For SMMEs (Small, Medium and Micro Enterprises) that have survived the COVID-19 crisis through resilience and creativity, steering their businesses back to prosperity will be “all about the money”, according to a panel of experts speaking at the 2021 Absa Smart Supplier Conference, organised by Smart Procurement.

A panel discussion entitled “Knowing Your Financial Superpowers - Is it all about the money?” was a highlight of the event. It was moderated by Atul Padalkar, Managing Director of Bizfarm Incubator. It featured panelists Precious Mvulane, a chartered accountant, award winning businesswoman and content developer; award winning business consultant and entrepreneur Dr Thabo Pitse, who consults to the University of the Free State; and renowned business enabler, growth accelerator and brand analytics specialist Diane Boorman.

The importance of cash flow and planning were stressed by Precious Mvulane, who said that managing cash flow is a problem for many entrepreneurs and can make or break a small business. She advised delegates that planning is vital in order to understand cash flow, and to ensure that the business has cash reserves. “There is a mindset among entrepreneurs that they must buy goods before they sell them, but this is not correct. If you have good, trusting relationships with customers, who trust you to deliver as promised, you should be selling goods before buying,” she told the hundreds of delegates who had gathered online to learn, network and share knowledge.

Mvulane also emphasised the importance of building relationships with suppliers. She explained that getting credit was often dependent on having a strong, long-standing relationship with a supplier, rather than “jumping around” and sourcing goods from different suppliers all the time.

Dr Thabo Pitse shared his expertise on profitability. He said that the owner of every small business must know the business’s numbers. “Without knowing this, you cannot make critical business decisions,” he stressed. He advised entrepreneurs to start with a clear understanding of their business goals. “What is your vision and goal? Are you aiming to turn your business into a franchise; or will it always be a family business and your legacy?” He said that every business must be founded on three pillars. “The first of these is having customers to serve. Secondly the business must have revenue. Thirdly, it needs to be profitable.” He urged delegates to know and understand their customers, including how best to communicate with and sell to them, and how to increase the frequency and amount of their transactions. He stressed that marketing and sales strategies are vital for a small business to thrive.

Access to finance and credit is one of the biggest factors hampering youth entrepreneurship in South Africa, Luvuyo Manyi, Vice President, Youth Economic Alliance, stated in the panel discussion at the Smart Supplier Conference. He noted, however, that the situation is improving as financial institutions today are more open to working with youth business owners, having lowered their risk profiling measures and adapted well to the growing need to help youth entrepreneurs. He advised young entrepreneurs to have “credit awareness” in everything that they do. “Financial institutions and investors will consider how you handle your finances and cash flow, even in your personal capacity,” he told delegates. “Knowing where your business is headed and being able to show your projections is vital to convince financiers and investors.” He noted that the shift to venture capital is good news for youth entrepreneurs but said that their skill sets and capabilities must be exceptional, as they will be judged on these rather than experience by investors looking for returns.

Diane Boorman, CEO of Brand Analytics, echoed this in her input on fund raising options for small businesses. Boorman, who is a business enabler and growth accelerator, stressed that entrepreneurs must know what they can offer an investor before looking for funding. “One of the biggest downfalls for a small business is when the owner does not have a clear idea of whether it is a business or a hobby. Before looking for funding, an entrepreneur must know where they are taking the business. Is it compliant or not complaint? Are you eating out of the till or paying yourself a salary? If it is the former, you will never know the business’s true numbers and profitability, so an investor would be unable to assess its value,” she stressed.

The Absa Smart Supplier Conference, now in its 6th year, is organised annually by Smart Procurement, and is geared towards helping small business owners and entrepreneurs to grow their businesses and contribute to South Africa’s economic growth and success. The focus this year was on supporting South African entrepreneurs who have survived the COVID-19 crisis and who are ready to thrive and contribute to the country’s economic recovery.