Impact of Covid-19 on SMMEs [THREAD]

In June, we surveyed #SMMEs to see how small businesses have been impacted by Covid-19 and how the crisis affects their operations and ability to meet #paymentobligations. @TransUnionSA #SMMEsStudy #CreditTrends @VusiThembekwayo @iamkoshiek

SA’s 2.5 million #SMMEs form the backbone of the #economy. They contribute between 20% and to 40% to the GDP, and represent our best hope of economic growth.

SMMEs employ a significant population of the SA workforce, about 40%. @TransUnionSA #SMMEsStudy #CreditTrends

Nine in ten #smallbusinesses in South Africa are struggling or temporarily closed because of the COVID-19 #pandemic. Only 9% are operating as normal and less than 1% of businesses are thriving. @TransUnionSA #SMMEsStudy #CreditTrends

96% of small business owners reported a decrease in revenue since the start of the pandemic. 78% say this decrease has been significant.

Industries most affected: hotel and accommodation, restaurant or food services, travel. @TransUnionSA #SMMEsStudy #CreditTrends

One in three SMMEs say at the current rate of business, the company will continue to operate for less than 3 months.

But the owners remain optimistic: 54% believe they will recover from the impact of the #pandemic. @TransUnionSA #SMMEsStudy #CreditTrends

Many #SMMEs will be unable to fulfill critical #paymentobligations over the next two months: 69% will cut staff salaries, 44% will be unable to pay rent and 33% will have to start downscaling services such as #telecommunications and #insurance. @TransUnionSA #SMMEsStudy

How do #SMMEs survive/recover?
1. Make smart business decisions. Successful businesses invest in R&D, equipment, and stock & inventory.
2. Be strict with credit. Businesses that are better off are less likely to offer #paymentholidays & discounts. #SMMEsStudy #CreditTrends

3. Focus on boosting #cashflow and attracting new customers. Stay focused on your clients, add value constantly, consistently engage them.
4. Get online. A strong #digital brand presence matters more today than ever before. @TransUnionSA #SMMEsStudy #CreditTrends

5. Adjust your approach to #creditmanagement to one of #investment in #sustainability. Verify customers before offering #credit, & keep monitoring them. Score more, score better, score often.
6. Take a non-emotive approach when considering business continuity or closure
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