Small Businesses Bear the Brunt as Rolling Blackouts Worsen
Small businesses are facing significant financial challenges due to rolling blackouts, with estimated costs surpassing R1.2 trillion.
These blackouts not only burden small enterprises with the expense of alternative power sources but also lead to price hikes from suppliers who pass on the additional costs of running generators. However, the detrimental impact extends beyond mere monetary figures, as the energy crisis severely affects the morale and productivity of employees across the country, according to Jeremy Lang, Chief Investment Officer at Business Partners Limited, a financier for small to medium-sized enterprises (SMEs).
Lang emphasizes that revenue loss is just the visible part of the problem for small businesses that heavily rely on a consistent and reliable energy supply. To fully grasp the extent of load-shedding’s impact on the SME sector, one must consider its implications for employees’ income and daily work routines.
A coffee shop owner from Randburg, who prefers to remain anonymous, shares her experience of relying on generators to keep her business operational and maintain a complete menu. She explains that cutting menu items due to rolling blackouts would result in dissatisfied customers, forcing her to purchase more fuel to keep the generators running. While she faces price hikes from suppliers in the supply chain trying to cover their increased costs for alternative power, she cannot continuously raise menu prices every month.
Furthermore, despite power being out for nearly half the day, her power bill remains unchanged because appliances like fridges must work doubly hard once the power is restored to regain the desired temperature. Frequent power fluctuations also contribute to the breakdown of appliances and equipment.
According to the coffee shop owner, the only viable solution for small businesses in the face of these challenges is to reduce staff numbers.
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