Home » Economic storm? SA’s entrepreneurs are making umbrellas and selling water

Economic storm? SA’s entrepreneurs are making umbrellas and selling water

by Media Xpose

By Dov Girnun, CEO of Merchant Capital

For the past few years, all we’ve been hearing is that it’s time to batten down the hatches. There’s an economic hurricane on the way. We’ve barely made it out of Covid, and now there’s a global recession coming in fast and furious. For most entrepreneurs, there’s only one question on their minds right now: how do we weather the storm?

For a start, don’t panic. This is a time for cool heads and being pragmatic. It’s time to focus on the things we can control, and not get emotional about the things we can’t. The moment we start reacting with emotion is the moment we lose control of the situation.

Focus on sustainable growth. We know that markets are going to adjust their expectations around valuations. Interest rates are rising, and there’s no ‘free money’ anymore. That’s not necessarily a bad thing. The ‘grow at all costs’ approach is no longer the flavour of the month. In the current climate, investors, shareholders and stakeholders are looking for businesses with profitability in the long term. They’re more interested in a near-term path to profitability than simply building revenues. Building sustainable, profitable businesses is the only way to go.

Remember the lessons of Covid. Many entrepreneurs and small businesses took a beating during the height of Covid. But if we look back at those dark days now, we’re seeing that overall, our ‘bouncebackability’ (I love that word!) was far greater than anyone could have predicted. Our own anecdotal evidence shows that many entrepreneurs actually emerged from the crisis stronger. We survived then by being adaptable, quick on our feet, and responsive to change. It’s time to keep doing just that.

Back in 2019, I wrote an article titled ‘South African entrepreneurs: It’s time we rediscovered our optimism’, in which I spoke about the legendary resilience and optimism of local entrepreneurs. It was a call for us to remember who we are, and to keep looking for opportunities when times are at their toughest.

I was reminded of this article all over again a few months ago when I was fortunate enough to attend a programme at Harvard Business School called  Owner/President Management (OPM), along with 155 other entrepreneurs from around the world. In that company, I was probably in the bottom 2% of wealth – but in the top 5% of ability to build a business in a volatile economy.

Why? Maybe it’s because first-world entrepreneurs can afford to be narrowly focused. In South Africa, we deal with a range of challenges every day. Loadshedding. Politics. Potholes. We do everything from strategy to marketing to product to leadership. In short: it makes for more versatile, resilient, hungry entrepreneurs.

But what we all had in common was the entrepreneur’s unshakeable optimism. Every interaction we had reflected the ‘glass half full’ mentality.

I have no doubt we can weather this storm. But to do it, we’ve got to over-prepare for the future. In uncertain times, you need to readjust your strategies.

Simplicity scales. Complexity doesn’t.

Remember that speed is one of the greatest business strategies.

In uncertain times, your business ‘why’ has never been so important

And keep your eye on the future prize. Be sure you’re building the business of tomorrow, today. That way, when the sun comes out again, as it always does, we’ll be better, stronger, and faster.

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