Too little too late for North Coast small business owners

A wave of business closures is expected to follow hard on the heels of the national lockdown, with small business owners saying they face immense difficulty when lockdown is lifted.

President Cyril Ramaphosa’s announcement last week that the country would move from a level 4 to a level 3 lockdown at the end of May came too late for many small businesses, according to the National Small Business Chamber (NSBC).

With no imminent sense that lockdown will be lifted, many North Coast small businesses face months of struggle to stay alive.

The national treasury predicts that more than 2.5 million jobs could be cut as a result of the coronavirus pandemic, with wages and salaries expected to fall by as much as 30 percent.

A number of small business owners told the Courier they did not think they could continue operating their businesses for more than three months in the current conditions.

One painting contractor, who has been operating since 2003, said with cash flow abruptly cut off 50 days ago, he had no choice but to permanently close shop.

“Unfortunately I did not have enough cash flow to keep my business afloat for another few months until the lockdown eases and we are allowed to operate again.”

With no revenue being generated for the past two months he was forced to close his doors and retrench 20 employees.

Barry Chapman of KZN Plumbing has retrenched 20 of his 39 staff, and was worried that the continued disruptions would cost his business even more casualties.

“While the maintenance side of the business is still staying afloat, it is the construction side of our business that has suffered,” said Chapman.

The impact of the lockdown on the construction industry has been particularly hard. Industry experts have warned that the sector could lose more than 62 percent of its workforce in the next 18 months if the sector is not opened soon.

Bruce Wilson of construction company Union 3 said he had laid off 15 workers so far, and believed there could be more if the industry is not opened up very soon.

Independent contractors agreed government’s efforts were insufficient and came too late to prevent businesses from laying off their workers.

“Unless the government compensates what businesses have lost, there will be a big wave of bankruptcies and unemployment. We still have all these fixed operating expenses that still exist on a monthly basis, so that’s where the help needed to be,” said a landscaper and garden service operator who laid off 18 employees last month. He has not been able to access the Ters relief promised by the government.

According to iLembe Chamber of Commerce CEO Cobus Oelofse the Covid-19 pandemic has been a major shock to an already weak economy.

“With businesses in distress and the resulting personal hardship growing on a daily basis, there is a realisation that the economic fallout from the pandemic is not a short or even medium-term challenge. The partial unlocking of trade, through a risk adjusted level 4, is perhaps only the end of the beginning.

“I can only agree with trade and industry minister Ebrahim Patel who said that all the signs of the storm can be seen, although the extent of the damage will only be clearer once we get through the worst of it. The Chamber recognises that the hard work is still to come, with consumption, expenditure both induced and autonomous consumption, being curtailed for some time. The challenge is to assist businesses, and to influence all sphere of government, to adequately prepare for the next phase of the crisis,” said Oelofse.

Information on the Covid-19 Small Business Relief Centre can be found at www.nsbc.africa/COVID-19.

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