The coronavirus pandemic continues to take its toll on the economy, with data from Stats SA showing that liquidations rose 49% year-on-year in March. According to the statistics, the liquidations hit small, medium and macro enterprises (SMMEs) the most. A total of 216 companies in various sectors were liquidated in March, compared with 178 in February.
As a result, it is crucial for SMMEs to identify the trends impacting their businesses and finding ways to leverage new opportunities. Aon South Africa, risk advisors and insurance brokers, delves into the top five trends affecting the SMME sector:
1. Changing Consumer Buyer Behaviour
The key factor in demographics is not just how the world’s population will grow, but how consumer buyer behaviour is changing amidst an upended world. Failure to innovate and meet customer needs was one of the top ten risks, rated at number nine in Aon’s 2019 Global Risk Management survey.
2. Technological Reliance
As companies become more reliant on technology, technological developments and increases in data and analytical power create unlimited opportunities for business. But it also bring risks around cyber security and data privacy.
3. The Rise of Intellectual Property
A misalignment on the value of data, information and intangible assets, such as IP of a business could have dire consequences. “We currently find ourselves in a business environment where a huge shift is taking place from tangible to intangible assets, making it crucial for companies to identify what its value-producing assets are and to re-evaluate its risk and liability in this space,” says Clayton Ellary, from Aon South Africa’s Commercial Risk Solutions Division.
4. The Resilient Workforce
According to Aon’s Rising Resilient report, businesses will need to recognise the impact the pandemic has had on their employees’ physical, emotional and financial wellbeing. For employers that get wellbeing right, the effort can help their teams perform more effectively and productively, and foster resilience, bringing adaptability to change, sense of belonging and ability to reach one’s full potential.
The COVID-19 pandemic has been a major catalyst to a host of serious business challenges that led to greater levels of insecurity and business failures. SMMEs face greater risks, possibly even closure, if a major debtor defaults, as their balance sheets are often not strong enough to pull them through a major and extended financial crisis.
It is therefore important for SMMEs to understand the trends in order to make the right decisions.
“It is a task best undertaken with the assistance of an expert broker by your side. A comprehensive risk assessment will establish how prominently new trends feature in your business, so that you can make informed decisions that will guide your business strategy beyond the pandemic,” concludes Clayton.
Click here to read the Aon article.