Is your small business in financial trouble? Here’s how to avoid bankruptcy

In the BizNews noontime Thursday webinar, veteran broadcaster Tim Modise was joined by Adam Craker, CEO of 700-employee IQBusiness Group, to discuss what can be done to help a small business in financial distress. This article is based on information shared during the webinar.

You can listen to the discussion, here on Spotify, or watch the BizTv recording on YouTube (scroll down).

Struggling small businesses should act and engage early to stay afloat and avoid closing up shop. This is according to Covid-19 Business Rescue Assistance (Cobra), a social enterprise initiative established to assist businesses in distress.

Launched in March, the organisation has helped 300 small businesses in different ways through its 70 partners.

“There is no shame in asking for help because the situation is about to get worse,” says Craker, CEO of both IQBusiness and Cobra. “We expect South Africa’s GDP to contract by between 14-17%.”

Help is at hand

The good news is that small, medium and macro enterprises employing one to 2,500 people can apply for support.

Most businesses request funding support, business rescue and advice on how to use bankruptcy protection in the South African context. “We find there is a need for education on how to sustain businesses in a bankruptcy situation,” says Craker.

Additional support includes restructuring, refinancing, accessing unemployment insurance for staff, pivoting core offerings, digital transitions, business rescue, and business turnaround.

Fees are waived in instances where, by paying for services, businesses would normally be pushed into insolvency. “Small businesses need be relevant and agile in order to pivot into the merging economy,” Craker says.

Read also: Most entrepreneurs fail. Entrepreneurial heroes know how to “pivot”

Mindset shift needed to survive the new normal

Cobra is about taking initiative rather than waiting on the government to provide solutions, says Graeme Butchart, business and innovation coach.

“South Africans have this awful default approach where they look to the government for help. In an unpredictable world, we have to turn inward for solutions to our problems.”

He says Cobra is an example of this mind shift. Likeminded individuals came together through a common purpose to offer valuable and technical support for struggling small businesses.

“To move forward, we need to shift our thinking, look inward for answers and collaborate in order to survive economically.”

Read also: Success story: How Joburg restaurateur Larry Hodes changed his business to survive Covid-19

Butchart says the Covid-19 pandemic has made small businesses realise that they need to be relevant with their offerings. “It’s an opportunity to reinvent oneself and your business,” he says. “It’s about letting go of the things that don’t work and adjusting to the new normal, while setting sights on the future.”

Distressed small businesses should share, collaborate and take initiatives that would help sustain their enterprises through, and post-Covid-19,” adds Butchart.

For the full interview, watch the BizNews Noontime Thursday webinar recording below.

(Visited 417 times, 3 visits today)