When South Africa experiences electricity load shedding, everyone is affected, not least business. In fact, the cost of the latest wave of load shedding was predicted to cost our country as much as R5 billion a day, according to civil-society group, Organisation Undoing Tax Abuse (OUTA).
One of the business groups that suffers the most is small and medium enterprises (SMEs), for whom the implications can be challenging for production and cashflow.
Jeremy Lang, Regional General Manager at Business Partners says certain industries are more vulnerable: “Based on our experience the industries that are most affected by load shedding are manufacturing, retail, hospitality and in particular, businesses that are using cold storage and refrigeration.”
Lang explains that the reason for this is because over and above the potential loss of stock, the constant switching on and off can also damage the equipment which can become extremely costly to repair or replace. Lang added that because electricity is generally cut for around two to four hours, SMEs could lose up to four hours of an eight-hour working day, which could also impact employees who are paid by the hour.
Another way SMEs’ productivity can be impacted is in terms of their machinery, as some machines can take time to start up. This can also be costlier as more electricity may be required to start up again and, in many instances, if the machines are busy with a continuous process and are interrupted midway, wastage costs will also increase.
So, what should SMEs be doing to reduce the risk to their business?
The most important thing to do is assess how important electricity is to your business and whether you can work or schedule your operations around the load shedding schedule. Alternatively, the best option is to consider investing in backup electricity supply such as generators or UPS systems. Unplugging electronics before the power goes out is also another simple way to avoid the hidden costs of load shedding, as this will protect against power surges that can have a damaging impact on equipment.
It is also important that SME owners make sure that the business’ information is backed up daily on a secure cloud-based server. With products like Office365 and Google Suite readily available with an affordable costing structure, cloud-based server solutions do not need to be an expensive exercise.
In terms of retail, running a promotion of your product or service during the blackouts is a great way to attract shoppers to your store. During the March 2019 blackouts, local retailer, Bargain Books, ran a promotion, whereby shoppers would get a 10% discount on book purchases if they shopped for it during load shedding – something they advertised extensively via their social media channels.
Another aspect for retailers to consider is providing handwritten receipts during load shedding, instead of running at a loss due to POS systems being down. iStore did this successfully during the March 2019 blackouts. They used a receipt book that made both a customer and store copy of the receipt, allowing them to input the data into their systems when their POS was back online.
Need assistance creating a marketing campaign to combat the likes of load shedding and help you continue to generate returns? Contact The Blue Room and let our talented team of marketers assess your situation and create a bespoke integrated marketing campaign to continue generating leads and profits for your business. Contact us by emailing email@example.com or calling 021 553 0315.
Written by Adéle Schultz, Account Executive: The Blue Room