COVID-19: Are We Asking the Right Questions about ... Small Businesses and their Struggle for Survival?
Ann Bernstein said that the challenges small businesses face during this crisis are complex and vital to overcome for South Africa’s future. SA does not really know how many SMMEs there are in the country, nor is there agreement about how we should define this sector. Thus, when we use the term small business, we have to be aware that we are talking about a range of enterprises, from informal survivalist firms that are not registered, employ one or two people and have few assets, to formal businesses that employ many people, have significant assets, and enjoy an annual turnover of many millions of rand. All of these firms have been hit hard by Covid-19. At the beginning of April, StatsSA interviewed 707 small, registered businesses. Almost half of responding firms had temporarily closed their doors; five in six businesses experienced a drop in turnover and almost two-thirds of businesses felt that the impact of this pandemic would be worse than the 2008 recession. StatsSA conducted a second survey between 14 and 30 April, and 2,182 businesses responded. This time 47.9% businesses indicated temporary closure or paused trading activity, while 8.6% had permanently ceased trading. Thirty-eight per cent indicated they faced decreased access to financial resources, while 29.7% said they would survive less than a month without any turnover. The majority of the respondents (56.3%) indicated that they thought they could operate during level 4 of the lockdown. In the first survey, 38.8% expected to implement layoffs. This response increased to 45.6% in the second survey.