Covid-19 may increasingly feel like yesterday’s crisis. The masks have disappeared, lockdown regulations are history, and businesses have long since re-opened their doors.
Yet one of the greatest mistakes we could make is to consign the business lessons of that period to history.
The pandemic was an event. Volatility is a condition. This distinction matters for South Africa’s small businesses.
The real lesson from my research conducted among entrepreneurs in KuGompo City is, therefore, no longer simply about Covid-19.
It concerns what happens to small businesses when the environment in which they operate changes suddenly.
The original study examined 100 small-business respondents in East London and investigated how an external shock affected their operations.
Covid-19 provided the setting, but the underlying business story is considerably more enduring – falling demand, declining revenue, increasing operating costs, disrupted operations and the difficult choices entrepreneurs must make when their environment becomes hostile.
These conditions sound remarkably contemporary. South African businesses today operate in an environment where disruption is increasingly normal.
For the entrepreneur, the source of the disruption may change, but its consequences often travel through remarkably similar pathways.
This is precisely where the East London research remains useful. Participants demonstrated the connection between a deteriorating economic environment and what eventually happens inside a business.
In the study, 83% agreed that poor economic performance affected their business operations.
The significance of this finding extends well beyond a pandemic. When households are under pressure, consumers spend less but other operating expenses do not conveniently disappear.
The entrepreneur becomes the shock absorber. That is perhaps the most important insight we should carry forward – small-business vulnerability is often less about the shock itself than about the capacity of the business to absorb it.
Among respondents, 92% agreed that the crisis had caused poor sales, while similarly overwhelming numbers reported lower customer turnout.
Strip away the Covid terminology and we are left with a fundamental lesson about business and environmental volatility.
We often speak about entrepreneurial resilience as though it were primarily a psychological characteristic – perseverance, courage and the willingness to keep going. These qualities undoubtedly matter. But an entrepreneur cannot motivationally speak a business out of a cash-flow crisis.
Resilience must also be operational. A resilient business understands its cost structure and it understands its customers, maintains alternative suppliers, develops different routes to market and avoids becoming excessively dependent on a single revenue stream.
This becomes even more important because volatility can attack businesses from both directions simultaneously. Revenue can fall while costs rise.
In the research, 87% of respondents agreed that increased business costs affected operations.
The cause tomorrow may be electricity, fuel, water, extreme weather, logistics or another unforeseen disruption. The business consequence remains familiar.
Traditional thinking sometimes treats the "business environment" as something external, a chapter in a business textbook consisting of political, economic, social, technological and environmental factors.
For today's entrepreneur, the external environment walks through the front door every morning. A failing municipal service becomes a business cost and a damaged road becomes a logistics cost.
Environmental volatility therefore needs to become part of everyday business strategy rather than something considered only during a crisis. This requires a shift from crisis management to resilience management.
The question should no longer be: What will we do when the next crisis arrives? The better question is: How do we build a business capable of functioning when circumstances change?
One of the study's recommendations was that small businesses find inexpensive ways of reaching customers.
It also recommended stronger monitoring of expenditure and more integrated approaches to managing production, marketing, finance and human resources.
But digitalisation should not be confused with simply opening a social-media account. The real competitive capability is adaptability.
Technology should enable businesses to understand customers faster, communicate more efficiently, monitor finances, diversify markets, improve productivity and make decisions using information rather than intuition alone.
The businesses most capable of surviving volatility may be those capable of learning and changing fastest.
There is also an important public-policy lesson. The original study called for stronger engagement between businesses, government and organised business structures so that the realities confronting entrepreneurs could inform policy decisions.
That principle remains crucial even though the specific Covid regulations that prompted it have disappeared. Small-business policy cannot consist predominantly of rescue packages announced after businesses are already distressed.
We need a stronger resilience infrastructure for SMEs through which entrepreneurs can meaningfully participate in decisions affecting their operating environments.
Local government is especially important. For a small enterprise, the quality of the immediate business environment can determine whether entrepreneurship flourishes or merely survives.
Perhaps Covid-19's most enduring business lesson is that we rarely know the identity of the next disruption. That should not prevent us from preparing for it.
Our research showed how quickly deteriorating economic conditions could move through the chain from reduced consumer spending to lower customer turnout, poorer sales, declining revenue and ultimately impaired business operations.
That chain should now become a warning system rather than merely a historical finding.
South Africa needs entrepreneurs who do more than survive crises.
We need businesses designed for volatility – financially disciplined, technologically enabled, environmentally aware, connected to their customers, capable of adapting their operations and supported by institutions that understand the realities of doing business.
Covid-19 should therefore recede from the centre of this conversation. Its lesson should not.
The question for South African business is no longer whether another disruption will come. It is whether, when it does, our small businesses will have built enough resilience to remain standing.
Bongi Mafani holds a BSc in Microbiology & Biochemistry from the University of Fort Hare, Postgraduate Diploma in Business Management and Masters in Business Management from MANCOSA. The article is based on her MBA dissertation.