and may be required to enter into negotiations or discussions and negotiations with municipal supply service departments. This is not always easy about in some instances you may be forced to do so.

A myopic business person may think, “it will never happen to our business”. But even the most small businesses can suffer a disruptive incident and be out of operation for several months. One business I know went to the wall after an extended business disruption.

Beware the quick fix

Rough times make the quick fix enticing. Small businesses cut down on stock levels and disappoint customers. Product ranges are pruned until the customer has to look elsewhere – often seeking alternatives online. Marketing campaigns that don’t make sense eat away profits. Machinery and other assets like people are overworked and not maintained.

The quick fix is wrapped up in the allure of the golden egg. Stephen Covey cautions about the production mentality. People don’t want to look after, maintain and grow their productive assets and find themselves with diminishing returns.

Real change requires a paradigm shift. A movement away from the quick fix to a recognition that change can often be a slow, frustrating experience – but you have to stick to it. If you are into the short term, the quick fix looks enticing. Spend a little money, small amounts of effort and time and you’ll hit the jackpot.

To get a business started from the ground up, to change the course of a business, often takes much longer than you think. Entrepreneurs report that building a new business takes anything from 3 to 5 years. Sometimes, profits only begin to appear after the third year.

The real work begins when you analyse your situation and realise that it all starts with you and your mental attitudes. Mental attitudes and behaviour are based on values.

What are your values? If you want your customers to trust you, you have to be trustworthy. If you want to be ethical in your business, then you need to demonstrate this value to employees, suppliers and customers.

Continuous disruption, and with more to come requires standing back and reassessing your options and building for the long term rather than going for the quick fix.

Look around at the businesses that are growing in these difficult economic circumstances. Look at the real value that they are giving to their customers. Businesses with weak value propositions now will unfortunately disappear as many have already fallen in this economy.

Save our countryside towns

It’s amazing how many towns outside the major cities are broken, falling apart or dysfunctional.

I was excited to see that the 2019 NAMPO conference in Bothaville addressed this issue in one of their discussions titled “Reviving the Platteland”.

Even as I write this I see that what was once the quaint town of Grahamstown in the Eastern Cape (renamed
Makhanda) is calling for rescue after having been gutted and looted by corrupt politicians.

However, there are other factors that are reducing the viability of small rural towns.

Some say that an important one is the lack of investment by large businesses that open their chain stores in these towns, suck out money from town folk, but do not invest in them.

Of course, their argument is that they invest through their corporate social investment programmes — however this is often charity and doesn’t get to the root causes of economic development. What is needed is real economic investment in local infrastructure education and entrepreneurial enterprises.

And we are not talking here about property developers scalping family homes in rural towns, reselling them at exorbitant prices and pushing out the locals. New marauders or investors? We want vibrant communities in small towns not merely retirement villages.

Well, what do you think the solution is?

More local investment by the mass chain organisations, public-private partnerships, improved economic planning at a town level?

On my visits to small towns in the Western Cape and the Northern Cape I have found that not every one is suitable for tourism. Some have natural features that are tourism assets but others have little of interest and are far away from main roads (of course not so for the more adventurous traveler).

The agricultural community used to support these towns but agriculture itself has changed, is modernizing and is not exactly the same type of labour-intensive operation of yesteryear with mechanization and digitisation — and more technology to come.

We can learn — all of us — about the successful towns which have rebounded after virtual collapse and now make a healthy living environment for all inhabitants.

Even city dwellers are well aware of suburbs that fall apart and become slums.

What does it take to revive the dead and dying?

Will resuscitation come too late for some towns which may fade away over time and become ghost towns like Kolmanskop in the Namibian desert?

Flat-broke SA entrepreneurs. How they lost it all!

Most of the blame for small business failures reported recently falls on over-regulation, labour laws and high retail rentals.

But are these the main reasons?

Look around your local community and see what kind of businesses have closed or are terminally ill. Too many restaurants (with high meal and drink prices). Clothing boutiques gone. Then there are businesses that have almost disappeared such as video shops and corner cafes (to the petrol stations).

Just out of this you can add another four small business killers – poor economic conditions, cheap imports, technology and businesses hungry to swallow smaller ones.

The experts from the big consulting firms say a lack of training of small business people is mostly to blame for failure. Training is important but business success depends on both internal and external factors.

What then are some things to watch for in the present disruptive business environment?

1 Intensity of competition. The higher the level of competition the thinner the margins are for small businesses

2 If you are in retail, find more cost-effective selling space. Rental costs can be your number one overhead unless you seek alternative options.

3 Carefully analyze the impact of technology on your business plan or your existing business. One stationery retailer in a shopping centre has closed down and has gone fully online.

4 Staff training. With so many consumers reporting bad experiences with businesses you can stand out if you have well trained, friendly staff. I recently hired a car for a short period and was amazed at how effective and friendly the staff were.

5 Be aware of the cargo cult phenomenon. People put in place systems and strategies that worked years ago but no longer have relevance. They wait like Islanders for planes to come in with cargo but no amount of magical thinking will make that happen. Instead, study current reality and adapt to the changing marketplace.

To own and run your own business takes grit. It’s hard and even harder in hostile, anti-business environments. Lonely too. You’ve got to have incredible believe in yourself. And an ability to spot con-artists in various guises – let’s not name them; wherever money accumulates, they’ll be swarming around.

Second acts are hard in life and just as hard in business. Times change. People change. Laws change. But the second-timers see gaps others don’t spot.

Entrepreneurs going out there now in this harsh, hostile and hazardous marketplace are not honey-eyed but smarter and more experienced.