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SMEs can recession-proof their businesses

FNB Business Regional Head for Gauteng South West, Andiswa Bata
FNB Business Regional Head for Gauteng South West, Andiswa Bata

JOHANNESBURG – OPPORTUNITIES still exist for small and medium enterprises (SMEs) in spite of the South African economy falling into recession, coupled with a dim economic outlook.

A lower forecast for economic growth globally, challenging local trading conditions owing to inconsistent power supply and currency volatility and rising operating costs amongst several factors.

However, the SMEs must be agile to make the most of some opportunities, according to an executive in the banking industry.

Andizhan Bata, FNB Business Regional Head for Gauteng South West, proposed a cash buffer, inventory management, creative cost-cutting ideas and exploring new markets.

“There may even be an opportunity to acquire/merge with a competitor or another company that complements your own offering,” she said.

“Having spare cash sets you up as a potential buyer, at a time when business valuations may be attractive. If the pie isn’t getting bigger, seek to secure a larger slice,” Bata added.

She urged SMEs to identify those markets and geographic areas where opportunities still exist.

Companies have also been urged to use debt funding wisely as well as supporting other local businesses and brands.

“Do not underestimate how much your own personal and business buying power is helping to stimulate the local economy, creating employment and keeping fellow businesses thriving,” Bata concluded.

– CAJ News

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