8 Million South Africans are spread across more or less 5 million formal and informal SMMEs (small, medium and macro enterprises). This contributes to 40% of our economy, meaning that our economy lives and breathes off the success of entrepreneurial small businesses.
Unfortunately, recent years have seen difficult scenarios challenging the growth and sustainability of many SMMEs. Load shedding, although now a recognised reality within South Africa, is a growing concern for business owners who see no end in sight.
Ways that Load Shedding Impacts Small Businesses
It’s no surprise that what impacts small businesses in South Africa ultimately impacts our economy, which is why it’s so vital to understand what changes load shedding is effecting.
Not only do the public need to understand the situations that these businesses find themselves in, but even the SMMEs themselves sometimes don’t realize what it is that’s holding their business back. That’s why we’ve spoken directly to some of these small business owners, to hear the effects of load shedding on their respective businesses:
- Stachia Conradie, an owner of a small brand consultancy said that: “We miss deadlines, and when we miss deadlines we get paid late. Work that was unsaved had to be redone, causing a loss in productivity.”
- Dr. JD, who owns a small animal clinic in Pretoria-East spoke about how the power cuts have affected not only her income but the quality of care that she can provide: “The power cuts mean we need to use a generator. Some surgeries can’t wait. The smells and noise coming from it causes trauma to animals who are already unwell. That doesn’t even take into account the amount of medicines and vaccines we have lost because they need to stay at a consistent temperature to remain viable.”
- Mark owns a small gym, which has been his lifelong dream that he has only just managed to realise in a small Johannesburg suburb: “I have had so many disappointed clients. People who are struggling to take classes in rooms with no aircon. Others are frustrated that half of the machines in the gym that require power aren’t working.”
It’s clear that no small business is immune to the effects of load shedding, yet we are not sharing these pains with each other openly enough to seek a solution. In further investigation, some of the worst and most commonly felt effects of load shedding we’ve seen in SMMEs are:
- Failed WiFi: WiFi is a basic need in business today, and as it relies on a power supply to operate… load shedding is not its friend. If businesses aren’t able to log onto their network, this prohibits access to emails, digital shop systems (i.e. online stock or logistic management systems), online banking, payment gateways (especially as mobile networks are now often affected by load shedding too), and basic communications.
- Poor staff morale: Your business performance is most often only as good as your staff performance, and when load shedding hits… morale dips drastically. This has a profound effect on productivity (during and post-load shedding), retention, and inter-office communication.
- Faulty ATMs: The retail and restaurant trades suffer significantly when ATMs stop working (particularly within shopping centers). Not only is this an inconvenience to customers, it often prevents them from shopping and might even mean that they choose to avoid certain centers when they think load shedding might hit.
- Loss of planning: As load shedding doesn’t always run on a schedule (i.e. emergency and unplanned blackouts), businesses have lost the ability to plan accurately for their months and years ahead, making both staff and client acquisition and retention immensely difficult.
- Inability to trade: Restaurants and retail stores are still very reliant on electricity, especially when they’re placed within malls with poor natural lighting. Without lighting and other basic requirements to operate, many stores are forced to close during load shedding hours (obviously leading to a drop in sales, reduced turnover, and other expenses).
- Broken equipment: We’re no strangers to power surges in South Africa. But while they might be more common than prior to load shedding, they’re no easier to deal with. Often an increased flow of current will lead to a shorted socket or, worse, damage to your appliances and electrical equipment.
- Bad traffic: Traffic in a city is bad enough, but when the robots stop working… it becomes so much worse (meaning missed meetings, loss of time, delayed deliveries, and far more potential for accidents).
- Compromised security: Shoplifting, blatant theft, compromised digital systems and shutdown firewalls… security turns off with the power. This leaves businesses vulnerable to all sorts of attack, and can even increase required insurance cover.
Solutions to Load Shedding
David Seinker, CEO of The Business Exchange, pointed out that the “reality is that many small business owners cannot afford to buy generators to keep the lights on during the rolling blackouts. For them, three or four hours without electricity will have a significant negative financial impact.”
What Seinker makes clear is that small businesses are finding themselves in a sticky situation. Without power, small business owners are rendered helpless, losing thousands of rands with each instance of load shedding. But, this doesn’t mean that they have no options.
Alternative power options, like solar energy, are real answers for small business owners looking for long-term solutions to sustain their businesses throughout South Africa’s unstable future. As technology has improved over the years, the installation and management costs of solar has drastically reduced, making it a viable path forward more than ever.
If you’re feeling the effect of some of these changes wrought by load shedding, get in touch with us below to talk about some alternative power solutions.