Tag: business

Emerging successfully from an economic downturn and global pandemic is no easy feat, especially if you are an SME business without large cash reserves to see you through. How do entrepreneurs combat these difficult times and come out the other side relatively unscathed?

Warren Bonheim, MD of Zinia, a leading ICT and telecoms provider, shares his strategies for success that have seen Zinia thrive through tough times.

Embrace customer reviews

Word of mouth has to a certain extent been digitised with many customers often deciding who to contact off of google and social media reviews. This strategy embraces transparency by asking customers to go public with their experience across digital platforms.

Bonheim says feedback directly from the mouths of the customer has a unique way of driving a culture of continuous improvement and dedication to customer excellence.

By focusing on customer experience as a priority in your business, you can determine if you are delivering on your service promise or not. Simply asking what your customers are saying about your business also allows you to benchmark your service and find a starting point to improve. However, exposing your business by actively seeking out customer reviews is not without risk.

“Opening your business up to customer feedback is daunting because there is absolutely no control over what people will say,” says Bonheim. “In addition, it is human nature to criticize and not take the time to give positive feedback.”

Whilst this approach may open a business up to negative reviews, these reviews allow business decision-makers to create targeted intervention programmes to improve their services that are far more resource-efficient in the long run.

Invest in people and service

During tough times leaders may seek to cut costs through their wage bill. However, making a strategic decision to not carry out retrenchments may be better as it allows you to protect the livelihood of employees who make a high level of customer service possible.

This also proves that you are loyal to your employees, preserving employee satisfaction and motivation which leads to a productive and positive company culture.

Zinia made the decision to stand by their employees and demonstrate their commitment to personalized service by limiting retrenchment during the Lockdown. They also improved the customer experience by incorporating easy to understand tools, sales documents, processes, checks, SLAs, and customer satisfaction surveys to make dealing with the company effortless. In the same way, links to provide customer feedback are readily available at a variety of touchpoints, making it easy for customers to share their thoughts.

Give recognition

Getting buy-in from executive-level members is also imperative to implementing these strategies. Reviews both positive and negative should be monitored regularly by executive level company members. This allows positive reviews and the employees responsible for them to be given validation and recognition. Negative reviews can be investigated and the challenge properly identified – be it in processes, people, or systems – to inform future strategies on how to improve the business.

Bonheim says, “When we get a positive review everyone at Zinia celebrates, and when we get a negative one, we see it as an opportunity to learn. It is difficult not to take a negative review personally at Zinia because every staff member is so passionate about customer service. However, we know we are doing something right when 97% of our customers rate us a 4 out of 5 and above for service excellence.”

Creating a positive service culture internally through internal communication initiatives and leading by example is essential. After all, if your company members don’t believe in what you are doing you will struggle to implement any strategy within the company.

Digitise appropriately

Another strategic decision that paid off for Zinia was investing in a digitization strategy in 2018 that carefully considered which key business processes could be automated to support, manage, and sustain the businesses growth.

Automation has an incredible capacity to drive efficiencies and ensure that customer service is not compromised by lightening some of the manual administrative load. Investments in IT systems, customer engagement and ticketing, productivity monitoring and more, allowed Zinia to remain strong during 2020 when other businesses struggled.

The leader’s investment in an IT managed services platform known as ZMS allowed them to virtually manage their customer’s IT and network environments; improve efficiency and productivity of their own internal resources; proactively service their customers and minimise their downtime.

Effective digitisation has the benefit of allowing a company to be flexible and pivot according to challenges, big or small, that they may face. During a crisis situation like the pandemic, a solid digital infrastructure allows for remote working when needed, providing everything that the employee needs – internet, access to business systems, telephony and so on – so they can work productively.

Any good business strategy should focus on implementing the systems and controls necessary for the company to scale and provide the flexibility to react quickly. In Zinia’s case, their combination of systems and entrepreneurial flair allowed their team to quickly investigate the implications and opportunities within the crises when international rumours of a lockdown first began.

This resulted in the company being ready for lockdown with remote working solutions that included hosted VoIP (Voice over IP) PBX and custom productivity tools that could be delivered virtually. These solutions answered a very real business need in the market: How to manage employee’s remote activities and identify operational inefficiencies, productivity trends and prevent any IT security risks of remote working.

Embracing a digital way of interacting includes benefits such as increased sales activity and output of work, reduced travelling costs, reduced time spent travelling, reduced printing costs and so on.

Using these business strategies above can combat downturns in the economy, provide consistent feedback on business health and help clients trust organisations that deliver value in today’s world. Creativity and innovation are key to running any business, but especially in rapidly changing climates, they can make or break your success.

Businesses with strong growth strategies, forward-thinking decision-makers and positive workplace culture are emerging from the pandemic stronger than ever. Whilst many will agree that a fully work from home approach is not sustainable, with the correct strategy and investment in infrastructure we can effectively marry in office and work from home scenarios and create more resilient companies, with leaner operating models and more positive culture that recognise and support the human element of successful businesses.

Source: Supermarket & Retailer

The opposition Democratic Alliance has tabled its Ease of Doing Business Bill which is aimed at cutting and reducing red tape associated with doing business in South Africa.

The private member’s bill specifically aims to deal Regulatory Impact Assessments (RIA) and the impact and cost that new regulations will have on the economy.

“Following a study into the lack of understanding of the full cost imposed by regulatory measures and the impact thereof on the economy, the South African cabinet in 2007 decided that a need exists for the consistent assessment of the socio-economic impact of regulatory measures.

“The presidency consequently issued guidelines on the conducting of Regulatory Impact Assessments in 2012, which guidelines provided for a Central Regulatory Impact Assessment Unit to be housed in cabinet under the deputy president in order to coordinate the development of Regulatory Impact Assessments.

“However, no clear compulsory measures were provided,” the DA said.

Why these measures are needed

Assessing the impact of regulatory measures, from policy through to delegated legislation, before a final decision is made to implement that regulation will improve the effectiveness, efficiency and impact of government interventions, the DA said.

It said that conducting an evaluation of regulatory measures allows:

  • The integration of multiple policy objectives and ensuring linkages of policies such as industry, competition, trade, SMME and B-BBEE, thus promoting early coordination of policies;
  • The enhancement of competitiveness by reducing regulatory burdens;
  • The increase of transparency and consultation when developing regulatory measures;
  • The increased involvement and accountability of decision-makers at the highest political levels when developing regulatory measures; and
  • A tool for policy monitoring and an evaluation benchmark for monitoring and evaluation processes although it is not synonymous with programme/project monitoring and evaluation.

“Specifically for developing countries red tape impact assessments have the potential to contribute to poverty alleviation by reducing business entry costs and creating a regulatory environment that is friendly to small businesses, thus driving economic growth,” it said.

It added that a number of countries including the United States, the Czech Republic, Republic of Korea and Mexico have similar rules in place.

“It is necessary for South Africa to entrench this duty in legislation as it allows for certainty, uniformity and the establishment of a central RIA unit.

“Legislation also allows for the involvement of parliamentary oversight over this important function.”

The DA said that the draft Bill provides for:

  • The establishment of a central administrative unit to manage the RIA process. It also provides for the fiduciary duties, functions, powers and reporting duties of the RIA unit. One of the functions of this unit will be to provide for assistance to businesses in overcoming red tape;
  • The evaluation of new regulatory measures. In this regard, the draft Bill places responsibilities on ministers, members of Parliament, parliamentary committees and self-regulatory bodies when developing regulatory measures. It also provides for the mapping of such regulatory measures to determine whether a RIA is required and if so, the process to be followed. The draft bill will also provide for instances that are exempted from these processes;
  • The evaluation of existing regulatory measures by Ministers and self-regulatory bodies. It further requires the development of a plan to reduce red tape and the costs thereof in existing regulatory measure.

By Mike Anderson, founder and CEO of NSBC

As a business owner you’ve probably been asked to give a discount. How did that make you feel? Your response to that request is critical to the sustainability of your business – as well as to your confidence.

Because after all, you’re either worth the price you’re asking or you’re not. No discussion. This may sound harsh, but if you don’t believe you are worth it why do you expect your clients to believe it?

Reasons to stop discounting your pricing:

  • It’s no fun
  • It requires a time and energy you can use elsewhere
  • It creates a standard for other clients
  • You’re not getting paid what you’re worth
  • It can lower confidence in your business

Once you’ve made the decision not to discount your prices, it will be much easier for you to simply say this in a friendly and relaxed way if you’re asked. Your mind is already made up, so the answer flows naturally.

If a prospective client is not able, or willing, to pay your prices then they probably aren’t a good fit for your business. Moving on from people who are not a match allows you to create space for clients who are willing and able to purchase from your business.

There will always be someone offering something similar to your offerings for the absolute lowest price. I hope you don’t aim to be that business.

The key is to focus on the value your services and products deliver, not what they cost. People who truly understand the benefits they will receive when they buy from your business will accept the prices you have set because they understand the value they are going to get.

If negotiating is the norm in your business, there is still a way to be true to the value your business delivers without discounting. First, get clear about the total value of the offering. Then if you choose to, you can reduce the amount you deliver, along with the price, which means you are not discounting.

Another way to avoid discounting when negotiating is to stick to your original price and add a one-time, additional bonus for new clients.

While you’re thinking about eliminating discounting, please consider increasing your prices. Seriously, when is the last time you raised your prices? And when you did, what was the percentage of the increase? If it’s been awhile since you raised your prices, it’s probably time.

It’s natural that your expertise expands and deepens over time so why shouldn’t your pricing reflect that. Whether or not you decide to increase your pricing, at least be willing to stand firm on your current pricing and don’t discount.

Think about it: you’ll save time and energy if you stick to your pricing; you will feel confident about the value you deliver to your clients; and be more profitable.

So make the decision today that discounting your prices is not part of your business philosophy. Focus on the value your business creates for your clients and watch your business grow.

 

Disruption is an inescapable and growing threat across industries in South Africa. Accenture’s (NYSE: ACN) 2020 Innovation Maturity Index shows that the majority of South African companies are vulnerable. That’s because they are playing it safe. It’s risky. The winners are innovating!

As the success of digital giants like Netflix, Google and Amazon illustrate, innovation is the source of the disruption. It is also the antidote to being disrupted. Accenture’s research bears this out. The companies that are beating disruption, just 7 percent of South African companies compared to 14 percent of companies globally, are innovating, using digital technologies to grow and reshape their core businesses into new businesses.

As part of its Innovation Maturity Index study, Accenture conducted interviews with 100 South African C-suite executives from 14 industries to understand how their businesses are preparing for, and are positioned to deal with disruption. Their responses are cause for concern:

  • 75% expect their industry to be disrupted by new innovations in the next three years, especially from new competitors and technologies.
  • 50% say they are not prepared for disruption.
  • The research indicates that all industries are facing disruption, but 85% (versus 70% of companies globally) of South African companies are highly susceptible to future disruption.

Why is innovation so important in South Africa right now?

“South Africa is facing enormous challenges, including high unemployment, low skills levels and declining productivity and competitiveness. To stimulate economic growth, it needs to address fundamentals like improving infrastructure, healthcare, education, and broadband reach and costs. Rapid advances in digital technologies offer both business and government a way to rapidly address key issues, introducing efficiencies and new business models, and opening up immense opportunities for value creation,” says Vukani Mngxati, CEO of Accenture in Africa. “But unleashing that value requires a strong innovation capability.”

“In South Africa, and globally, the gap between companies on the winning side of innovation and those being disrupted by it is growing,” says Rory Moore, Innovation Lead for Accenture in South Africa.

“When companies are in the middle of disruption, they typically make cautious moves, focussing their energies and resources on the core business that generates most income and profits. Unfortunately, as disruption escalates and business growth begins to moderate, companies that have not kept pace with change – by, for example, adopting new technologies to increase efficiencies and business agility, innovate and enter new markets – find themselves ill-equipped to compete. For them, the economic opportunity is often visible but unreachable; it cannot be attained with their existing business models or capabilities.

“Companies that aim to drive growth and thrive in the digital era have much to learn from the disruptors – the high-growth companies that are on the winning side of disruptors.

What do Innovation Champions do differently?

“Companies that thrive in the age of disruption actively innovate. They have, and are investing in innovation aggressively. And they take a focussed and decisive approach to innovation: it is change-oriented, outcome led and disruption-minded,” explains Yusof Seedat, Accenture Head: Global Geographies Research, Growth and Strategy.

These companies build deliberate innovation structures and they embed innovation in their everyday business by adopting seven innovation practices – they are hyper relevant, network-powered, technology-propelled, asset-smart, inclusive, talent rich and data-driven.

“Of these practices, becoming data driven is the alpha trend among Innovation Champions,” notes Seedat. “It powers a ‘wise pivot’, enabling these companies nurture and grow their core while also growing and scaling new business.”

“Playing it safe could cost companies in South Africa everything,” says Mngxati. “Companies must innovate, adopting new technologies and approaches to strengthen their core and pivot to the new if they hope to hold their position in a disrupted market. Taking the first steps now can help them build a foundation that will enable them to grow, compete and thrive in a digital era.”

By Phillip Inman for The Guardian

The coronavirus could cost the global economy more than $1tn in lost output if it turns into a pandemic, according to a leading economic forecaster.

Oxford Economics warned that the spread of the virus to regions outside Asia would knock 1.3% off global growth this year, the equivalent of $1.1tn in lost income.

The consultancy said its model of the global economy showed the virus was already having a “chilling effect” as factory closures in China spilled over to neighbouring countries and major companies struggled to source components and finished goods from the far east.

Apple told investors earlier this week that it would fail to meet its quarterly revenue target because of the “temporarily constrained” supply of iPhones and a dramatic drop in Chinese spending during the virus crisis.

Carmaker Jaguar Land Rover, adding its voice to a chorus of companies complaining about supply problems, said it could run out of car parts at its British factories by the end of next week if the coronavirus continued to prevent parts arriving from China.

Oxford Economics said it expected China’s GDP growth to fall from 6% last year to 5.4% in 2020 following the spread of the virus so far. But if it spreads more widely in Asia, world GDP would fall by $400bn in 2020, or 0.5%.

If the virus spreads beyond Asia and becomes a global pandemic, world GDP would drop $1.1tn, or 1.3% compared to the current projection. A $1.1tn decline would be the same as losing the entire annual output of Indonesia, the world’s 16th largest economy.

“Our scenarios see world GDP hit as a result of declines in discretionary consumption and travel and tourism, with some knock-on financial market effects and weaker investment,” it said.

Rival consultancy Capital Economics said the situation in China was still developing and it remained unclear how long before the quarantine rules across much of China’s central belt would lead to mass job layoffs and wage cuts becoming more widespread.

It said 85% of larger stock market-listed firms had enough funds to meet their liabilities and wage bills formore than six months without any further revenue.

But thousands of small and medium-sized businesses, which are responsible for half of urban jobs, “may not heed government orders not to shed jobs”.

A survey of 1,000 SMEs conducted by two Chinese universities found that unless conditions improved, one-third of the firms would run out of cash within a month, the consultancy said.

Another survey of 700 companies found that 40% of private firms would run out of cash within three months.

The firm’s Asia analyst, Julian Evans Pritchard, said: “Our best guess is that there is still a window of another week or so during which, if economic activity rebounds, the bulk of employees including at vulnerable SMEs would probably keep their jobs.

“And with large-scale layoffs avoided, consumer spending would bounce back quickly due to pent-up demand, which in turn would help the self-employed and family-run businesses to recoup much of their recent loss of income.

“But with each day that the disruption drags on, the risk of a protracted slump in output rises. If activity is not clearly rebounding by the end of next week, we will revisit our annual growth forecasts.

Oxford Economics said it still expected the impact of the virus to be limited to China and have a significant, but short-term impact, bringing world GDP growth just 0.2% lower than January at 2.3%.

But a pandemic would cause a deeper and more profound shock over the next six months, possibly equal to a $1.1tn loss, followed by a recovery that would make up some of the ground lost earlier in the year.

Is this the end of SAA?

By Jeanine Walker for SA Promo Magazine

“The end of the line is coming soon,” economist Mike Schussler told the Sunday Times over the weekend.

“We are in a deep crisis, we cannot save every state owned entity (SOE) and I think at this point in time Eskom is much more important than SAA”

His comments come at a time when SAA requested another R4 billion from the government in an attempt to keep the struggling airline afloat. BusinessTech reports the airline continues to operate at a loss and has a R3.5-billion short-term loan, which will be depleted at the end of this month (June 2019), along with a long-term R9.2-billion loan.

SAA board member Martin Kingston is quoted as saying that the board was worried about the state of the economy and how it may impact the government’s decision to bail out the airline.

Schussler says the airline is “indebted to the nth degree”, and that it probably wouldn’t survive.

Meanwhile labour union Solidarity says SAA needs urgent, radical intervention from outside. Responding to the resignation of SAA CEO, Vuyani Jarana, last week, Connie Mulder, head of Solidarity’s Research Institute says since President Cyril Ramaphosa’s election a spirit of excitement prevailed about a new beginning. “However, it now seems as if the faces on the pictures may have changed but the facts on the ground have not. Mr Jarana’s resignation leaves Solidarity with no choice but to update its court papers for business rescue, making a final end to the cadre merry-go-round at the SAA.”

SAA ‘is unsalvageable’

He says he finds its extremely disconcerting that in his letter of resignation Mr Jarana cites all the challenges Solidarity had highlighted in 2018 as the reasons for the airline’s failure. “This is proof that while the airline is state-owned it is unsalvageable, regardless of who is at its helm. In 2018 Solidarity reached an agreement with Mr Jarana in terms of which he would give us regular feedback on progress being made with the turnaround strategy. It is now clear to us that this strategy is not going to be implemented for as long as the SAA is owned by the state,” Mulder added.

The SAA’s status as a going concern is still in jeopardy, and it would appear as if little progress has been made as far the implementation of the turnaround strategy is concerned.

“To give a new CEO another chance, yet again, will be irresponsible given the history of the SAA,” Mulder added.

Solidarity considers the SAA business rescue application to be a precedent-creating case of vital importance, not only for the SAA, but also for taking back other, bigger state-owned enterprises from the hands of the state.

“To sit back now and let the SAA continue with another bailout and a new face will be akin to treating a patient who needs heart bypass surgery with a Panado. The SAA and other state-owned enterprises need radical, external intervention, and Solidarity will provide it,” Mulder concluded.

When Jarana resigned he said he would vacate the post on 31 August. However, the Sunday Times reported that he would now vacate his position immediately and would be succeeded by Zukisa “Zuks” Ramasia as acting CEO of SAA.

Businesses to sue Eskom

Source: 702

Eskom – as a state-owned entity – has a legal obligation to provide electricity to the people of South Africa, says Elaine Bergenthuin, MD at De Beer Attorneys.

De Beer Attorneys is preparing to take legal action against Eskom for losses suffered by businesses and commercial entities as a result of load shedding.

If the business in question had a specific contract with Eskom regarding the provision of electricity, then Eskom’s failure to supply power will form the basis of its claim.

If a business bases its claim on delict, then De Beer Attorneys will again need to prove that Eskom’s conduct was wrongful or negligent.

De Beer Attorneys expects Eskom to argue that load shedding, per se, is neither wrongful for negligent – in so far as it is a rational, responsible response to the electricity crisis, ensuring that SA’s electricity grid will not collapse, which would be an unmitigated disaster.

The law firm, however, argues that the electricity crisis itself is something which is of Eskom’s own making – due to its negligence in maintaining the electricity infrastructure.

As such, they should still be held accountable for the losses suffered.

De Beer Attorneys will evaluate each case on its own merits.

De Beer Attorneys is calling on all affected businesses that have suffered clear, quantifiable losses as a result of Eskom’s scheduled power outages, as well as public interest groups who wish to hold Eskom to account to please contact it at eskom@debeerattorneys.com.

How loadshedding has impacted local businesses

By Prinesha Naidoo for Bloomberg/Fin24

Businesses in South Africa have spent the past week struggling to operate amid rolling blackouts that affect their operations for as many as five hours at a time.

The power cuts by cash-strapped utility Eskom, which provides about 90% of the country’s electricity, are a “hugely damaging reality check,” President Cyril Ramaphosa said Thursday amid a fifth straight day of blackouts.

The reductions may cost the country as much as R5-billion rand a day, according to the Organisation Undoing Tax Abuse, a civil-society group.

Bloomberg visited some businesses during blackouts to see how they were coping with the situation.

Suzanne van Weely said she is throwing out as many as 15 loaves of unbaked bread daily – about a 10th of what she produces at her Supercalifragilistic bakery and coffee shop in Linden, Johannesburg.

“People don’t get the things they want and they walk out,” Van Weely said. With fridges shut down, cheesecakes, mousses and trays of tiramisu “are going off. It’s all stuff that costs money to make,” she said.

Across the road, trading at her father Ronald’s store, Magnificent Paints and Hardware, is at a standstill. When the power goes out, his regular customers – local contractors – stop working and so do his orders and sales.

Three of his six delivery trucks are parked in the yard while he sits in a back office lit only by a rechargeable lamp and the light from his smartphone screen.

“The power outages are way too long,” he said. “Four and half hours is way too long – most people work for eight hours so more than 50% of the workday is lost. They should make it two hours then we can at least get some business done.”

Around the corner, the screens on electronic fuel pumps at the Linden Garage gas station are blank. While owner Marco Dalle Ave jokes that his old mechanical pumps were seemingly more advanced and better suited to rolling blackouts, he is worried about turnover and having to pay staff.

“If you can’t operate, you can’t make money,” he says. According to him, a generator would cost more than R100 000 rand – which he can’t afford.

Francois Labuschagne, who also can’t afford a generator, said electricity shortages are killing business at Print2Go, his printing shop.

“It is like the economy has just been cut in half – half of the economy is operating half of the day and it is not like there is a plan,” he said. “As a business owner, this is a ridiculous situation, we’ve got staff to pay – if the business goes under then staff lose their jobs.”

While the Rembrandt butchery has a back-up generator, power cuts still have a devastating effect, said Marco Huisamen, its manager.

With petrol prices close to record levels, running the generator is expensive and doesn’t provide nearly enough energy to keep all the lights on, fridges cold and meat band saws working all at once.

Source: EWN

The trade union federation has warned doing so would not solve the struggling utility’s governance and debt problems.

The Congress of South African Trade Unions (Cosatu) says it does not support a proposal to split up Eskom into three different entities.

The trade union federation has warned that doing so would not solve the struggling utility’s governance and debt problems.

The proposal to split Eskom into three separate firms was reportedly made by a task team appointed by President Cyril Ramaphosa.

Cosatu’s first deputy president Michael Shingange says any unbundling would result in retrenchments.

“When you unbundle and turn debt into equity, as they say, we [Cosatu] view that as part of retrenchment. Even if you don’t pronounce that you’re going to restructure or privatise, we view it as privatisation because you are going to invite private ownership.”

By Michael Holder for BusinessGreen

Upcyclers turn old desks, chairs, and carpets into new office furniture, saving money and delivering environmental benefits.

Making sure products and materials can be used again – rather than going to waste – is good for for both businesses and the environment. That is the premise that underpins the concept of the “circular economy”, an emerging sector the government estimates could deliver £23-billionn a year of benefits to UK businesses if resources were used more efficiently.

For example, one third of our office furniture – 300 tonnes per day – ends up in landfill.

Firms such as Rype Office create sustainable furniture from items that would otherwise get thrown away and is employing ‘upcyclers’ across its growing business to help turn the circular economy vision into a reality.

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