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 Level 5 and 4 lockdown no time to sit idle, say business owners

 

 No business is unaffected by the unprecedented lockdown and the resultant great economic freeze. But characteristically, business owners are not sitting still. All are busy drawing up applications for emergency relief, while some are making plans to diversify, negotiating with suppliers, catching up on paperwork, thinking about marketing campaigns and new ways of doing things, and even making plans to start new businesses.

Here is a sample of what they are up to:

Prashun Sharma, owner of Aluminium Doctor in Durban

Prashun says the year got off to a difficult start for the building industry, so the lockdown is just one of many shocks, albeit the worst so far.

The one advantage of Aluminium Doctor, manufacturer of aluminium frames, is that it is set up to handle the ups and downs of the building industry, with some months completely dead and others with a flood of business. But Prashun says even with the lockdown lifts, there is bound to be a big gap before orders start coming in.

He will have to apply to the emergency support programmes that are available, but he would prefer to participate in a government economic stimulus programme through construction projects, rather than being burdened with another loan, which will take years to claw back.

His business is applying to the UIF to help his staff tide over the lockdown, and also for the three-month payment holidays from his bank. He worries that in the fourth months the bank would require an additional payment, which will be hard to meet.

Meanwhile, his office staff are working from home, catching up on paperwork, and filling in as many tenders as they can so that there will be work to follow up on once their business is allowed to operate again with the different level lockdown lifts. 

OJ Matonsi, owner of Low-cost Windows in Brakpan

OJ's business, which manufactures the metal frames for windows and doors mainly for government-subsidised housing developments, went into the lockdown in a difficult position because the large RDP-type housing developments were mostly on hold because of end-of-financial-year processes. Many projects have also been put on hold since the start of the Ramaphosa administration in order to investigate corruption.

The lockdown and its disruption therefore comes at a bad time for Low-Cost Windows. OJ hopes that several big housing projects, for which his business is listed as a supplier, will come on stream soon after the lockdown lifts.

Meanwhile, OJ has tasked his accountant to start applying for any relief funds that become available, including the UIF Temporary Employer-Employee Relief Scheme to help his employees.

OJ says he plans to diversify his client base by providing door and window frames to hardware shops in Limpopo and North-West. It won't be easy, because as a small manufacturer he buys his the steel for his products at higher prices than larger companies.

Hafeez Rahman, co-owner of ALT Blow Moulders, south of Johannesburg

As manufacturers of 20 litre plastic containers, among other things, Hafeez is exempt from the lockdown because they are key to the provision of sanitizer, water and food containers to the hospitals, as well as paraffin.

But the factory is running only at 60% capacity, because orders for oil and fuel containers to the motor industry have completely stopped. 

Hafeez says ironically, their orders for food containers have actually increased in the run-up to the lockdown, but they have to prepare for an expected drop-off in the aftermath as the economic downturn starts to bite.

Dave Coleman, owner of Dave's Gyms in Galvandale, Port Elizabeth

Dave, who has seen a 70% drop-off in gym membership in the month before the lockdown, is planning and hoping to emerge from the different lockdown levels with guns blazing.

He has already identified the perfect spot to open a new outlet of a well-known chicken franchise if he can raise the finance. Dave has owned several video shops and restaurants in his long business career, and it won't be the first time that people shake their head at his timing, which he had managed to get right more often than not.

During the lockdown, Dave has been volunteering as a counsellor for young drug offenders at the Nationwide Drug and Alcohol Abuse Centre, which is classified as an essential service as it carries out court orders for drug counselling.

Dave is applying for payment holidays from his financiers, just as the tenants on his rental properties have asked him for leniency with their rent. He has also put his staff on reduced pay while the lockdown lasts in order to protect his gyms from closure.

He says the gym business is difficult in the poor community that he services, as people are hesitant to take out debit orders for gym membership. Payments are therefore on a daily or month-to-month basis, which caused the drop-off of membership to have an immediate effect on his revenue.

Dave says that when their business is allowed to reopen, he will have to institute a more intense hygiene and cleaning protocol in his two gyms in order to allay people's fear of the virus. 

Lorraine Chitate, owner of Zanami Lodge in Polokwane

Lorraine is one of the few guest houses with any activity during the lockdown, because one or two of her international guests could not get a flight home, and are forced to sit out the lockdown period in the lodge.

This has given Lorraine the opportunity to provide a trickle of work to her ten staff members. She has divided up her staff into two teams of five, and alternate the reduced hours between them on a weekly basis. The team on duty for the week stay in rooms at the guest house so that they don't have to use public transport. 

Meanwhile, Lorraine has applied for the UIF top-up to supplement her staff's reduced wages, and she has thrown herself into applying for support funding and debt payment holidays to help bridge the lockdown.

Lorraine says the pandemic and the lockdown has made her aware of the power of social media and the fact that you can reach out to the world from your home. She is determined to launch a big social media push to market her business once the lockdown lifts.

The recovery will be slow, because people will be afraid to travel for quite a while. Guest house owners will have to intensify their cleaning protocols, perhaps permanently, to help allay those fears, she says.

Pieter Viljoen, co-owner of Dart Aeronautical at the Rand Airport in Johannesburg

The Dart group of three companies that supply and service flight instrumentation to the general aviation industry is not seen as essential, and has had to lock down except for two staff members who are standing by for medivac equipment.

Pieter's greatest concern is the rand-dollar exchange rate which makes the instrumentation and parts that they import very expensive in rand terms. Two clients have decided to rather wait and have asked for their deposits back.

In response, Pieter have been busy negotiating with his overseas suppliers, and so far at least one has proposed a payment plan that would make it easier for local clients to buy equipment for their planes. 

Pieter says he will definitely apply for bridging support from business rescue funds that are currently being set up, as the key technical experts on his staff of 20 have high salaries which are difficult to carry when no revenue comes in.

He has work lined up for two weeks once their business is allowed to trade, but he expects a drought of orders while the exchange rate is below R17 to the dollar. 

The low oil price will take about 45 to 60 days to make a difference to the aviation industry, and even then, it might not be translated into extra money for equipment upgrades, says Pieter. 

It is going to be a difficult year, says Pieter. Things might get back to normal next year when the tourism and mining industry, the two main industries that feed Pieter's commercial-pilot clients, recover from the crisis.

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