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How small business owners can secure their business today – and thrive tomorrow

Article written by Suzanne Morel (Country Manager Mastercard, South Africa)

Small businesses are the engine of the South African economy, representing 98 percent of all businesses, creating more than half of the private sector workforce and contributing a third to South Africa’s GDP. Their accomplishments and failures cause knock-on effects that impact innumerable lives and local communities in long-lasting ways, and this will be even more pronounced as effects of the COVID-19 pandemic aggravate an already struggling economy.  

For most small businesses, cashflow is everything: it helps companies to ensure that they always can pay staff at the end of the week, stock inventory and put aside money for a rainy day. If SMEs fail, then jobs are lost and supply chains suffer. The survival of SMEs is a matter of socio-economic survival. These are extraordinarily challenging times for entrepreneurs – safety precautions limiting foot traffic and lost revenue making cash flow a challenge and financing often a necessity.  

For many, the shift to online commerce means quickly getting up to speed on digital payments, cybersecurity, and more. Nonetheless people who go into business for themselves aren’t ones to shy away from challenges. The determination that has taken you this far can, with a powerful support system, get you through these next few months.

At Mastercard, our business is to support businesses of all sizes, creating opportunities to reimagine, reinvent and refresh themselves. Small businesses in particular are the lifeblood of any community, and ensuring these businesses survive and thrive means ensuring a better future for us all. Here are three areas that will be critical to unlocking that potential and propel small businesses forward:

Getting digital

Mastercard data shows that small businesses who were not able to transact digitally were hit hardest by the pandemic, with much lower chances of long-term survival than larger merchants. That’s why we’re democratizing digital, partnering with the big players across the globe to help small businesses get online fast, from e-commerce platforms to payment acceptance and, critically, cybersecurity vulnerability assessments. Mastercard’s partnership with Google and Standard Bank enables South African SMEs to move their businesses online, accept digital payments and attract more customers through the free access to Standard Bank’s SimplyBlu solution.

Getting paid

If you’re a retail business, it’s not enough to offer choice of payments options beyond cash. People are seeking safer, touch-free experiences – and they’re more willing now to use their cards for everyday, small-ticket items. A recent global Mastercard study revealed that 75% of South African banked customers are using contactless payments, citing safety and cleanliness as key drivers. In the Middle East and Africa, 70% of respondents said they are now using some form of contactless payment and 81%  said they will continue to use contactless post-pandemic. However small businesses also need to ensure they get paid – ineffective cash flow management is a major reason why small businesses fail. Take the time to fully understand your financial position, not only to find opportunities to save and to discover jams in supply chain payments, but to determine whether you’re eligible for any stimulus grants or loans. You may already have access to resources at your fingertips via your Mastercard BusinessCard.

Getting capital

Prioritize your immediate needs – whether that’s pivoting to an online commerce platform, finding new ways to communicate with your customers and your employees, or evolving your own offerings to meet new consumers demands and expectations. But getting access to the capital required to make these changes isn’t easy – more than half of small businesses who apply for financing receive less than what they seek or none at all, and 70 percent of women entrepreneurs are under-served or unserved altogether. Improving financial strength and resiliency is important, Standard Bank’s corporate and business credit card solutions provide easy access to credit including supplier management which provides accelerated cash flow and eliminates the cost of chasing collections.

As you navigate this unfamiliar landscape, think of these as helpful guideposts that will not only help you navigate this unfamiliar landscape, but arrive on the other side of the crisis stronger, more resilient and better equipped for the digital economy.

Tools and insights to help you along your digital journey:

What’s your digital readiness?

How do you choose a domain name, create a website, and harness social channels to reach your customers and find new ones?

What steps can you take today to reduce cyber risk? How to go about opening your digital doors?

How to go about opening your digital doors?

Mastercard is a proud Partner of the NSBC