Power cuts and petrol price hikes: tips for SMEs

After two years of lockdown restrictions, South Africa’s economic recovery is being thwarted by a number of adversities on the local and global fronts.

Locally, several antagonistic forces are at play, namely significant fuel price hikes and the ongoing bouts of load-shedding, which put additional pressure on SMEs in the country.

Within this context, SME owners need to focus on finding creative ways to circumvent these challenges to maintain a semblance of “business as usual”.

SME owners now need to start preparing for these challenges as long-term realities.

A spotlight on load-shedding

Load-shedding has led to significant revenue losses, with the most recent figures presented by technology company Yoco suggesting that about 30% of small businesses have lost up to 10% of their annual revenue due to the onset of load-shedding.

There are several theories on how much longer the power cuts will continue, with one source suggesting that it could persist well into 2025.

Tips for SMEs to reduce the effects of load-shedding:

  1. At a minimum, SMEs should have preventative measures in place to reduce damage to their property, which includes installing surge protection plugs.
  2. Invest in battery-powered backup technologies like point-of-sale devices.

Effects of fuel price hikes

SMEs who deliver or collect goods, or transport people are directly affected. Small businesses are also affected when supplier prices escalate to accommodate rising fuel prices.

Fuel hikes can drastically reduce consumers’ disposable and spending power, which has a knock-on effect on SMEs’ bottom line.

Tips to overcome fuel price increases

SMEs can prioritize vehicle maintenance. For example, tyre pressure should be checked at least once a month and engines need to be serviced frequently and air filters should be kept clean.

Optimise your travel by using navigation apps to avoid peak traffic times.

Botha is the area manager at Business Partners Limited

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