This week I’ll describe just one case to understand what is happening in different ways across Africa as small companies begin to emerge from lockdown.
I spoke to Tracey Miller-Smith, a participant in the programmes AMI has created to help small businesses survive the pandemic. Connecting with businesses across the continent helps her cope emotionally.
Tracey runs Eco Balance Landscapes. With the slight easing of restrictions they have been able to do essential maintenance of the corporate gardens they care for. This may just have pulled her back from the brink of closing, but now she faces the tricky calculation of how to prepare for the future. Every day drains cash, so “we have to be decisive about where to from here.” But what can she base those decisions on when there is so much uncertainty?
With 40% corporate and 60% domestic clients, she has to consider what their financial situation will be, so she is in regular phone contact with them. She has already received notice from some of the big clients, and 10% of the domestic clients have resigned so far. So the first source of uncertainty is what the market will do.
Then there is the question of competitiveness. With so many people retrenched, the labour market will be awash with people willing to charge almost nothing just to get the business. Will she be able to compete while sustaining overheads, when her customers are stretched financially?
A major source of uncertainty is what the regulations will be in future. Without clarity on when her business will be allowed to do what, she can only estimate her cash-flow projections, using best-case and worst-case scenarios.
Every day that passes without policy certainty the country loses another little slice of the economy as companies decide to give up. It’s a daily attrition that does not happen in large steps, because everyone’s situation is different. So it’s not headline news. It just drips away every day — the slow, daily evaporation of economic capacity, jobs and dreams.
Most of Tracey’s staff have worked for the company for more than 10 years. So letting them go will be both sad and expensive — retrenchment packages are costly. And ahead of her lies negotiation with the union.
This affects her emotional coping. “For the past few weeks my nerves have felt like metal on metal, mainly because we have been unable to get approval from the Unemployment Insurance Fund (UIF).” So staff are hungry. The UIF is awaiting verification of her company’s tax status from the SA Revenue Service. “We are so compliant.”
She has to wait for not one but two government departments coping with this deluge of unusual demand while themselves on lockdown. One does hope that the officials concerned are aware that every minute they can put into extra work, every bit of efficiency they can squeeze from their stretched systems, means food for the hungry and maybe saving jobs for the future. I hope they understand that.
Tracey is wisely keeping fit while she keeps in touch with friends who can serve as mentors. Crisis survival requires taking care of one’s body and soul — exercise, diet, sleep, relationships. Asserting control by finding whatever small steps mitigate the big problems one cannot control helps reduce the sense of helplessness that aggravates stress.
On the positive side, the company has had to do things they have been promising for years, like go paperless so the bookkeeper can work from home. If the business does survive, they’ll probably not need an office.
It is inspiring to know that small companies across the continent are doing whatever they can to preserve hope and jobs. It’s scary knowing how few may survive.
• Cook is co-founder and chair of the African Management Institute
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