By Rob Wilkie, CFO Softline and Sage AAMEA

Rob Wilkie

The 3 weeks long strike in the transport sector has come to an end, but at an enormous cost to business.  The Road Freight Employers Association has estimated a cost of R1.2 billion per week.

With supplier deliveries late and transportation of their goods delayed, small businesses are fighting for their survival. A disruption to their trade means lower turnover, less cash generation and unpaid expenses.  Unfortunately job losses are a casualty.

My concern is that strikes will spread to other sectors. They are becoming part of a broader social movement taking the form of ill-disciplined and often violent protests.  The common underlying thread in all these demonstrations is poor service delivery, poor living conditions and growing inequality.

Without fast and effective government intervention to strike action, small businesses will have to be more agile and flexible than ever if they are to sustain themselves in this existing climate. Moreover, small businesses need to plan for a trade disruption so as not to be caught flat footed. A plan should consider the following:

  • What can you depend on from your banker during this time – borrowing capacity?
  • What monthly overhead expenses are unavoidable to stay in business?
  • What is your estimated monthly cash income?
  • Can you cancel or place orders on hold if supplies cannot be received?
  • Could you negotiate a payment plan with your major creditors?
  • What is the minimum inventory level necessary?
  • Do you have a communication plan to keep suppliers and customers fully informed?
  • Are you able to use sub-contractors if necessary?
  • Do you have access to replacement workers?

We live in very volatile times making planning difficult yet critical in survival of the fittest.