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Opinion

How entrepreneurs plotted survival in response to Covid-19 pandemic

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Brett Chulu

THE author conducted a survey among entrepreneurs in Zimbabwe.

The aim of the survey was to find out the challenges and opportunities brought about by the Covid-19 pandemic and how entrepreneurs adjusted in response. The key objective was to establish patterns across the challenges,  opportunities and responses.

*Participants*

Entrepreneurs who responded to the questions came from various industry sectors, namely: agro-support, primary agricultural production, agro-processing, events management, transport, clothes manufacturing,  upholstery, education, irrigation engineering, professional accounting services and clothes retailing.

*Method of analysis*

The constant comparison method of Classic Grounded Theory (CGT) was used. This allowed the researcher to uncover categories without having to force-fit pre-conceived categories.

*Results*

The major concern among the entrepreneurs that was surfaced is how to ensure cashflows for personal survival.

They resolved this major concern by “breaking comfort zones”, with a few exceptions.

*Dried streams*

Some entrepreneurs faced the prospect of a sudden drying up of their cashflow streams. These are entrepreneurs whose movement became restricted due to strict lockdowns or who themselves faced travel restrictions, preventing them from accessing their clients. Some of the entrepreneurs who depended on clients gathering or massing up in a single space found that line of business completely shut down.  Some entrepreneurs suddenly found clients who could no longer afford their services due to the fact that their clients’ own income streams had been stopped or severely cut , mainly as a result of either a loss of employment or business permanently or temporarily shut down due to new Covid-19-related regulations.

Some entrepreneurs shut down their business lines due to the high cost of importing raw materials and products as transport operators hiked transport charges, taking advantage of the low supply of cross-border courier services.

*Running streams*

Some entrepreneurs did not face the challenge of drying cashflow streams. These are entrepreneurs whose business is heavily dependent on other businesses being either required by law to provide information or other shareholders requiring the information. The entrepreneurs who did not face dried cashflows were, in turn, serving businesses that did not face huge cashflow reductions as they provided essential services.

*Digging new channels*

The threat to cashflow did not just impact business survival — it personally affected the entrepreneurs due to dependence on business for income. Such entrepreneurs had to break out of their familiar territories and venture into relatively completely new areas of enterprise  Some of the new areas of enterprise were new but related to their core business now under threat. For some, the new areas of enterprise were completely not related to their core business now under threat.

*Multi-streaming*

In digging new channels of cashflow, some entrepreneurs dug more than one new channel, possibly not knowing which new channel would succeed hence trying out many new channels. Some  added at least a new cashflow channel to augment the severely dried up old business channel. In some of these cases,  the old channels experienced cashflow reductions by between 50% and 65%.

In some cases,  entrepreneurs were already multi-streamed before the pandemic but in unrelated areas.

*New channel digging*

New channel digging is about starting a new enterprise. Some  new channel digging took the form of those who depended on salaried employment suddenly out of work venturing into self-employment. Some new channel digging was in response to the old business competely shut down due to Covid-19 related regulations and/or Covid-19-induced high cost of operating the enterprise.

The most common areas where new  channel digging was done are agro-food production,  agro-food retailing and Covid-19 prevention material.

*Swelling channels*

These are enterprises that received more business and cashflows due to the Covid-19 pandemic. This was due to the increased demand for services and products that relate to either the prevention of or fighting the pandemic or to masses of people starting new income streams for survival. In some cases, the cashflow of this swelling channels category of enterprises increased by between 200% and 250%.

*Anting*

Some entrepreneurs in times before the pandemic had developed habits of building reserves like ants that prepare and store their food in summer in preparation for the winter. When the winter of the Covid-19 pandemic broke, the anting entrepreneurs drew down on these reserves for both day-to-day survival and for investing in digging new channels of income.

*Digital reconnection*

The Covid-19 pandemic brought about social-distancing which brought in customer-distancing , that is, customers forced not to get a service or product from the entrepreneur. The Covid-19 pandemic ironically masked some business from their customers. In response to customer-distancing, some entrepreneurs ventured into online platforms as the only affordable and legal way to connect with old and potential new customers.

They cured customer-distancing through digitalisation, a medium which the virus cannot penetrate. This, for some, opened new markets for them, especially the diaspora market. Business from the diaspora came in in response to the pandemic as those in the diaspora either assisted their own relatives to dig new channels of cashflow or started or accelerated developing assets for themselves as a fallback position.

In some cases, paid-for services were actually delivered through digital platforms. This helped prevent a total loss of business. In some cases,  this helped restrict cashflow losses to between 50% and 65%, in comparison to zero cashflow for similar businesses that did not digitalise service provision.

*Fragmentation*

This is related to digital reconnection. Some service providers that did not digitalise created opportunities for their employees to take away clients from the business  by providing customised service at lower cost.

*Conclusion*

This report did not mention specific names and specific industries because the nature of Classic Grounded Theory is not describing the participants but establishing common patterns of behaviour participants use to solve a common main concern.

This report was prepared by Brett Chulu. Chulu is a published Classic Grounded Theory researcher.

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