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5 ways to protect your SME from business risks

by Barry Venter: CEO of workspace solutions provider, Nashua.
Small and medium enterprises (SMEs) in South Africa have weathered some severe storms over the past five years. The COVID-19 pandemic, the riots in Kwa-Zulu Natal, record levels of load shedding and extreme weather have all put their resilience and adaptability to the test. This context highlights why every SME needs to be proactive in anticipating and mitigating threats to its business.

Let’s look at some of the most common threats and risks that SMEs face, as well as the steps they can take to protect themselves.

1. Power outages and load shedding

South Africans endured 332 days of load shedding in 2023, and so far, 2024 has not been much better. While load shedding has become a way of life for SMEs, proactive business owners need to plan for higher stages of load shedding, more frequent and prolonged outages, and even the (hopefully small) possibility of a national grid failure.

Mitigating the risks

SMEs that haven’t started a journey towards more grid independence should start looking at how they can incorporate solar solutions and battery backup into their businesses. A good starting point is to audit your current energy consumption to understand and optimise your usage of power. From there, you can start rolling out alternative energy to help mitigate power outages and rising electricity costs. 

2. Cyber-attacks and data breaches

Digital technologies empower you to be productive wherever you are, automate processes and engage with your customers. But they also introduce risks such as data breaches and ransomware to your business. One survey of South African businesses found that a third (33%) of those surveyed said their organisations had experienced a cyber incident in the past year.

A cyberattack can be devastating for an SME. Your team could remain stagnant for hours or days waiting for systems to be restored. In addition, a loss of customer information and financial records can make it difficult for your business to operate. The reputational and legal risks are also significant, including potential fines under laws such as the Protection of Personal Information Act.

Mitigating the risks


Information security is a complex field, which is about people, process, policy and technology. A few tips to consider:
  • Educate your employees about how to recognise phishing scams and other social engineering attacks. 
  • Implement policies such as insisting employees use multi-factor authentication (MFA) and long, complex passwords.
  • Make sure PCs and mobile devices are protected with passwords, PIN codes or biometric authentication. Consider adding a physical tracker and enable features that allow data on the device to be wiped if it’s stolen. 

3. Financial and economic risks

There are numerous factors that can disrupt your business cash flow, including the need to spend a lot of money repairing critical equipment, late or non-payment by a major customer, supply chain disruptions that stop you from fulfilling orders, or exchange rate fluctuations that impact your profitability.

Mitigating the risks

SMEs should aim to build some cash reserves to tide them over in a financial crisis. It’s also key to use a modern accounting or ERP solution that helps you watch cash flow, profits, and revenues in near real time. Spotting a red flag like rising costs or a spike in late or non-payments can help you access credit or take other steps to ensure financial viability.

4. Operational disruptions

Operational disruptions refer to unexpected events or incidents that interrupt the normal flow of business operations. Just a few examples include unrest or protests, pandemics, weather incidents like storms and floods, fires, strikes, business robberies, and equipment breakdowns. These incidents prevent your employees and customers from getting on with business as usual.

Mitigating the risks

SMEs can reduce the impact of most operational disruptions by putting a business continuity plan in place. This plan will outline what your employees should do in a range of scenarios to protect themselves, your customers, and your business. They should know where and how to work if they can’t access the office. You can also invest in solutions like uninterrupted power supply (UPS) units, batteries, generators, and redundant Internet connectivity to ensure continuity.

As we discovered during the pandemic, cloud-based business solutions that enable people to work from virtually any location if they can’t access your premises, are a must. Hosted applications like Microsoft 365, SharePoint and an effective document management system allow employees to collaborate and access information in real time, even if they can’t get to the office. Data stored and backed up in the cloud will not be lost if something happens to your physical infrastructure.

5. Legal and compliance risks

Every SME faces a regulatory responsibility, including compliance with laws, bylaws, standards and regulations covering tax, labour, consumer protection, health and safety, data privacy, and the environment. Breaking these rules can lead to a range of negative outcomes, including fines, penalties, harm to your company’s good reputation, legal liability claims and loss of business.

Mitigating the risks

It’s important to get expert advice to ensure you understand and comply with all the laws and regulations that impact your business. The experts can help you put systems and processes in place to streamline compliance. Where possible, automate processes to limit the possibility of human error.
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