Small businesses are suffering all over South Africa thanks to rolling power cuts. Without the money to buy massive generators, many entrepreneurs are opting to close down.
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Jeanne Brooks, an entrepreneur who owns Wicked Donuts, is among those who have taken a knock. She said load shedding affected the running of her business and scared off patrons, who felt unsafe in the area when it was dark.
Brooks has three stores in the greater Durban area – in The Pavilion shopping centre, Westville, the Florida Exchange building in Florida Road, Morningside, and in Astra Centre in Durban North.
She said she came up with the concept for the business when she had a conversation with a friend which sparked her curiosity into exploring doughnut making. Brooks began researching online and gradually entered the market via Durban Food Markets.
“Our donuts are good, old-fashioned, handmade, yeast-raised doughnuts. We use our own signature dough recipe and do not use premixes. We have a unique range of mini doughnuts called lovebites and make customised letter doughnuts for special occasions.
“Customers can spell out anything in letters and numbers that their hearts desire. We are proud to say that we are a home-grown Durban start-up and 100% female owned,’’ Brooks said.
It has not been smooth sailing for the small business that has 20 employees, half of what they had before the pandemic. The businesswoman said the shop in Florida Road was her worst-performing outlet.
“We put this down to poor visibility of the store, no street frontage, lack of parking and security on the road. Consumers are also becoming more and more reluctant to visit the street due to several recent shootings and the increase of petty crime,’’ she said.
Brooks often gets approached by other business owners on TikTok who lament the state of their enterprises. She has seen that load shedding, inflation and consumers tightening their belts and not feeling safe to move around freely are some of the growing concerns of small businesses.
“Many are now facing higher operational costs without any economic bounce-back after Covid-19. Small businesses are struggling to pass these increases over to their customers, genuinely concerned that they will lose customers when they increase their prices. The consumer is now very price sensitive and looking and asking for deals.’’
Brooks said the reason why small businesses were struggling was that, unlike bigger corporations, they run month to month with little funds saved for a rainy day.
She said most would have struggled to acquire or qualify for the loans they would need to navigate difficult trading since 2020.
“Those who had funds and were lucky enough to acquire loans in time would have burned through them by 2022 to 2023. Drastic increases in inflation and operating costs have nailed the coffin for many businesses. This coupled with consumer pressure, a weak economy and load shedding has made the situation dire,’’ Brooks said.
Many small businesses could not afford generators, she said, as the size they would need to operate three-phase equipment would cost R380 000.
“When the lights go out, our production stops. This means lost trading days and cancellation and refunding of orders, which could amount to R5 000 to R20 000 worth of losses per day. Those losses must be made up elsewhere and put further pressure on our cash flow.’’
To survive, Brooks said that she was consolidating her business and reducing risk where possible. This includes trying to add value for customers and marketing her business via social media.
“I think it’s all about weathering the storm right now. The entrepreneurial journey can be a very lonely one, and requires buckets of grit and resilience … I don’t think it’s the time for bold moves. It’s about battening down the hatches and taking swift decisive action to cut what’s not working.’’
IOL Business