Lights out, prices up: SA entrepreneurs weather economic tide
Record-high inflation and load shedding won't keep Mzansi business owners down.
SA entrepreneurs are trying their best to keep doors open amid load shedding and high inflation. Image: iStock
Did you hug an entrepreneur today? Truth is, they might really need it because running a business is no child’s play.
While the entrepreneurial voyage is naturally tough, staying afloat amid load shedding and record-high inflation has added to the pressure.
As global entrepreneurship week kicks off, The Citizen caught up with some local entrepreneurs to find out how they’ve managed to keep doors open in the current economic tide.
‘Whatever they’re willing to pay’
Tembisa tailor, Karabo Maja said he’s been forced to pause operations during periods of load shedding due to the absence of backup power.
“Without electricity, I cannot sew,” he said.
Maja told The Citizen he’s been in business for nearly two years, but has since had to increase prices to cope with rising inflation.
“I have to buy material at a high price,” he said.
However, Maja’s attempts have been met with mixed reactions as some customers often refuse to pay higher prices, leaving him with no choice but to compromise.
“I have to accept whatever they’re willing to pay because without that money, it’s a total loss for me,” he explained.
ALSO READ: Rugby World Cup win for local businesses
Everything is so expensive
Constantia Bakery has found a way to navigate the power crisis buy syncing their operations with Eskom’s ever-consistent load shedding schedule.
“We work around the load shedding schedule, when it’s accurate,” operations manager Maurice Jardin told The Citizen.
As soon as the lights go off, all baking activity comes to a standstill at the Roodepoort bakery.
“We try to prepare everything before power cuts,” Jardin said.
Despite the ongoing energy crisis, Constantia Bakery has managed to keep up with orders, provided they’re received well in advance.
“We can fulfil about 90% of orders,” Jardin said, explaining that customers are warned against placing orders at the last minute.
“If they give us enough time, we usually work around it,” he added.
The ripple effects of record-high inflation have infiltrated various sectors of the economy, causing most businesses to make price adjustments to mitigate rising input costs.
In response, consumers have had to dig deeper into their pockets to afford basic necessities, while having little to spend on luxuries.
“By putting up your prices, you’re selling less because people are tightening their pockets,” Jardin said.
The manager also noted some changes in buying patterns among his customers.
“Before they’d take bread and cake, but now they’ll leave the cake and take an extra loaf of bread,” he said.
High input costs and low profit margins also affect the ability of entrepreneurs to create jobs, as many are forced to trim their labour force to keep operational costs low.
“If there was an opportunity to employ another person, you won’t employ that person because you need to make up for all the added expenses,” Jardin said.
ALSO READ: Take your small business to the next level
Load shedding proofed
Grounded at Echo, a café based in Villieria, Pretoria, is seemingly well-armed against Eskom’s power cuts.
Speaking to The Citizen, manager Nolo Letlaka said the business had a generator and solar panels to keep operations running during load shedding.
Like most food outlets, the café cooks meals using a gas stove, making it easy to keep up with customer orders.
The cost of running generators to keep the lights amid power cuts has become the new normal for most businesses.
Letlaka said Grounded at Echo spends about R900 weekly on fuel costs.
The north eastern Pretoria café has not been immune to the gruesome effects of record-inflation – having adjusted prices to cushion themselves against the tough economic climate.
“We had to up our prices because of inflation. It’s not really a huge price increase, so our customers haven’t responded negatively to it,” Letlaka told The Citizen.
“It’s just part of business, I guess,” he said.