Covid-19 is the final straw for small business owners after economic downturn

I am one of the many thousands of SA entrepreneurs who has been left with no choice but to close down their business as a direct result of Covid-19. Just as those living with the virus are telling their stories to remove associated stigmas, small business owners must also speak out to destigmatise Covid-19-induced business closure.

My company was launched four years ago as the product of a lifelong passion for travel and a desire to help SA business leaders take advantage of the positive aspects of globalisation. In 2015 I approached my mentor at Investec and asked that it consider backing myself and another young entrepreneur to start a venture that would take up-and-coming SA business leaders to leading innovation hubs around the world so they could learn how global thought leaders are solving industry-specific challenges.

With my mentor’s support we pitched the company vision to Investec’s then CEO, who astonishingly agreed to support us. We decided to call the new company En-novate, and our motto was “Growth through global exposure”. When I look back at the nearly 1,000 emerging business leaders we took to 10 countries over the past four years, there are three specific trips I believe demonstrate the positive impact we aimed to make on our country.

One such trip in March 2017 was for #FeesMustFall leaders to Rio de Janeiro, Brazil. The goal of that trip was for the student leaders to engage meaningfully with Brazilian policymakers, students and academics from a fellow Brics country that offers free public university education. Upon our return home, the delegation presented a thorough report-back to Standard Bank’s CEO, where some of them shared how the trip introduced nuance into their thinking around the practicalities of implementing free tertiary education.

Through the science & technology department, the Council for Scientific and Industrial Research (CSIR), Investec, Discovery, MultiChoice and AB InBev, we took many hundreds of entrepreneurs and innovators to places around the world where they could gain global exposure.

For a number of our participants the trip was their first time overseas, and we aimed to show them that they are indeed internationally competitive. We took a group of medical technology entrepreneurs to San Francisco with Discovery in November 2016 and on the second day of the trip our group met Launchpad Digital Health, a prestigious digital health accelerator programme. The very next day one of the entrepreneurs applied to the programme, to which she was almost immediately accepted. She shortly afterwards returned to the US to participate in the accelerator and today her Johannesburg-founded start-up is operating successfully in North America.

As part of President Cyril Ramaphosa’s drive to raise $100bn of new investment, and in partnership with Business Leadership SA (BLSA), last April we took a group of 42 corporate leaders and entrepreneurs under the age of 40 to Silicon Valley. The purpose of SA’s first Young Investment Roadshow was to understand how the US technology sector views opportunities in SA, and for us as the next generation of business leaders to articulate to US investors why SA should be on their radar.

One of our participants, a successful private equity specialist, stood in front of two extremely high-net-worth investors and told her life story of having grown up in a township. She changed her name to attend a better school during apartheid, and overcame much adversity to eventually cofound a private equity vehicle with a major bank. Her story exemplified to these investors just how much untapped talent exists in our country just waiting to be unlocked.

Unfortunately, our company was severely affected by last year’s dramatic economic downturn, which saw business confidence drop to its lowest level since April 1985. Corporate budgets were slashed to avoid retrenchments, and there was little extra money to spend on learning & development, enterprise & supplier development or marketing. My company went from doing on average 15 trips a year to just six in 2019, which forced us to retrench most of our staff. This devastated me as a founder, considering that most of my team had left stable corporate jobs because they believed in the company’s vision.

Despite the mayhem that 2019 brought to local small, medium and micro enterprises (SMMEs), by last month we had somehow managed to build enough of a sales pipeline in the hope of surviving another year. Then Covid-19 struck, and we simply do not have enough cash in the bank to sustain us for an indefinite period during which international travel will not be possible.

Author :   Dan Brotman   (Original publication)
Updated :     (Published :   2020-04-11)