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3 things SA business owners need to look out for in 2024

Jan 31, 2024

Starting and running a small business in South Africa requires tenacity and determination. As we dive into 2024, the landscape is presenting its own unique set of challenges.

Whether you're already an entrepreneur or are considering taking the plunge into the world of business ownership, understanding these challenges and having a plan to address them is key to your success. In this blog, we'll dive into the challenges South African small business owners are grappling with this year and offer you some valuable tips and insights on how to tackle them head-on.

1. Continued Load Shedding

Loads shedding has been keeping South Africans up at night since 2007. If you've been following the news, you're probably aware of the grim impact it’s had on local businesses.

In the first quarter of 2023, the SME Confidence Index revealed that over 40% of surveyed entrepreneurs had been directly impacted by ongoing load shedding. In addition, 60% of township businesses are forced to shut their doors during load shedding, according to a report from Nedbank Insights in partnership with the Township Entrepreneurs Alliance (TEA).

The consequences are far-reaching, with nearly 66% of business owners resorting to job cuts due to load shedding. This hit particularly hard in sectors such as food and beverage and manufacturing. These businesses aren’t just struggling to keep the lights on—they're fighting to keep their doors open.

As a small business owner facing another year without consistent power, it’s impossible to ignore the reality: load shedding is persisting for the foreseeable future.

Stay Ahead of Load Shedding

  • Be proactive: Don't wait for customers to ask about delays or appointments—take the initiative. If you foresee any hiccups due to load shedding, give them a heads-up.

  • Adapt your schedule: Create a work schedule that lets you manage your hours around load shedding times. This way, business can keep moving even when the lights go out.

  • Collaborate: Consider co-investing in backup energy sources with neighbouring businesses to work together to combat the challenges posed by load shedding.

  • Get paid: There’s nothing worse than turning away customers because your card machine isn’t working. Look into alternative options that ensure you can get paid even when the power is out.

2. Cost of Living Crisis

The cost of living crisis in South Africa has reached a point where household budgets are being stretched to their limits. Families are grappling with the harsh reality of surging climbing prices—even staples like maize meal and samp have seen their prices surge by nearly 30% in a year.

South African fund managers agree that the next move for interest rates will be a downward one. It's a glimmer of hope but they also sound a cautionary note: the full impact of the current elevated interest rates has not yet been fully felt.

What this means is that consumer spending is likely to remain under strain for the first half of 2024. As consumers tighten their belts and spend cautiously, businesses may experience a downturn.

Combat the Cost of Living Crisis

  • Communicate: Be open and honest with your customers. If you need to adjust prices due to the rising cost of living, explain why. Transparency builds trust.

  • Spend smart: Take a close look at your operations. Are there areas where you can tighten your belt without compromising quality? Streamline processes and be mindful of how you spend.

  • Reward loyalty: Consider revamping your loyalty programs. Make sure they offer real value to your customers, encouraging them to stick with you even when times are tough

  • Team up: Collaborate with other businesses on joint promotions and partnerships. This can help you increase sales and attract new customers.

  • Add options: Explore new products or services that fit into your customers’ budgets. For example, if you sell cakes for special occasions, consider adding smaller confectionaries to your offering so customers don’t have to wait for birthdays to splurge.

3. Marketing on a Budget

The days of easily promoting your brand on social media, especially for small businesses, have come to an end. It's now incredibly tough to reach your target audience online—and even if you get your content in front of them, getting them to engage is a whole different struggle.

While creating engaging video content is a proven way to garner attention on Facebook, Instagram and TikTok, it's often out of budget for small businesses. Not everyone can afford high-quality video production.

Creating content that engages your audience is a challenge for businesses with limited resources—it's a classic case of "keeping up with the trends" versus the reality of tight budgets.

Create Content That Makes an Impact

  • Go organic: Paid ads are pricey, but don't forget the power of free! Regularly post to your social media accounts and interact with your followers to build a community.

  • Show behind the scenes: Let your audience in on the action. Share your creative process, the hard work you put in, or fun moments. People love to feel connected and see the story behind your brand.

  • Run a competition: Team up with other local businesses to run a competition. Each business contributes a prize, then asks audiences to follow all of the brands and share the post to enter.

  • Keep it real: Authenticity is key. Share real stories, real challenges, and real successes. People love to connect with the human side of your brand.

Give Your Business the Savvy Edge in 2024

Despite the challenges that South African small business owners face in 2024, there's nothing more empowering than starting your own business—even if it’s a side hustle while you work out the finer details. The key is to do it the smart way, and that's where Savvy comes in.

Instead of building an entire website, it's quick and easy to create your professional online presence with our code-free templates. Whether you're just starting out or looking to enhance your existing online presence, Savvy helps you get found in search with our SEO capabilities.

Start building trust, generating leads, and getting paid the smart way with Savvy.