According to a study conducted by UBU International in Bellville (Cape Town, South Africa), only 15% of business owners and managers interviewed said the South African government’s lockdown regulations did not impact their business negatively.
UBU is a mobile discovery, payments and rewards platform for digital and physical commerce. We aim to help small and medium businesses grow, despite the tough circumstances they’ve been facing throughout the South African coronavirus lockdown.
The study saw 60 business owners and managers from retailers, restaurants, coffee shops and spas being interviewed in what was once a bustling Bellville neighbourhood precinct during the pre-COVID era.
According to the company’s Head of Partnerships, Tony Mallam, business owners were more than happy to participate in the survey and share their challenges in a quick interview.
“We sent a small team of field agents into the market to understand a little bit more about the challenges facing businesses in the Bellville precinct,” Mallam said.
Bellville business owners have been looking for solutions
“One of the most interesting points of feedback we received from our field agents was how valued they felt by the business owner or manager who told us that throughout the lockdown, we’re the first to enter a neighbourhood and ask them questions and listen to their challenges with intent to assist them in finding solutions.”
Valuable data about the impact of the pandemic on businesses
Further data from the study indicates over 70% of businesses suffered a revenue loss of more than 25% since the pandemic forced South Africans into lockdown, while almost 30% of respondents said their total revenue had dipped more than 50%.
Mallam was not surprised to see the number of businesses that succumbed to staff cuts as a result of the lockdown measures imposed by the country’s State of Disaster declaration.
“We have seen 42% of businesses in this area having to cut their staff costs by either retrenching staff or offering short pay options,” he said. “This comes as no surprise considering the revenue declines experienced by these businesses.
Desperate times call for decisive measures
Businesses have been desperate to keep customers coming back for more while still hunting for new customers they could attract through their doors, which is evident through the survey results displaying 81% of respondents having increased their social media exposure as a strategy implemented to deal with the pressure of COVID-19 on their business.
Of the businesses which fell into the food/drink category, 36% have decided to offer deliveries for the first time in their existence, which plays to the desperation of business owners during the pandemic in which business has struggled to reach pre-lockdown levels of normality.
Although more than 70% of businesses surveyed do not have a loyalty programme in place, most businesses felt that retaining their existing customers was not much of a challenge, while almost all respondents felt attracting new customers was a major challenge.
“It’s been fascinating to see how business owners have shifted their priorities and adopted new ways of doing business.
“As these businesses may not find retaining their customers to be a challenge, they certainly are finding it difficult to attract new ones while the pandemic keeps people away.
“They have no choice but to adapt and ensure they try new means of reaching their customers, such as offering deliveries themselves, partnering with a third-party delivery service or just generally adapting the way they do things,” Mallam concluded.
Considering that Mallam and his team conducted these surveys in just a single week, the results are an insight into the challenges faced by small business owners and their staff during these irregular times.
With no sign of SMEs coming out from this anytime soon, many business owners will be looking to third-party providers as they seek new and innovative ways to differentiate themselves and attract new customers within a saturated market.
If you want to learn more about how your business can survive the pandemic, have a look at our Small Business Survival Kit, which offers some great tips and nuggets for ultimate small business survival.
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