Three top items South African SMEs should take advantage of in 2018
2017 was tough economically for SMEs in South Africa. It saw the country face a technical recession and some businesses – both large and small, faced business rescue and bankruptcy. However, toward the end of the year, the Rand strengthened and economists attribute this to the shift of power in the ruling political party.1 The year 2018 brings some important considerations SMEs need to be aware of to scale up their businesses.
How To Scale Your Business As An SME
South African small and medium enterprises will benefit from considering the following ways to scale their businesses:
- Go digital or go home
- Cross-border trade opportunities
- Secure your financing with trade credit insurance
Let’s look at each item in more detail.
1. Go digital or go home
Jesse Weinberg, head of the SME Customer Segment at FNB Business has expressed that the digital economy is in full swing, which is an important insight that business owners should consider, in order to grow their businesses.2
If you’re an SME and continue to operate without integrating digital technology, you may suddenly find your SME being outperformed by your competitors. Globally, there is a significant migration to digital channels.
Take advantage of the sheer efficiency and convenience it offers, and you can quickly scale your business. Something as simple as creating a good social media presence could have you growing your brand awareness and reaching more customers, while digitising your accounting process could translate to better cash flow and financial management for your business.
The stronger rand to the dollar means that technology purchased in the States, for example will be more affordable. Importers can also take advantage of this fact and pay less than they were in November 2017 for the same product (all considerations in equilibrium).
2. Cross-border trade opportunities
In a recent report compiled by KPMG, titled ‘The Truth About Online Consumers’, KPMG finds that the African/Middle Eastern markets import 50% of all online purchases from other regions, making them the number one online importer worldwide.
More South African consumers are therefore looking beyond their borders to get the products and services they need. This report portrays the importance of international e-commerce. 3
With increased access to mobile phones in South Africa and exposure to products online, cross-border payment enablers have a huge opportunity to expand their service offering and empower consumers and business owners in the region.
3. Secure your financing with trade credit insurance
Banks and other lending institutions will typically offer more favourable lending terms to businesses that have trade credit insurance, and it can assist you to expand your business operations. When you take out trade credit insurance from Credit Guarantee, you protect your accounts receivable, as you transfer the risk against non-payment of your debtors, from your business to us.
So, protect your bottom line, take advantage of all the benefits we offer our clients and cover your business with trade credit insurance today.
Credit Guarantee is a licensed financial services provider.