A recent report published by McKinsey & Company, a global management consulting firm, reveals the ways in which small businesses in South Africa are navigating the road towards recovery during COVID-19. After more than a year of lockdown and restrictions, SMEs, who make up 98.5% of the total share of businesses in South Africa, are starting to rebuild and rework their business processes to adapt, survive and thrive.


On top of demand decreasing during hard lockdown, a number of SMEs are fundamentally unaware of the existing funding options available to them, to get them back on their feet. In a recent survey, McKinsey & Company found that 36% of all respondents were not receiving any form of government loan or support. A quarter of these respondents weren’t even accessing UIF or PAYE. The main reasons? Entrepreneurs were not aware these financial aids existed or did not know how to access them. Despite the majority of SMEs taking up financial aid, a significant amount aren’t.


While these challenges exist, McKinsey has found that SMEs are taking a number actionable steps towards rebuilding as the pandemic evolves. These include:




Various industries have taken advantage of available technology to help them navigate the new normal. The use of VPNs in South Africa has grown significantly over the last year and companies are utilizing its features to mitigate any security risks while working from home. A local business process outsourcing (BPO) company even used the technology to move their entire call centre team to remote working in as little as five days.


Market research


The consumer market looks a little different. More people are comfortable shopping online and there are more companies playing in the e-commerce space. SMEs are starting to adapt their marketing strategies after completing fresh market research to meet the new needs and demands of customers. 


Social distancing, curfews and cashless payment solutions have significantly changed the landscape and SMEs are investing in market research to see where demand lies.




While most SMEs focus on cash flow and sales, the report finds that those who also prioritise improving efficiency are making a positive difference to their bottom line. By using project management tools and insights, companies are managing to get a better view of their productivity levels and where they can improve.


Employee empowerment


Investing in upskilling employees isn’t only about improving their day-to-day, but has also proven to positively impact business growth. When SMEs empower their senior staff to take on more responsibility it frees their time up to focus on the bigger picture, from growth strategies to sustainability efforts. 


While SMEs are largely dependent on themselves to rebuild during these uncertain times, partnerships are found to be a positive route to supporting SME growth. The report has emphasized how both government and private sector support can further boost sustainability and future success of SMEs.

These efforts should not be put off, but prioritised to mitigate as much of the negative effects of the COVID-19 crisis as possible, as the authors of the report emphasize. “When the pandemic will peak in South Africa is uncertain. It is imperative therefore that efforts to protect SMEs move with speed and decisiveness not only to cushion the worst of the impacts of the crisis on livelihoods but to help ensure a swifter recovery for the broader economy.”