Low and high hanging fruits in the changing entrepreneurship landscape

“Never let a good crisis go to waste”. These were the words of British Statesman Winston Churchill shortly after the end of World War II.

The relevance of these words rings true today as we grapple with the disruption of the Covid-19 pandemic.

The pandemic increased the vulnerability of many businesses, especially those trading in the second economy, particularly on youth entrepreneurs.

Jobs have been lost, cash flow has run dry, and some businesses even closed. Many livelihoods have been affected, and undoubtedly, the way business is conducted has shifted.

The merit of a crisis is that it presents opportunities to solve structural problems and innovate.

While this innovation was evident in Namibia, evidenced by either the emergence and positioning of several businesses to provide critical services in untapped markets, more still remains to be done to ensure this crisis does not go to waste.

Let us look at examples that have worked, businesses such as the Tambula Online Shop, an e-commerce platform that sells and delivers various products from different suppliers, including those from the informal market have bridged the gap between formality and informal.

A method like this builds on the hope that it's possible to maximise on the upside of Covid-19.

As a result of the public health measures to contain the virus’ spread, the decline in spending and economic activity have led to a reduction in the cash flow of many second economy and youth-led businesses. This has contributed to uncertainty amongst entrepreneurs, which leads to mental health pressures, such as anxiety and stress.

As the immediate and long-term impact of COVID on the Namibian socio-economic fabric is becoming more apparent, much-needed attention is being placed on mitigation. There is urgency on the obvious issues occupying mind space, however, as the One Economy Foundation, we are concerned about the soft issues which may be overlooked.

Our particular concern is the impact COVID has had on young entrepreneurs' mental health and confidence and how it impacts the natural rhythm of entrepreneurship, risk-taking, innovation, and motivation to pursue future plans.

In response to this, the One Economy Foundation convened a forum which assembled entrepreneurs and experts to dialogue on topical entrepreneurial issues and to provide fresh and nuanced perspectives. This forum served as a foundational tool in rebuilding the capacity, confidence and capital of young entrepreneurs in a market shaken by unprecedented crises.

The forum provided great insights into the needs of youth entrepreneurs and the specific challenges they face in the context of COVID-19. It further provided a platform for entrepreneurs to network, and access information on the opportunities available for youth in trade, business funding, and partnership development.

In addition to this, the One Economy Foundation has kept its finger on the pulse of entrepreneurs. Through the ONE Nation Fund (ONF) Microfinance and Entrepreneurial Training Programme, we provided collateral and interest-free loans to 46 grassroots entrepreneurs to the tune of 2.4 million. During the lockdown period, we provided the ONF beneficiaries with a three-month payment holiday and Personal Protective Equipment (PPE).

ONF has taught us consequential lessons about the needs, challenges and the ripple effect impact of investing in grassroots entrepreneurs. Therefore, it is our firm conviction that we have made a far-reaching and long-lasting impact on grassroots entrepreneurs and their communities.

Six key learning’s emerged from our engagements with the ONF entrepreneurs and from the forum on how second economy and youth-led businesses can navigate the changing landscape of entrepreneurship:

1. There is great value in entrepreneurs collaborating and forming partnerships with like-minded organisations to leverage resources, increase production capacity, and build resilience. Additionally, entrepreneurs can harness their shared knowledge, experiences, and networks to achieve greater results. For example, through business-to-business (B2B) engagements;

2. Innovation and change management are critical success factors for businesses to survive and thrive, especially during a crisis. Equally important is developing an innovative mindset that is open to change and disruption. Resilient and agile businesses position themselves better to take advantage of shifting landscapes and circumstances. Adapting to said change ensures businesses remain relevant and maintain a competitive edge;

3. As we navigate through these incredibly stressful and uncertain times, entrepreneurs need to take care of their mental health. A key piece of taking care of your mental health is developing healthy coping mechanisms. This can include seemingly trivial and cliché-sounding actions such as exercise, developing routines, maintaining connections with other entrepreneurs and, if need be seeking, a mentor, life coach or a psychologist;

4. Incubation is critical to building successful and financially viable businesses. Incubation allows small businesses to leverage peer-to-peer learning opportunities, a comprehensive business support system, and the transfer of business skills;

5. Entrepreneurs need to identify expenses that can be reduced or deferred. This is essential to managing cash flow and financial reserves. This is in addition to assessing the businesses’ balance sheet to determine the pandemic’s impact on the company's assets, liabilities, and equity. This will enable informed decision-making on how the business can innovate, pivot, and expand its value proposition to remain afloat beyond this pandemic. Furthermore, it is advisable for entrepreneurs to engage creditors upfront in order to renegotiate their premiums.

6. Business is about value addition and solving unmet needs. During the pandemic, the general uncertainty has resulted in a decrease in disposable income. Consumers exercised caution in spending, and as such, businesses that provide ‘needs’ as opposed to ‘wants’ have remained profitable. In general, entrepreneurs should aim to create products and services that are worth their customers’ buck. This is in addition to consistently thinking of new opportunities in terms of goods and services which are required by the market.

Businesses are impacted by COVID-19 in visible and hidden ways, and without a shared understanding about these impacts, attempts at recovery may flounder. Now more than ever, it is crucial for entrepreneurs to re-engineer their business models as the consequences of the pandemic linger on.

The landscape of business is ever-evolving; hence resilience and adaptability are building blocks of modern-day businesses. Regardless of the crisis, whether a pandemic or economic downfall, youth entrepreneurs, with these added learnings, skills and networks, will sail the tide.