Latest news with #BusinessPartnersLimited
Zawya
2 days ago
- Business
- Zawya
Smooth business handovers: A survival guide for South Africa's entrepreneurs
In today's dynamic business environment, leadership transitions are inevitable. Whether due to a c-suite reshuffle, a merger, or an acquisition by a larger group, periods of transition can be destabilising for businesses of any size. In fact, research based on over 40,000 corporate acquisitions spanning over four decades has shown that 70% of mergers and acquisitions fail to fulfil their expectations. Amogelang Montane, human resources business partner at Business Partners Limited Amogelang Montane, human resources business partner at Business Partners Limited, believes that effective leadership is at the heart of any successful business transition. 'Any big change, when not managed properly, can result in operational inefficiencies, employee uncertainty, and even a knock to revenue. However, many of these results are often avoidable, and with a well-planned handover strategy, it's possible for your business to make it through these times of uncertainty.' While any change in leadership can be challenging to manage, Montane notes that mergers and acquisitions require particularly careful consideration – especially when a smaller business is being acquired by a larger company or corporation. 'When a business merges with another or is acquired by a larger group, the shift in company culture, operational processes, and management structures can cause significant disruption to the 'norm' employees have become used to. Small and medium enterprises (SMEs), in particular, may struggle to integrate into a larger corporate framework without a clear roadmap.' Montane lists four key considerations for entrepreneurs to ensure business continuity during these types of transitionary periods. - Clear communication Transparent communication with employees, customers, and other key stakeholders is vital. 'Ensuring that all parties are kept up to date about changes and their implications will help manage expectations and reduce uncertainty across the organisation,' says Montane. - Strategic planning A comprehensive transition strategy should be in place before any major leadership or structural change. This includes clear succession planning, especially for family-owned businesses and founder-led SMEs, notes Montane. 'These smaller, tight-knit businesses often face challenges when ownership or leadership is transferred. Without a structured succession plan, conflicts may arise, threatening the business's continuity,' he explains. - Talent retention It's estimated that 47% of key employees leave within the first year following a merger or acquisition, and 75% leave within the first three years. 'This is why keeping employees motivated and aligned with the company's vision during a transition is one of the greatest human resources responsibilities in a merger. The loss of talent after an acquisition can be so significant that it erodes value from the transaction,' says Montane. He adds that conducting due diligence around culture and operational processes is also critical when merging two organisations. 'While HR is responsible for supporting employees on a day-to-day basis, it is up to the leadership team to provide reassurance, guidance, and opportunities for professional growth to retain key talent.' - Financial stability Ensuring access to capital during periods of transition can help businesses to persevere through potential financial instability. 'As a financier to SMEs, we have seen first-hand how well-planned transitions supported by the right funding can ensure business continuity,' adds Montane. While leadership transitions can be daunting, they also present an opportunity for businesses to evolve and strengthen their competitive position. By implementing a structured approach, SMEs can mitigate risks and emerge stronger on the other side of change. 'As South Africa's SME sector continues to grow and evolve, businesses must embrace change as a constant. With the right leadership and strategic planning in place, transitions can be transformed into catalysts for success,' concludes Montane.
IOL News
2 days ago
- Business
- IOL News
Challenges and opportunities for SMEs for the year ahead
A crucial factor in the success of many of these businesses was having a proactive plan to address the challenges they encountered. Image: Pexels South African small and medium enterprises (SMEs) have had a tumultuous few years, affected by a broad spectrum of political and economic issues. Despite these challenges, many business owners managed to keep their businesses afloat, and some have even found opportunities for growth and development. A crucial factor in the success of many of these businesses was having a proactive plan to address the challenges they encountered. This was according to Jeremy Lang, Managing Director at Business Partners Limited, who unpacks the four major challenges SMEs continue to face and must find ways to navigate this year: Supply chain disruptions The 2024 national general election results were painted as a democratic milestone but brought, and continue to bring, uncertainty and fears of political instability. Geopolitical conflict also continues to affect supply chains, impacting global sentiment and lowering confidence levels among local SMEs. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading According to the PwC 2023 Global Risk Survey, supply chain disruptions were identified as the primary external contributor to company risk, a trend that persisted in 2024. The backlog at the Port of Durban, a key logistics hub, serves as a notable example of the significant delays affecting local rail and port operations. The recent increase in tariffs on South African exports to the United States will affect many South African SMEs in that value chain. 2. Loadshedding While South Africa has enjoyed a prolonged period of (mostly) uninterrupted power supply, power outages were an ongoing issue up until the second quarter of 2024 with a daily average of 2.5 hours without power. Major retailers like Shoprite reportedly spent a monthly R100 million on diesel when the country was experiencing Stage 6 load shedding. With recent, sporadic blackouts being implemented by Eskom in quarter one of 2025, there are concerns that the ability to meet the energy demand is still very much in doubt. Persistent rolling blackouts last year contributed to a reduced growth forecast by the International Monetary Fund (IMF). The South African Reserve Bank estimated that loadshedding reduced GDP growth by between 0.6 and 2% between 2023 and 2024. 3. Rising inflation Rising food and fuel prices, coupled with a weakening rand and increased debt-servicing costs, pushed inflation to a high of 5.6% in February 2024. These conditions, combined with a prime lending rate of 11.75%, meant rising operational costs and reduced profitability. Many SMEs had to choose between passing on price hikes to customers and risk losing market share or absorbing increased costs and eradicating profit margins. Although the interest rate is currently on a decline, it will still take a while until it is at pre-Covid-19 levels. 4. Limited access to funding Only one in five SMEs manages to secure the financial support they need to grow their businesses. In South Africa, 87% of small businesses have never accessed credit due to traditional lending practices like reliance on collateral and rigid credit scoring systems creating financial exclusion. This exclusion is particularly pronounced among small and early-stage enterprises which make up the 'missing middle' of SMEs and don't fit traditional financiers' one-size-fits-all requirements. The truth is that funding is available, SMEs need to demonstrate that they are well-managed businesses with growth potential. SMEs must approach funders aligned to their funding needs. Funders want to invest in operations that show viability, scalability and a good return on investment for both the SME and the financier. 5. Turning obstacles into opportunities Lang believes that 2025 may offer more innovative and forward-thinking business owners the chance to transform some of these ongoing challenges into opportunities. Love local As geopolitical tensions persist across the globe, businesses are increasingly sourcing materials and products locally. SMEs can capitalise on this shift by integrating into local supply chains of larger corporations. The South African Revenue Service (SARS) also strengthened this incentive by placing a 15% VAT as of 1 September 2024 in addition to its existing flat 20% customs rate on imports from foreign ecommerce retailers like Shein and Temu that have reportedly exploited tax loopholes and the de minimis tax rule, which used to allow small online purchases under R500 to be taxed only at a flat 20% customs duty, without VAT. This initiative is aimed at protecting local industries and improving revenue. Leverage green tech The growing demand for sustainable alternatives presents an opportunity for SMEs in the renewable energy sector. Businesses can adopt renewable energy to cut costs and reduce operational disruptions should load shedding resurface, as well as provide affordable and reliable solar solutions, battery storage systems, or energy-efficient appliances. Either of these approaches would make an operation attractive to green-conscious customers and investors. Inflate value When costs go up, customers tend to seek out products and services that are cost-effective. SMEs can capture market share by addressing inflation-driven concerns and providing high-quality, affordable solutions to their customers. To tackle these issues, SMEs may need to conduct research or even implement technological solutions such as artificial intelligence in their operations to improve internal processes, resolve customer problems, and reduce production costs. According to the Q4 2024 Business Partners Limited SME Confidence Index, when asked if their businesses had ever collaborated with other small businesses to cross-sell each other's products or services, 42.56% of SMEs responded that they had not, while 37.57% indicated that they had successfully collaborated. Partnering with other SMEs is another effective way to provide value for customers. Get funding-ready Both the challenge and the key to financial resilience during challenging economic times is gaining and maintaining access to capital. Funding enables SMEs to overcome the impact of inflation, load shedding, and supply chain disruptions; and to invest in alternative energy solutions. It supports cash flow which in turn allows entrepreneurs to invest in initiatives that help them to manage rising costs and maintain competitive pricing strategies. 'By embracing innovation, addressing operational challenges head-on, and securing the necessary funding, South African SMEs can build resilience and position themselves for sustainable growth,' says Lang. 'With the right strategies, these businesses can not only overcome current hurdles they are facing this year, but also unlock new opportunities to thrive in an ever evolving economic landscape,' he said.
The Citizen
3 days ago
- Business
- The Citizen
Challenges and opportunities for SMEs in 2025
2025 may offer more innovative and forward-thinking business owners the chance to transform ongoing challenges into opportunities. South African Small and Medium enterprises (SMEs) have been negatively affected by political and economic issues of the past months. SMEs play a crucial role in the country's economic growth and job creation. However, many owners managed to keep their businesses afloat, while some have found opportunities for growth. Before finding these opportunities, entrepreneurs had to devise a proactive plan to address the challenges they encountered over time. Jeremy Lang, Managing Director at Business Partners Limited, unpacks four challenges that business owners might encounter this year and how to navigate them. ALSO READ: Five tips for SMEs to build resilience in 2025 1. Supply chain disruptions 'The 2024 national general election results were portrayed as a democratic milestone, but they have brought, and continue to bring, uncertainty and fears of political instability. 'Geopolitical conflict also continues to impact supply chains, affecting global sentiment and eroding confidence levels among local SMEs,' said Lang. According to the PwC 2023 Global Risk Survey, supply chain disruptions were identified as the primary external contributor to company risk, a trend that persisted in 2024. The backlog at the Port of Durban, a key logistics hub, serves as a notable example of the significant delays affecting local rail and port operations. The recent increase in tariffs on South African exports to the United States will affect many South African SMEs in that value chain. 2. Load shedding He added that, despite South Africans enjoying long periods of uninterrupted power supply, the second quarter of 2024 was marked by frequent power outages, with a daily average of 2.5 hours without power. 'With recent, sporadic blackouts being implemented by Eskom in quarter one of 2025, there are concerns that the ability to meet the energy demand is still very much in doubt. 'Persistent rolling blackouts last year contributed to a reduced growth forecast by the International Monetary Fund (IMF). The South African Reserve Bank estimated that load shedding reduced GDP growth by between 0.6 and 2% between 2023 and 2024.' ALSO READ: Here are the dangers of loan stacking for SMEs 3. Rising inflation Lang said rising food and fuel prices, coupled with a weakening rand and increased debt-servicing costs, pushed inflation to a high of 5.6% in February 2024. These conditions, combined with a prime lending rate of 11.75%, meant rising operational costs and reduced profitability. 'Many SMEs had to choose between passing on price hikes to customers and risking losing market share or absorbing increased costs and eradicating profit margins. 'Although the interest rate is currently on a decline, it will still take a while until it is at pre-COVID-19 levels.' 4. Limited access to funding He said only one in five SMEs manages to secure the financial support they need to grow their businesses. 'In South Africa, 87% of small businesses have never accessed credit due to traditional lending practices like reliance on collateral and rigid credit scoring systems, creating financial exclusion. 'This exclusion is particularly pronounced among small and early-stage enterprises, which make up the missing middle of SMEs and don't fit traditional financiers' one-size-fits-all requirements.' Lang said funding is available, SMEs need to demonstrate that they are well-managed businesses with growth potential. 'SMEs must approach funders aligned to their funding needs. Funders want to invest in operations that show viability, scalability and a good return on investment for both the SME and the financier.' ALSO READ: Political uncertainties that will impact SMEs in the coming months Turning obstacles into opportunities He believes that 2025 may offer more innovative and forward-thinking business owners the chance to transform some of these ongoing challenges into opportunities. 1. Love local Lang said that as geopolitical tensions persist globally, businesses are increasingly sourcing materials and products locally. SMEs can capitalise on this shift by integrating into the local supply chains of larger corporations. 'The South African Revenue Service (Sars) also strengthened this incentive by placing a 15% VAT as of 1 September 2024 in addition to its existing flat 20% customs rate on imports from foreign e-commerce retailers like Shein and Temu.' These retailers have reportedly exploited tax loopholes and the de minimis tax rule, which used to allow small online purchases under R500 to be taxed only at a flat 20% customs duty, without VAT. This initiative is designed to protect local industries and increase revenue. 2. Leverage green tech He added that the growing demand for sustainable alternatives presents an opportunity for SMEs in the renewable energy sector. Businesses can adopt renewable energy to reduce costs and minimise operational disruptions in the event of load shedding resurfacing, as well as provide affordable and reliable solar solutions, battery storage systems, or energy-efficient appliances. Either of these approaches would make an operation attractive to green-conscious customers and investors. ALSO READ: How SMEs can leverage cross-border e-commerce opportunities 3. Inflate value Lang added that when costs go up, customers tend to seek out products and services that are cost-effective. 'SMEs can capture market share by addressing inflation-driven concerns and providing high-quality, affordable solutions to their customers. 'To address these issues, SMEs may need to conduct research or implement technological solutions, such as artificial intelligence, in their operations to enhance internal processes, resolve customer issues, and reduce production costs.' According to the 2024 Business Partners Limited SME Confidence Index in the fourth quarter, when asked if their businesses had ever collaborated with other small businesses to cross-sell each other's products or services, 42.56% of SMEs responded that they had not, while 37.57% indicated that they had successfully collaborated. 'Partnering with other SMEs is another effective way to provide value for customers.' 4. Get funding-ready Lang added that both the challenge and the key to financial resilience during challenging economic times are gaining and maintaining access to capital. 'Funding enables SMEs to overcome the impact of inflation, load shedding, and supply chain disruptions, and to invest in alternative energy solutions. 'It supports cash flow, which in turn allows entrepreneurs to invest in initiatives that help them to manage rising costs and maintain competitive pricing strategies.' NOW READ: SMEs' growth absent in Budget 3.0. Here's what entrepreneurs expected
Zawya
21-05-2025
- Business
- Zawya
4 ways to prepare your hospitality business for a South African winter
Tourism is a key economic driver in South Africa with its beaches, nature reserves, and bustling hospitality scene contributing approximately 8.8% to the country's gross domestic product (GDP) as of 2024. But as winter approaches, ill-prepared businesses struggle to keep the lights on. In June 2023, hotel occupancy rates in Cape Town reached 53%, while most hotel accommodations across South Africa were sold out in December of that same year. Kevan Govender 'Summer, especially in coastal areas, may be peak hospitality season, but winter can also hold opportunities for the astute and well-prepared business owner,' says Kevan Govender, regional investment manager at Business Partners Limited, who shares key strategies to help hospitality businesses thrive during the winter slow-down. 1. Understand seasonal trends Like weather patterns, consumer behaviour can also inform trends forecasts. Winter historically sees more interest in warm indoor spaces, comfort food, warm beverages, and winter getaways in the countryside. It also raises interest in health-related goods as the rate of colds and flu increases. 'If you know what's coming, you know how to prepare,' says Govender. 'Kauai is a brand that adjusts its offering seasonally and has found phenomenal success with its winter menus that feature warm bowls, soups, and a signature 'floo juice'. Look at the data and make informed adjustments in your business.' 2. Invest in maintenance Winter is the ideal time to deep clean, repair general wear and tear, and upgrade rooms or appliances. Business owners should prioritise preventive maintenance on heating systems, plumbing, and backup power solutions as load shedding persists year-round. Regular servicing of your business equipment ensures they function efficiently and last longer, saving you money on replacements. 'Use down time to tackle issues to ensure your property remains safe, efficient, and guest-ready when peak season returns,' says Govender. 3. Increase online visibility As of 2025, 66% of hotel rooms were booked online through Trivago, and AirBnB, indicating a significant shift toward digital booking platforms. This trend underscores the importance of hospitality businesses maintaining a strong online presence – especially throughout winter – for consumers planning special occasions, weekend getaways, or even a cosy night out. 'You should take advantage of digital marketing tools by sharing engaging, seasonal content featuring your warm, inviting space and winter menu highlights, or encouraging winter-themed guest reviews,' says Govender. 'Consider offering limited-time winter promotions or partnering with local influencers to extend your reach and procure sales directly from social media.' 3. Use credit wisely Traffic may slow down in winter, but the cost of running a business does not. Seasonal expenses like increased electricity bills for heating, higher water usage, retaining staff during low occupancy periods, and maintenance to weatherproof facilities can put pressure on cash flow. This is where credit, when used strategically, can become a valuable tool. A well-structured loan can help bridge cash flow gaps or fund upgrades that reduce future operating costs. Business Partners Limited's Asset Finance, for example, allows hospitality businesses to invest in solar, battery, and energy-efficient systems to help cut winter costs and ensure business continuity during load shedding while the Short-Term Finance assist with working capital. 'Understanding seasonal trends and using resources wisely will set small and medium enterprises up to manage through the winter and emerge stronger for the peak summer season. With the right strategies – and the right support – winter can become a season of growth, not just survival,' concludes Govender.
Zawya
14-05-2025
- Business
- Zawya
4 ways to thrive as a South Africa hospitality SME in winter
Tourism remains a vital pillar of South Africa's economy, contributing around 8.8% to the country's GDP in 2024. The sector thrives on the country's scenic beaches, wildlife reserves, and vibrant hospitality industry. However, as winter sets in, many businesses find themselves unprepared for the seasonal downturn. In June 2023, Cape Town's hotel occupancy rate dropped to 53%, a stark contrast to December when accommodations across South Africa were almost fully booked. 'Summer, especially in coastal areas, may be peak hospitality season but winter can also hold opportunities for the astute and well-prepared business owner,' says Kevan Govender, regional investment manager at Business Partners Limited, who shares key strategies to help hospitality businesses thrive during the winter slow-down. 1. Understand seasonal trends Like weather patterns, consumer behaviour can also inform trend forecasts. Winter historically sees more interest in warm indoor spaces, comfort food, warm beverages, and winter getaways in the countryside. It also raises interest in health-related goods as the rate of colds and flu increases. 'If you know what's coming, you know how to prepare,' says Govender. 'Kauai is a brand that adjusts its offering seasonally and has found phenomenal success with its winter menus that feature warm bowls, soups, and a signature 'floo juice'. Look at the data and make informed adjustments in your business.' 2. Invest in maintenance Winter is the ideal time to deep clean, repair general wear and tear, and upgrade rooms or appliances. Business owners should prioritise preventive maintenance on heating systems, plumbing, and backup power solutions as load shedding persists year-round. Regular servicing of your business equipment ensures they function efficiently and last longer, saving you money on replacements. 'Use downtime to tackle issues to ensure your property remains safe, efficient, and guest-ready when peak season returns,' says Govender. 3. Increase online visibility As of 2025, 66% of hotel rooms were booked online through Trivago, and AirBnB, indicating a significant shift toward digital booking platforms. This trend underscores the importance of hospitality businesses maintaining a strong online presence – especially throughout winter – for consumers planning special occasions, weekend getaways, or even a cosy night out. 'You should take advantage of digital marketing tools by sharing engaging, seasonal content featuring your warm, inviting space and winter menu highlights, or encouraging winter-themed guest reviews,' says Govender. 'Consider offering limited-time winter promotions or partnering with local influencers to extend your reach and procure sales directly from social media.' 4. Use credit wisely Traffic may slow down in winter, but the cost of running a business does not. Seasonal expenses like increased electricity bills for heating, higher water usage, retaining staff during low occupancy periods, and maintenance of weatherproof facilities can put pressure on cash flow.
