'We can't pay suppliers, can't pay rent': Small businesses share their fears of lockdown | Fin24
 
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'We can't pay suppliers, can't pay rent': Small businesses share their fears of lockdown

Mar 26 2020 05:01
Phumi Ramalepe

Tebogo Mabye, owner of Hillbrewed Coffee Co. in Doornfontein, Johannesburg, says the three-week lockdown kicking in at midnight could spell the death knell for his earnings for at least three months, if not altogether.  

"I am not going to have a salary for probably the next three months because its going to be slow even if I open after this lockdown. I can’t pay salaries," Mabye told Fin24 on Wednesday.

"I had to look for some cash to pay suppliers, alongside rent. We can’t pay suppliers, we can’t pay rent and we might possibly need to close down the shop until we are able to get money again to start operating again.

“There is no income coming in so we can’t do anything. The four of us are out of jobs," he said, referring to his three employees.

Small businesses are set to bear the brunt of the 21-day lockdown, announced by President Cyril Ramaphosa on Monday. The strict measures have been widely praised as government took swift action to stem the outbreak, but the economic consequences for affected businesses will likely be dire.

For three weeks, only essential services will be allowed to remain open.

Though support measures have been announced for affected businesses alongside the lockdown, outlets that have been forced to close have expressed deep concerns about the impact on their pocket.

While emergency vehicle repairs will be allowed under lockdown, the sale of parts will not be allowed, which has sparked criticism from industry members. Mawethu Soga, co-founder and chief experience officer at Fixxr – a digital business that connects car owners with mechanics through a mobile app – says the business is expected to take a hit, even though as an online business, it could theoretically still operate.  

'We have a considerable worry'

"We will decrease in terms of sales and revenues for the year. As a small business, we are still within our first 16 months, so we are impacted in terms of our loss going forward, but we are in discussions with investors for funding," he said.  

Soga says due to social distancing – a behavioural model where people minimise social interactions, and keep physical distance from each other – customers will shift more towards digital in the long run, and Fixxr expects to see an increased demand for its services.  

Rather, those expected to suffer most at Fixxr are those mechanics deployed to do the repair work. "Our mechanic partners who we utilise to deliver services will not be earning an income for the foreseeable future, and that would have a large impact on their livelihoods.

"We do have a considerable worry and have asked them to engage with their landlords to have some reprieve on their rent," said Soga.  

The digital company is also working towards ensuring that mechanics gain access to available grants during the lockdown period as the digital company deals with the possibility of closing down and resuming the business after the lockdown. 

For those impacted, some relief is available in the form of government's plan of action: an emergency National Disaster Benefit Fund, expected to dispense R30 billion from the Unemployment Insurance Fund for qualifying employees whose salaries will be impacted during lockdown. These workers will receive a R3 500 minimum wage for three months due to the pandemic.

In the meantime, they have no choice but to lock down and wait it out.

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