03 September 2022
According to government estimates, load shedding can cost the country’s economy about R500 million per day. The effects of South Africa’s struggles with blackouts, especially impact micro to medium-sized enterprises that play such a significant role in the economy.
The country has had load shedding since 2008. It is important for small businesses to be on top of things and not be caught off-guard when power outages occur.
Black Umbrellas, an enterprise and supplier development incubation organisation, has seen first-hand the effect of the power supply disruption in enterprises that have been and are currently being incubated. As part of its mission to inspire and, develop entrepreneurs, Black Umbrellas offers insights for enabling the success of emerging SMEs despite load shedding:
Assess the business in the worst-case scenario – Business owners should do a detailed assessment of the readiness of their business for the event whereby Stage 6 or higher is implemented for longer than two weeks. This means analysing the income, expenses, what production output is required, staffing and cash flow to get a very clear picture of how the business would fare in the worst-case possible. With that information, plans can be devised immediately to maintain business function in the event of extensive load shedding.
Look at funding for alternative energy sources – UPS units, portable batteries, inverters and gas tanks for cooking have become a necessity for businesses to survive load shedding. It is worthwhile to assess the business’s financial position and work towards generating money to pay for these tools. An alternative is to look into funding for small businesses and use the cash injection to invest in an alternative power source.
Work together – It may be impossible for an individual to afford an alternative power source to continue their business operation, but the solution may be for micro-enterprises or small businesses to enter into mutually beneficial partnerships. Businesses situated in the same building might be able to work together with the property owner to split the cost of a generator.
It might be feasible to share power solutions for businesses that are neighbours or possibly have complementary service offerings so both businesses continue to operate. This is where local business chambers or small business associations can help the enterprises in their communities by creating opportunities for dialogue and partnerships.
Protect your business – If your business is at risk of theft or electrical damage from power outages and surges, it is best to address these issues while load shedding is not persistent and operations are going well. This will prevent further losses and expenses in terms of insurance and repairs in the future. Businesses that use electronic data-storage devices should also invest in backup cloud services for their data so that nothing is lost during a sudden power outage. Portable, battery-operated payment devices mean that customers can still pay by card and reduce the amount of cash on-site at their businesses, which can pose a risk for robbery.
See solutions in the challenge – Check your load shedding schedule regularly and make sure you keep an eye on updates online or on the radio. Plan for activities that don’t require power which you can do in load shedding times. This can be stock taking, cleaning, admin tasks such as financial reconciliations or filing, marketing tasks on social media, in-person team meetings or even team building activities.
If your business can operate during load shedding, make sure you market this advantage as much as possible. Get the word out there that your enterprise keeps going even when the power doesn’t. And, if you see an opportunity to pivot or offer an alternative product or service that alleviates the load shedding blues, make the most of it and let load shedding work for your small business.
If you, as a small business owner, aren’t sure how to manage the finances, don’t know how to improve the marketing of your business or need more information on compliance or funding, seek assistance. Business incubation and mentoring can make a huge difference to a small business battling load shedding problems and looking for feasible solutions. Black Umbrellas is proud to be with small businesses every step of their growth journey and tackle any issues head head-on with a combination of education, mentorship and guidance on regulatory requirements.
