Friday, October 30, 2020

SMMEs given tips of staying afloat during global recession

The Botswana SMMEs were this week taken on a drill that will help them manage crises at a time when a couple of small and big businesses around the world have gone bust as a result of global economic crisis.

Peo Venture Capital hosted local small businesses with some that it has sponsored and assembled a team of experts from South Africa and Botswana to give them what Peo Chairperson, Sheila Khama, describes as a ‘chance to survive’.

The SMMEs were told that managing supplier relationships was important in running a business.

Dr Johan Van Zyl, Director of Entrepreneurial Unit and Senior Lecturer at University of Free State in South Africa, advised that the relationship keeps the current suppliers and creditors.

“It does not mean acquiring new ones (suppliers). Acquiring new ones could cost you some money”, stated the academic, who also runs a revolving fund in the Free State region of South Africa.

Van Zyl advised the small businesses that it is important that they improve negotiation skills with suppliers and implored them to build some trust, especially in the economic downturn.

“It makes them (suppliers) believe you are dedicated to your business: they will talk to others and say you are doing business in an ethical manner,” he said.

He also said small businesses should be aware of the legal systems like crime in the country, competition in the business environment and be aware of economic conditions.

Olebile Makhupe, Head of Financial Markets at Standard Chartered Bank Botswana, also advised the SMMEs that it was a wrong assumption that treasury management is for big businesses.

“The global economic downturn has forced to rethink how to save costs and improve efficiency. I am not saying the sky is falling, but what the business should think about in the crisis,” said Makhupe.

“Small businesses assume that treasury management is for big businesses. It is important in any organization, irrespective of the size,” she added.

Treasury management entails management of cash flow, money markets, use of capital flow and hedging amongst others.

She also observed that access to cash has become tough, especially during downturn adding that ‘it is important to manage cash and liquidate’ non profit making instruments.

Helen McIntee, Academic Director at IMM Graduate School of Marketing in South Africa, advised the SMMEs that marketing is crucial for business growth.

She stated that if companies cut their marketing budget, especially in a downturn, the consumers will forget about them.

She gave an example of Coca Cola that also cut its marketing budget only for it to lose the market share by 3 percent.

“You can cut the marketing budget and take it to the bottom line and make profit, but they (consumers) will forget about you. Cut it (the budget), but do not forget about it at all,” McIntee advised.

Peo Venture Capital, an initiative jointly owned and fully funded by Debswana and De Beers, hosted the workshops to help entrepreneurs.

The aim of the workshops was to remind the entrepreneurs of some of the tools that are helpful in managing businesses during times. The participants included the management of businesses funded by Peo.

The specific topics facilitated by subject experts from Botswana and South Africa are financial planning and budgeting, treasury management, marketing and sales and supplier relations.

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