According to the recent International Monetary Fund (IMF) economic growth for South Africa for the current year and 2018 is unlikely to surpass 0.8 percent after registering 0.3 percent growth in 2016. Consumer spending will remain fragile due to stretched household budgets and high debts. Businesses are eventually going to feel the impact of the struggling economy, however, now is not the time for panic, what is needed is focused and decisive action.
As the age old African proverb goes – "If you wish to move a mountain tomorrow - you must start by lifting stones today". Certainly, these uncertain times continue to test entrepreneurs and their ability to successfully run their businesses. A business well run contributes towards the creation of jobs in the country, provides opportunities for new graduates, pays salaries and wages amongst other key costs; therefore running a profitable business has significant impact on the economy.
There are a few basic focused and decisive actions that each business can use to drive profitability in this time.
Stick to your core business
This is the time to stick to the core business deliverables and ensure excellence in managing the day to day running of the business/services offered under the current economic climate.
Be both innovative and agile
Like in any tough environment, there are lessons to be learnt, as well as tactics a business can use.
Keep an eye on costs
Keep the business running lean, reduce all forms of unnecessary expenditure.
As any successful entrepreneur will tell you, cash is king! Managing cash-flow ensures business fluidity by ensuring that the day to day running of the business can be financed with ease, and also allows the business to create room for a quick response to the market.
Keep customers happy
Keeping customers happy is important in an economy where buying power is under immense pressure, each sale is a contribution to a more positive bottom line making each sale a pinnacle in importance levels – customers need to be made to feel that spending their money in your business is worth it.
Study the market for profitable gaps
Remain "hyper-focused" on activities that bring in additional money to your business by staying informed and don't operate in a vacuum.
What further complicates the South African business landscape one can argue is that our economy remains disproportionate – mainly comprised of large corporates and small businesses, however; notable work has been done in stimulating entrepreneurship and developing an environment conducive to the emergence of business start-ups.
It is not all doom and gloom - challenges need to be reframed as opportunities, stay true to your business strategy, keep abreast of developments and proactively manage all aspects of your business – that mountain will eventually move.Suggest a correction