For many businesses the festive season offers huge opportunity, especially those involved in tourism, hospitality and retail. In the Western Cape and other popular tourism destinations, the seasonal influx of tourists – many with dollars and Euros burning a hole in their pockets – sees some well-placed businesses doing more turnover over a three-month period at year-end than they do for the rest of the year combined.
After an unprecedented global pandemic, generally healthy business sectors are on life support.
The various COVID-19 relief funds and concessions have helped stem the tide for some, but for thousands of others it is a case of too little, too late. It is incredibly tough out there for a business that relies on foot traffic and volumes of people to survive.
Fortunately, there is a glimmer of hope. Many of the entrepreneurs we work with at Fetola have reported a ‘V-shaped’ recovery in the past few months, especially since lockdown levels were relaxed.
I have used an analogy before of how quickly and abundantly the Cape fynbos regenerates itself after a mountain fire, and we are seeing a similar scenario playing out in certain sectors of our economy.
Retail numbers have increased sharply in September and October, restaurants are starting to fill up again and even businesses that are completely reliant on tourists are seeing a significant upsurge. The demographics may be different – most tourists this season will be locals – but the volumes are encouraging.
If yours is a business that relies on the festive season to bolster cash flow and shore up the coffers, I would advise that you approach the upcoming period in much the same way as usual. This means:
Negotiate with suppliers for relaxed payment terms and consignment stock if you are in retail. You need to create access to resources that you can leverage as needed – staff on standby, stock you can access quickly, and if possible a ‘war chest’ of cash on hand that will give you the flexibility to be nimble and leverage increased demand when it arises.
Consider extended trading hours, more aggressive marketing, special offers and promotions as well as upselling and cross-selling. Start now before the season is in full swing by looking at existing marketing efforts and selecting the right channels to reach your seasonal target market.
SMEs need to help each other through referrals, collaboration and sharing of resources. Tap into your existing networks, and reach out to businesses offering complementary products and services to see how you can work together to maximise opportunities. Examples would be restaurants offering specials to guests of certain hotels and guesthouses, tour guides partnering with retail and food establishments and several businesses creating package deals by combining offerings to create an attractive solution for customers.
Without the aid of a crystal ball, it is impossible to predict what the next season is going to look like. Early signs however are promising – one positive outcome of the pandemic has been a recognition of how important SMEs and entrepreneurs are to our economy, coupled with a genuine desire to support them.
An attitude of cautious optimism and preparedness for a good season feels like the way to go, renewed flare-ups and lockdowns notwithstanding. More than ever, you need to make every sale count.
Anton Ressel is Strategic Head: SME Support at Fetola.
For more tips from Anton, watch this video:
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