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THE COUNTRY’S electricity crisis is on everyone’s lips at the moment. Household consumers are fed up and feel inconvenienced and for business owners the situation has become more than a mild irritation. And it is understandable – the energy shortage is a concern for entrepreneurs who are already under pressure as a result of low economic growth.
But instead of jumping on the bandwagon to lament the situation further, I would like to extend a challenge to every small and medium enterprise in South Africa. The energy shortage is a major opportunity to grow revenue, take advantage of new income generation avenues, diversify an existing business or even start a new one – what are you as a business owner doing to benefit from this?
The crisis could lead to the next stimulus the economy needs where the private sector takes control in establishing sustainable alternative sources of energy on a broad scale. This could create a whole new growth sector around the supply and maintenance of alternative energy.
For example, many businesses are now considering installing generators and this presents opportunities for forward-thinking entrepreneurs to sell, install and maintain such equipment. Secondary activities such as the wholesale sale and transport of fuel are another possibility. Enterprises will need to call on experts to wire up generators – this means electricians will get more business.
It is critical for business to think creatively. For years South Africans were accustomed to a reliable, cheap energy supply. This is something that many countries don’t have – and it isn’t only African nations such as Ghana or Uganda that struggle with a constrained energy supply.
Economies such as California, for example, had a shortage of electricity in 2000 and 2001 which caused large-scale blackouts and one of the state’s largest energy companies collapsed. This severely affected many businesses dependent on a reliable electricity supply. Energy traders also took power plants offline for maintenance in days of peak demand.
Local business should ensure that their operations are resilient enough to cope with prolonged electricity cuts. This means that in addition to looking for solutions to deal with energy instability, entrepreneurs should look beyond South Africa’s borders to expand their business reach. There are high-growth economies in Africa which don’t have established manufacturing sectors and consumers in these countries need products that South Africans are making.
Consider differentiating product offerings to take new market share. This is one area where smaller businesses can really benefit – their size makes it possible for them to change direction more quickly to take advantage of emerging needs in the market.
It is crucial for local business to find its niche. South Africa is a resource-rich country and there is opportunity for business to beneficiate more and add value to commodities.
Entrepreneurs shouldn’t sit back and wait. Be bold with new business ideas – just think how many successful businesses were born as a result of spotting a need in the market.
* Karl Kumbier is the CEO of Mercantile Bank.
