SMMEs, more than ever, need a hand-up
There’s a lot big clients can do to help their small suppliers to survive, and thrive.
A tough economy – like we have now – impacts every business from large to small. As the economy gets tougher, the consumer is pinched, and that’s when particularly small businesses take the knock. SMMEs are fragile. We’ve seen this. They simply don't have the depth of capital or flow of income that larger businesses have, so any event that affects the economy will have an impact on them first. Some will have the resilience to pull through; others won't. Even prior to Covid-19, that’s exactly the situation South Africa’s SMMEs were in. Recovery will therefore be difficult, and it’s not going to happen by itself. I’m quite sure that’s why President Cyril Ramaphosa announced the economic stimulus package. You need that kind of intervention – that support from government – to set things right. Big business definitely has a role to play here, too. Large enterprises will continue to use other big businesses as suppliers, along with medium-sized enterprises and small businesses. The relationship between big and small businesses needs to be of such a nature that the big client understands and appreciates the problems that the small supplier encounters. Earlier payments to small service providers would certainly assist. So would increasing the number of contracts awarded to smaller business. But it could go even deeper than that. How can big businesses support SMMEs in terms of skills development? There’s a lot they can teach them and vice versa. In other words, there’s a lot that big business could do, but it will take acknowledging that small businesses are fragile and have challenges. On top of that, the post-Covid-19 future has a great deal of uncertainty attached to it. As we play the current scenario forward, it’s clear that small businesses have a vital part to play in rebuilding the South African economy. Creating jobs will be fundamental to our economic recovery, and – despite their fragility – SMMEs remain one of South Africa’s biggest employers. Sadly, we are sure to see more small businesses closing down in the coming months, even as new entrepreneurs with new ideas seize the opportunities presented by the new normal. We saw this during the extended national lockdown, as new small businesses entered the marketplace as the opportunity arose to create income and, importantly, employment. The SMMEs that entered the marketplace during the crisis period, and the ones that survived, will have to continue to adapt to survive.