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Impact of COVID- 19 and actions businesses can take to mitigate the effects of COVID-19

Current state of the economy

- The increase in unemployment rate (especially in the young population and black majority of South Africans.)

- The GDP fell by just 16% between the first and second quarters of 2020 giving an annualized growth rate of -51%

- Restricted activity for some sectors of the economy. Tourism, alcohol and restaurants are suffering the greatest brunt.

How has COVID-19 affected SMEs

- Analysts predict that 60% of SMEs may close before the crisis is over

- Low awareness of opportunities especially those presented by online platforms

- Lack of financial knowledge remain a barrier to SMEs accessing the required support

- Lack of resources to sustain longer periods of recession. Many already closed down

What can SMEs do to mitigate challenges during this pandemic?

- Leverage technology to reach new customers

- Develop clear market access strategies

- Get educated on the financial support you can get as an SME

- Diversifying activities in order to withstand shocks associated with the lockdowns

- Prioritize cost control e.g., reducing rentals and staff costs

How do we manage our finances this year?

- Try to save when you can. Avoid unnecessary costs.

- Be vigilant

- Look at your incoming and outgoing and consider what adjustments you can make to put yourself in a better position going forward

- Focus more on liquidity and survival. Profiteering In this environment is not a sustainable strategy

How do we prepare for the 2021 financial year?

- As auditors there is need to maintain skepticism. Many businesses may no longer be going concerns

- As accountants, closely review income streams and observe those which present risks

- Building relationships and evaluation sustainability of existing business relationships

If this message appeals to you and you are serious about finding real solutions, kindly book a free session on (link) and we’ll get back to you immediately.

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Created  by Mac Duke The Strategist 083 234 2875