Challenging months for SMEs

December and January tend to be challenging months for small and medium enterprises (SMEs) in South Africa and in certain cases, can even make or break a business. Depending on the industry in which these businesses operate, they may find themselves either lacking enough work to cover costs during the period, or struggling to keep up with the demands of the so-called silly season and potentially drowning from the workload.

While both experiences can be challenging for entrepreneurs and their ventures, it is critical that entrepreneurs put measures in place to navigate – and even benefit – from the months of extremes. In the case of retailers and tourist businesses whose businesses spike over the December holidays, capitalising on the frenzy seems obvious given heightened spending habits due to end-of-year bonuses, and tourism districts being awash with holiday makers.

But taking advantage of the season is not as easy as it may seem. For seasonal businesses, the December rush is often not so much a lucky windfall. Instead, it is a crucial time in which the venture must make as much money as possible in order to survive the quieter periods during the rest of the year. The damage of not planning sufficiently for this busy period can have long-term effects on the business. Whereas if a business over-estimates the seasonal increase, an oversupply of stock can be just as damaging on cash flow. Careful planning will also enable the entrepreneur to know when they should start turning business away to avoid over-commitment.

This quiet time is a crucial period of reflection, revisiting their business model, contemplating new products and services, evaluating their own performance over the last year, re-establishing bonds with family and friends, and recharging their batteries. During this period business owners should also set new challenges and goals for their business for the year ahead. The quiet time in a business’s calendar is an excellent opportunity for an entrepreneur’s self-improvement. [Read full article]

                              PRIME Solution would like to wish a peaceful festive season and a happy new year to all our clients and readers of the blog.