As the COVID-19 pandemic continues to inflict damage on every aspect of daily life, business is facing a past that has gone forever and a future that is uncertain. Fortunately there’s help at hand, including the National SMME Support Portal (NSSP) smmeportal.up.ac.za launched in May by the Centre for Entrepreneurship at the University of Pretoria (UP). The portal aims to support and enhance small business survival and continuity during and beyond the pandemic.
The NSSP was one of several options discussed by five leading academics from UP’s Department of Business Management during an online panel discussion on turnaround strategy and business rescue during the COVID-19 era. The discussion, titled ‘Turnaround strategy and business rescue: help for struggling businesses’, was formed part of the LeadUP Alumni Thought Leadership Series organised by the UP Alumni Relations Office, with experts in various fields, including UP alumni and academics, covering important national and global issues. UP is the first university in Africa to broadcast such alumni events via LinkedIn Live.
“A significant section of our GDP is driven by the SMME sector – not to mention its role in job creation – and the sector is in distress,” said Professor Alex Antonites, Head of UP’s Department of Business Management and a member of UP’s Centre for Entrepreneurship steering committee, which was instrumental in the portal’s launch. “The online portal is available to any SMME in South Africa and we have secured the professional assistance of over 400 professionals who are offering their services free of charge.”
The group includes coaches and mentors, strategists, accountants, financial managers and planners, IT specialists, counsellors, lawyers, marketing experts, tax practitioners, supply chain specialists, HR practitioners, communication specialists, and business analysts.
The turnaround strategy and business rescue discussion had 7 762 online views during the event and in the first week after, including many UP alumni, with 60 offering to contribute their professional services to the SMME portal after the discussion. Since its launch, over 8 000 SMMEs have reached out to the portal for assistance.
Rebaona Letsholo, a senior lecturer in UP’s Department of Business Management, said that in all turnaround strategies “we need to see the value in disruption and why system breakdown matters for change, as it forces us to come up with new solutions that are creative, flexible and adaptable.” She emphasised “audience awareness”, as customers’ and consumers’ priorities, intentions and behaviour have changed and will continue to change because of the pandemic. All businesses need to understand this with respect to their specific business, and change the way they do things to meet the changing needs of their customers and consumers. She added that businesses also need to look at how their competitors are approaching this.
She highlighted informal traders, who showed their adaptability in this regard by sourcing and selling masks straight after lockdown at a far cheaper price than the more formal sector. Online funerals are another example of entrepreneurs using disruption to meet their customers’ needs. More than ever before the way forward needs to be co-created hand-in-hand with your customers, stakeholders and suppliers.
Dr Rachel Maritz, senior lecturer in UP’s Department of Business Management, said, “Businesses also need to look at trends that will outlive COVID-19, such as eLearning. Naspers, for example, is considering becoming a management system provider for eLearning. Companies can also consider the content-provision side of eLearning and eBusiness. For businesses to survive, they have to pivot their strategy to a new horizon: You cannot be fixed in your strategies, you need to accommodate a more emergent, bottom-up approach, with more autonomy for your managers. Allow them to experiment with new solutions and new ways of doing things within the guidance of your overall strategic intent.”
Professor Marius Koopman said: “Businesses of all sizes have been dumped into many different turnaround situations and directors often don’t want to acknowledge the level of distress they are in and whether this requires filing for business rescue.”
As a starting point, there are twelve specific ‘fire assessment’ questions that clearly indicate where your business is and what you should do, Koopman explained. “The first question is: what happened to the demand for your product or offering? For example, when SAA went on strike, it immediately knocked the demand for flights. The twelve questions are on the NSSP website; you put your answers on a score sheet that clearly indicates the severity and causality of your distress. It’s all about sense-making, and I am happy to help businesses with the interpretations. I can be contacted on [email protected]”
Business rescue is formally legislated in the Companies Act of 2008, “and it’s essential to understand the pros and cons of going into business rescue and how to use it as part of a greater turnaround strategy as it is not a magic wand,” said Dr Wesley Rosslyn-Smith, senior lecturer in UP’s Department of Business Management. “Companies in business rescue are generally looking at a turnaround strategy of three to five years. It’s a hostile, expensive process as business rescue practitioner teams are not cheap. Some parts of the business might be sold off or wound down in rescue but the aim is recovery, whereas liquidation is about winding down.”
The National SMME Support Portal (NSSP) can be accessed by any registered SMME in South Africa. In order to register to get access to the free services of the National SMME Support Portal (NSSP), visit: smmeportal.up.ac.za
To watch the full LeadUP discussion, please click here.