Business

‘We can’t pay suppliers, can’t pay rent’: Small businesses share their fears of lockdown

Tebogo Mabye, owner of Hillbrewed Coffee Co. in Doornfontein,
Johannesburg, says the three-week lockdown kicking in at midnight could spell
the death knell for his earnings for at least three months, if not altogether.  

“I am not going to have a salary for probably the next
three months because its going to be slow even if I open after this lockdown. I
can’t pay salaries,” Mabye told Fin24 on Wednesday.

“I had to look for some cash to pay suppliers,
alongside rent. We can’t pay suppliers, we can’t pay rent and we might possibly
need to close down the shop until we are able to get money again to start
operating again.

“There is no income coming in so we can’t do anything. The
four of us are out of jobs,” he said, referring to his three employees.

Small businesses are set to bear the brunt of the 21-day
lockdown, announced by President Cyril Ramaphosa on Monday. The strict measures
have been widely praised as government took swift action to stem the outbreak,
but the economic consequences for affected businesses will likely be dire.

For three weeks, only essential services will be allowed to
remain open.

Though support measures have been announced for affected
businesses alongside the lockdown, outlets that have been forced to close have
expressed deep concerns about the impact on their pocket.

While emergency vehicle repairs will be allowed under
lockdown, the sale of parts will not be allowed, which has sparked criticism
from industry members. Mawethu Soga, co-founder and chief experience officer at
Fixxr – a digital business that connects car owners with mechanics through a mobile
app – says the business is expected to take a hit, even though as an online
business, it could theoretically still operate.  

‘We have a considerable worry’

“We will decrease in terms of sales and revenues for
the year. As a small business, we are still within our first 16 months, so we
are impacted in terms of our loss going forward, but we are in discussions with
investors for funding,” he said.  

Soga says due to social distancing – a behavioural model
where people minimise social interactions, and keep physical distance from each
other – customers will shift more towards digital in the long run, and Fixxr
expects to see an increased demand for its services.  

Rather, those expected to suffer most at Fixxr are those
mechanics deployed to do the repair work. “Our mechanic partners who we
utilise to deliver services will not be earning an income for the foreseeable
future, and that would have a large impact on their livelihoods.

“We do have a considerable worry and have asked them to
engage with their landlords to have some reprieve on their rent,” said
Soga.  

The digital company is also working towards ensuring that
mechanics gain access to available grants during the lockdown period as the
digital company deals with the possibility of closing down and resuming the
business after the lockdown. 

For those impacted, some relief is available in the form of
government’s plan of action: an emergency National
Disaster Benefit Fund
, expected to dispense R30 billion from the
Unemployment Insurance Fund for qualifying employees whose salaries will be
impacted during lockdown. These workers will receive a R3 500 minimum wage
for three months due to the pandemic.

In the meantime, they have no choice but to lock down and
wait it out.

Comments (0)

Leave Comment

Your email address will not be published.