Original Research

A survival framework for SMME’s based on COVID-19 events in the Western Cape of South Africa

Carin Strydom, Stephan van der Merwe

Received: 14 Aug. 2024; Accepted: 14 Jan. 2025; Published: 18 Feb. 2025

Copyright: © 2025. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Background: Many small-, medium- and micro-sized enterprises (SMMEs) struggled for survival in South Africa during the coronavirus disease 2019 (COVID-19) pandemic. Unexpectedly, several SMMEs in the Western Cape province of South Africa not only survived but also thrived. Investigation was therefore needed to better understand how they survived to fill the knowledge gap.

Aim: This research aimed at ascertaining the reasons why and how SMMEs survived a prolonged pandemic. It thereby investigated the possibilities of developing a framework for SMME survival during crises such as a prolonged pandemic.

Setting: The study involved 16 different types of successful SMMEs, which operated in the Western Cape, South Africa, before, during and after the COVID-19 pandemic.

Methods: The study employed semi-structured interviews with 16 participants as SMME owners, following a qualitative approach. Qualitative data were generated via snowball sampling following the COVID-19 pandemic and were analysed manually.

Results: Study’s findings enabled the development of a proposed survival framework for SMMEs during times of crisis, such as a pandemic.

Conclusion: The study succeeded in better understanding the challenges experienced by the SMMEs during the COVID-19 pandemic. It revealed several survival factors and actions, including the contribution of the Western Cape Government’s attempts towards an entrepreneurial ecosystem.

Contribution: Drawing in part on resilience theory, a possible survival framework is proposed for entrepreneurs to consider whereby they may establish self-constructed support for the continuity of their SMMEs during prolonged times of crisis.

Keywords: challenges; networking; entrepreneurial ecosystems; interventions; pre- and post-COVID-19 pandemic; resilience; self-constructed support; communication.

Introduction

Almost two decades before the coronavirus disease 2019 (COVID-19) pandemic struck, Osterwalder stated that entrepreneurs operate in a competitive, constantly changing and progressively uncertain economic environment, which complicates their business decisions (Osterwalder 2004:11). Even before the pandemic, a highly competitive economic environment resulted in 70% of South African small-, medium- and micro-sized enterprises (SMMEs) closing in the first 5–7 years since their inception for various reasons (Bushe 2019:1; Fatoki 2011:193; Ramukumba 2014:1). The arrival of the pandemic highlighted a time of progressive uncertainty in the South African economy. The reality of the COVID-19 pandemic and the effects of the challenging economic lockdown brought closure and trauma to several SMMEs, resulting in a reduced gross domestic product (GDP) contribution for South Africa (Ikwegbue et al. 2021:272). Statistics South Africa (Stats SA) reported in May 2020, that almost half of all businesses reported a pause in trading activities during the national lockdown, and 9 out of 10 businesses reported reduced turnover (Stats SA 2020c). Data indicated that over two million jobs were lost in South Africa in just the second quarter of 2020 (Stats SA 2020a).

Despite this dire picture, some SMMEs survived. A few even experienced breakthroughs or thrived during the lockdown (Department of Social Impact & Transformation webinar 2020; Fubah & Moos 2022:14). Before determining why some SMMEs survived, a definition of what exactly is an SMME is needed. A functional SMME classification according to the Organization for Economic Co-operation and Development (OECD) provides a view on SMME sizes in South Africa, and this is the definition that the authors support (refer to Table 1).

A study that explored the relationship between leadership behaviour and team effectiveness, among other matters, during the COVID-19 lockdown in South Africa showed a lack of empirical evidence regarding the emerging pandemic situation. Little information was available on the impact of the extended lockdowns and how it affected the performance of employees and businesses (Koekemoer et al. 2021:2). In addition, little knowledge of lockdowns and their effects on SMMEs was available (Fubah & Moos 2022:1). Research is thus needed to fill this knowledge gap.

Research into SMME survival in South Africa may thus allow for a better understanding of how and why some SMMEs managed to survive in the Western Cape province. Research conducted at the mid-pandemic stage allowed for the study of a crisis and the subsequent SMME reactions as it unfolded in the United Kingdom (UK) (Doern 2020:1). Such research prompted further research into this issue (Odeku 2021:1) and equally prompted research in South Africa on the effects of lockdowns, restrictions and regulations, and its socio-economic impact on SMMEs. Consequently, a myriad of research emerged on the impact of COVID-19 (Brown et al. 2020; Koekemoer et al. 2021), also inquiring into why some SMMEs survived in spite of the pandemic, as addressed by this study.

Purpose of the study

This paper enquires into the possible development of a framework for SMME survival during future prolonged crises. The reported study was based on data gleaned from SMMEs that survived the pandemic in the Western Cape, South Africa. To explore the applicability of resilience theory, participants from relevant SMMEs were interviewed to ascertain what strategies they adopted to survive.

The original problem concerning SMME survival and a lack of growth started sometime before the pandemic, when various scholars and researchers agreed on a lack of updated information on SMMEs. This lack of information meant smaller businesses have been excluded from most surveys and studies in the past (Chandra 2018:2; Faherty & Stephans 2016:350; Roper & Hewitt-Dundas 2017:559), ameliorated by a lack of empirical studies on SMME entrepreneurship (Scott, Penaluna & Thompson 2015:86). Information on this topic remains scant, despite several studies elsewhere on the impact of the COVID-19 pandemic (Kuah 2023; Rodrigues et al. 2021; Setyoko & Kurniasih 2022). However, information on how some SMMEs managed to survive or even thrive amid severe constraints in the Western Cape was scarce. The events this study refers to include the lockdowns, their effect on SMME’s, the new laws and regulations promulgated by the South African government regarding restrictions of people in the shops, availability of products because of factories being affected by COVID-19 illnesses as well as the availability of staff because of illness or periods of isolation (Strydom 2024:252–263).

Despite this crucial knowledge gap, the small business sector has a proven record of contributing significantly to the South African economy. For instance, reports from 2020 have shown that small businesses generated more than one-fifth of total formal economic turnover. In addition, small business contributions increased from 29% to 42% over the 6-year period in the business service industry prior to the pandemic (Stats SA 2021).

The survival and thriving of SMMEs during prolonged times of crisis has opened interesting questions for inquiry: How did some SMMEs survive the pandemic while others closed their doors? How did a few even manage to thrive during the pandemic? Such questions evolved into this research that explored the ‘how’ and the ‘why’ of the survival of SMMEs (see also the work of Markides, as reported by Osterwalder 2004:42). A successful SMME that survived the COVID-19 pandemic in the Western Cape, for this study, was seen as a small business with employees varying from less than 5 to maximum 200, which existed from prior to the COVID-19 pandemic (in South Africa before March 2020), and whose doors were still open for business after the end of the COVID-19 pandemic after 22 June 2022, as this was the date when the South African Government had done away with all travel restrictions based on COVID-19 regulations (Flightcentre 2022). The reason for focussing on SMME’s in the Western Cape province was because of so much previous focus on Gauteng and KwaZulu-Natal (KZN) with very little focus on how SMME’s perform in the Western Cape province of South Africa, predominately run by the then opposition political party.

Structure of the paper

Following the introduction, the present paper states the study’s research objectives, presents a review of relevant literature on factors impacting SMME’s, especially during the pandemic, explains the research methods and results, reports the study’s findings, and ends by highlighting some implications of the research and provides recommendations for future research.

Research problem and question

Much research exists on how the COVID-19 pandemic impacted businesses in general (Katare, Marshall & Valdivia 2021; Kuah 2023; Rodrigues et al. 2021; Setyoko & Kurniasih 2022). However, few studies have investigated why and how some SMMEs managed to survive despite the strenuous effects of the lockdown. The primary objective of this study was, therefore, to inquire into developing a framework for SMME survival based on events in the Western Cape province during the pandemic.

In particular, the study investigated how the selected group of SMMEs managed to reconfigure their business models by employing specific techniques and what they did to ensure their business survival during the COVID-19 pandemic (see also Nani & Ndlovu 2022:58).

Literature review

Background

Research on the survival of small businesses during an ongoing pandemic proved to be scant (Katare et al. 2021:2213). In particular, a lack of empirical research into SMMEs on the African continent was evident (Mkhonza & Sifolo 2022:483). Even though several studies have been conducted since the start of the pandemic, few results were available on what caused the survival of SMMEs during the pandemic. A review of relevant and pertinent literature was thus conducted on key concepts and events regarding the identified problem (see also Bloomberg & Volpe 2016:105; Mkhonza & Sifolo 2022:483).

What seemed important was to generate some insight into entrepreneurial survival, applicable theories, entrepreneurial success and the measurement of success (Gorgievski, Ascalon & Stephan 2011:208). The importance of entrepreneurship, and especially why SMMEs were critical to economic progress, was highlighted (Malinao & Ebi 2022:297), a factor that is particularly significant in a developing or emerging market economy such as South Africa.

The definition of successful entrepreneurs remains a trendy topic, and measuring entrepreneurial success has been intensely researched in the past by various scholars (Angel, Jenkins & Stephens 2018:614; Gorgievski et al. 2011:208; Marais, Du Plessis & Saayman 2017:10), indicating different ways of determining various success factors. Yet, there appears to be no single definition of entrepreneurial success (Owens et al. 2013:73). Defining or describing more closely the successful or surviving entrepreneur during a pandemic such as the COVID-19 pandemic was necessary to set the stage for the empirical part of this study.

According to the World Health Organization (WHO), the COVID-19 crisis was first identified in China in December 2019 (Sewpaul et al. 2021:2) and soon spread to the rest of the world, becoming a global pandemic. As of September 2020, 213 countries worldwide were affected (WHO 2020). The unexpected worldwide epidemic brought chaos to global trade and economies, heavily impacting global economies (Pu et al. 2021:1). The severity of the impact of the pandemic on South Africa (Ikwegbue et al. 2021), and particularly on the Western Cape province, was thus considered for closer inquiry into the SMME business sector. Very few studies on SMME success in the Western Cape province are available; hence, the decision was taken to focus on the successful SMMEs in the Western Cape to ascertain the reasons for the high GDP per capita based on performance in the Western Cape, as depicted in Figure 1.

FIGURE 1: Chart of gross domestic product performance in South Africa 2020.

Entrepreneurial ecosystems

The existence of ‘entrepreneurial ecosystems’ affected other small businesses during the pandemic (Rashid & Ratten 2021:2). Hence, it was important to determine whether entrepreneurial ecosystems may have played a role in the survival of SMMEs in the Western Cape during the pandemic. The characteristics of well-known entrepreneurial ecosystems worldwide were therefore explored to understand how this concept evolved over time in other economic hubs (Isenberg 2011:1), and to explore how the South African situation compared to the global picture. Entrepreneurial ecosystems can be viewed as organised attempts to launch environments, which are conducive to increasing the success of ventures that are newly formed (Audretsch et al. 2018:313). Well-known examples are Silicon Valley and Sandi Cesko. Isenberg found the example of Sandi Cesko in Slovenia intriguing, where the most prominent television shopping channel in 20 Central and Eastern European (CEE) countries was created, and it became the leading multi-channel retailer in 20 CEE markets (Isenberg 2011:4). The plans for developing different economic zones (Western Cape Government 2020) in South Africa were thus reviewed against the actual development of these plans by regulatory authorities in the Western Cape to compare how this economic zone development compared to international entrepreneurial ecosystems (Strydom 2024:85–90).

The literature exploration then drilled down into the entrepreneurial ecosystem of the Western Cape via a desktop review of the entrepreneurial ecosystem in the province, first before the start of the pandemic and then subsequent to the intense development of the Western Cape entrepreneurial ecosystem during the period referred to as ‘mid-pandemic’ (Western Cape Recovery Plan 2021). Several parties or role players from different sectors in the Western Cape were reported to have joined forces to create the existing entrepreneurial ecosystem comprising initiatives such as Silicon Cape, LaunchLab, Startup Bootcamp, Wesgro and the Western Cape Government, all working together (Wesgro 2020) during the COVID-19 pandemic.

Firstly, the impact of the pandemic on world economies was examined. Secondly, the impact on South Africa was reviewed. Thirdly, the attention of this study then shifted to an in-depth exploration of the impact of the pandemic on the Western Cape province. Special mention is made of the effort that went into the Western Cape Recovery Plan 2021 (Western Cape Government Annual publication 2021) and the different interventions that created a favourable entrepreneurial ecosystem in the Western Cape. Such strategies and actions created the backdrop for SMMEs to operate during the most challenging economic circumstances of lockdown – the worst ever experienced by SMMEs. The Western Cape Government collaborated with the Digital Economy Unit and the National Department of Economic Development and Tourism, as well as Wesgro and other facilitators in the technology ecosystem in the Western Cape region, such as the Cape Innovation & Technology Initiative (CiTi), Silicon Cape, LaunchLab and Startup Bootcamp to introduce new technological initiatives (Wesgro 2020; Western Cape Government 2020). This initiative positioned the Western Cape as Africa’s Tech Capital, assisting SMMEs to work from home and mostly online during the pandemic, thereby creating an important level of self-constructed support (Wesgro 2020).

Resilience

One of the links or the interrelatedness identified by this study was represented by the key term ‘resilience’. Thus, the underlying theories of firstly resilience and secondly, business resilience were included in the literature review of applicable entrepreneurial theories in this study. Resilience theory drew on several bodies of research, first used in the psychological field. The American psychologist Norman Garmezy, who studied resilience in children, is often considered as the founder of resilience theory. His influential research, combined with the longitudinal studies of Emmy Werner (a 40-year study) and the work of Ann Masten, who expanded the theoretical concept to different stages of life, laid the foundation for a better understanding of resilience and its applicability to other fields (Masten 2020). The concept of business resilience, mainly post-pandemic, has been widely discussed around the globe, and studies have recently emerged from Indonesia (Purnomo et al. 2021), the United Arab Emirates (Zakaria et al. 2023), Lithuania (Župerkienė et al. 2021) and Spain (Chaves-Maza & Martel 2020) to indicate that resilience was indeed identified among SMME owners who survived the COVID-19 pandemic. This resilience factor was confirmed (as later indicated) by salient remarks from SMME participants in the present study with comments such as: ‘Never say die’ (SW002), ‘you have to fight for your survival’ (STR001) and ‘stand strong’ (SW003).

The occurrence of business resilience during troublesome times caused researchers to review existing academic resources on strategic, operational or business resilience (Gorjian Khanzad & Gooyabadi 2021:127–141; Steen, Haug & Patriarca 2024:1–13). A resilience framework for small businesses post-COVID-19 was developed based on a qualitative analysis of existing academic resources focussing on strategic resilience for small businesses, and it agreed in large parts with the empirical study results of the Strydom COVID-19 study’s real-life results while considering the importance of external and internal factors (Gorjian Khanzad & Gooyabadi 2021:131; Strydom 2024:530–536).

Furthermore, there appears to be a clear separation between normal resilience, which has been referred to as ‘Psychological resilience’ post-pandemic (Manchia et al. 2022:3), versus the concept of ‘business resilience’ which refers to surviving SMME’s that are still operational post-pandemic (Aldianto et al. 2021:3132). Aldianto et al. also provided a business resilience framework for startups to encourage entrepreneurs to focus on an innovation process and become more ambidextrous following their semi-structured interviews and case study approach in Indonesia (Aldianto et al. 2021:3132). Their framework focussed on the same principles of this study, such as technological abilities, leadership agility, dynamic capabilities, innovation, knowledge and business resilience, with a more comprehensive overview of these concepts shown in Figure 2, in the current framework as developed (Aldianto et al. 2021:3132). A study carried out in Macau, China, on six locally based small businesses also had the same finding as the Western Cape South African study, namely that the sudden decline in demand and sales was one of the aspects that impacted SMME’s the most (Alves et al. 2020:1). These scholars developed a small and medium enterprise (SME) crisis resilience model by focussing on much the same concept as in the South African study, namely focus on product diversification, exploration of new markets and enhancement of learning (Alves et al. 2020:1).

FIGURE 2: Framework for small-, medium- and micro-sized enterprises to survive a prolonged crisis.

A recent South African study in the field of industrial engineering addressed the same core elements of this COVID-19 study, namely personality attributes of the entrepreneur, skills and experience, a focus on products and services, the importance of marketing and financial characteristics and skills (Snyman 2020:222–223). The SME survival and growth framework presented also included the internal contextual blocks and the external contextual blocks in the same way the Strydom study does, with other similarities including motivational, performance, strategic fit and entrepreneurial orientation blocks, with a total of 6 blocks as focus areas (Snyman 2020:256) versus the Strydom framework for SMME survival framework with a total of 21 blocks or focus areas, with several sub-categories (Strydom 2024:526) as illustrated in Figure 2.

Research design and methodology

Research design

This study examined how SMMEs in the Western Cape, South Africa, managed to survive the COVID-19 pandemic and whether a specific entrepreneurial ecosystem enabled them to survive or thrive. A qualitative research design was used to inquire into the problem, following the research onion design of Saunders et al. in broad terms (Saunders, Lewis & Thornhill 2019:174). By using semi-structured personal interviews with 16 successful SMME owners (see summary in Table 2) who managed to survive or thrive during the pandemic, it was possible to probe their specific economic circumstances (Osterwalder 2004; Rashid & Ratten 2021:5) before, during and after the COVID-19 pandemic. The recent 2020 study of Snyman also illustrated how 20 recent SME criteria collection methodology studies focussed predominately on interview-based research methods (Snyman, 2020:217). In the Strydom COVID-19 study, the participants were included by using the snowball sampling technique as access to SMME owners was highly complicated during and even following the pandemic.

The study initially intended to focus on a standard 10-16 participants for this qualitative study or at least until saturation is reached (Strydom 2024:28). Because of the existence of the Protection of Personal Information Act (POPI Act) in South Africa, and as per the requirement of the Ethics Committee of the university where the study was conducted, snowball sampling was used to select the sample. In the end, 16 participants were selected to obtain quality-rich data before the point of saturation was reached. Morse advised against using too little data (Morse 2020:5), as ‘the more shallow the analysis…, the more trivial the results’ (Strydom 2024:29). Interestingly enough, other recent studies on the African continent also made use of 16 participants in each entrepreneurial study (Engidaw 2022:1–14; Zozimo, Jack & Hamilton 2017:889–911).

The criteria that had to be met for inclusion of participants in this study included that SMME owners had to be older than 21 years of age (for ethical purposes) to partake in the study, they had to be operational in the Western Cape province of South Africa, they had to be small business owners (with less than 200 staff members), and their businesses had to exist before COVID-19 (pre-2020), still be in operation during the lockdown periods and still be in business when the interviews were conducted in late 2022 (Strydom 2024:143), to be regarded as successfully surviving the COVID-19 pandemic.

Research context and data collection

This study probed SMMEs in the Western Cape, a province that has shown exceptional growth in recent years compared to other South African provinces (Wesgro 2020). The population of the Western Cape is 7.4 million, and at the time of the study, it constituted the third largest province in South Africa (Stats SA 2020b). A myriad of SME studies are available mostly in Gauteng and KwaZulu-Natal, with very few studies in the Western Cape, and because it is population-wise the third largest province, and because of the economic performance of GDP per capita in the Western Cape as per the information given in Figure 1, the decision was taken to perform this research in the Western Cape province. Entrepreneurs selected for this study varied in race (in order to avoid discrimination, this was not recorded in Table 2, but the list comprises all races in South Africa), gender (as self-identified by the participants), age, size of business, duration of being an entrepreneur and field of operation. Participants were selected by snowball sampling, adhering to ethical requirements as set by the university of study and the restrictions and limitations of the POPI Act in South Africa. The exact size of the SMME population in the Western Cape was difficult to determine because of the existence of the informal sector. However, the total number of SMMEs (formal and informal) amounted to 2 404 564 in the second quarter of 2021 in South Africa at the time the research was conducted (SEDA, 2023).

Research objectives related to resilience and survival theories were formulated to ascertain how and why the SMMEs survived the COVID-19 pandemic. The interview guide for semi-structured personal interviews (as survey research instrument) for an exploratory qualitative study thus focussed on addressing the research objectives. The responses from the 16 face-to-face interviews generated rich data that were ultimately coded.

All participants were contacted prior to interviews once they were introduced via the snowball sampling method. They had to provide written consent to participate in the study before interviews commenced. Participants were informed beforehand of the nature and objectives of the study, and those who did not wish to participate were excluded. All interviews took place adhering to social distancing procedures and with COVID-19 protocols in place. All interviews were recorded with permission obtained from the participants in the written consent forms.

Each participant was interviewed in their preferred setting. Some participants requested the interview protocol beforehand to enable them to prepare for the interview. Thus, the interview guide was e-mailed to them in advance to accommodate those participants. Most of the participants preferred to be interviewed spontaneously.

The interviews were audio-recorded and transcribed verbatim, followed by a manual data analysis process. An Excel coding bible was constructed as per colour-coded theme according to the thematic analysis process utilising all 2631 code words and phrases (Creswell & Creswell 2018:270). This process was then followed by developing matrices, operational network diagrams, a code table and systemised mind maps to determine how data interacted and to enable the researcher to identify interrelationships between the themes.

Ethical considerations

Ethical approval to conduct the study was obtained from the North-West University, Economic and Management Sciences Research Ethics Committee (NWU-00694-22-A4). All study participants were over 21 years of age at the time of the study and they all had successful SMMEs, which were in existence before the COVID-19 pandemic, and survived the pandemic. All participants provided written consent to participate in the study and their identity was treated as strictly confidential. Code names were allocated to each participant and used in the original study to protect their identity.

As the trustworthiness of data is critical for research, and the knowledge gap can only be filled with valid and reliable data that can be trusted and shared between all participants, the researcher ensured to adhere to all trustworthiness criteria for this study. Researchers agree that transferability, dependability, credibility and confirmability are the four most important criteria for qualitative research trustworthiness (Bickman, Rog & Maxwell 2014:244; Wahyuni 2012:77). In this study, it was prudent for the researcher to indicate how these criteria were met as well as objectivity and generalisability (Strydom 2024:171–173).

Special attention must be assigned to two technical considerations: reliability and validity (Creswell & Poth 2018:443). Reliability refers to the extent to which the data collection technique will yield consistent findings (Saunders et al. 2019:815) or whether a particular technique will provide the same result when repeatedly applied to the same object or variable. Validity refers to the extent to which data collection accurately measures its intended measures (Saunders et al. 2019:820). The reasons for the SMME’s survival are critical to this study, as the study’s trustworthiness cannot be questioned. The data to be collected must, therefore, be reliable and valid, and all precautions were undertaken to ensure the reliability and validity of this qualitative research study by keeping all voice recordings of interviews and transcriptions in a safe venue, not accessible by the Internet.

Analysis of the code

After transcribing the interviews verbatim, the data were coded using the thematic analysis method (Creswell & Creswell 2018:270) to analyse the data as per different and similar patterns across a specific data set (Bryman et al. 2014:385). This study employed manual methods to analyse the generated data and identify 2631 code words in total. Code words were first identified from the transcribed interviews. These codes were then summarised into themes, the categories within the different themes were identified and then it was summarised into tables and matrices, followed by network organograms and Mind Maps.

Although 12 themes emerged from the code in the original study, for this paper, a concise version of 6 themes with sub-categories can be provided, which were:

Theme 1: Challenges (with sub-categories of pre-COVID-19 challenges and during COVID-19 challenges).

Theme 2: Reasons for starting the SMME (Motivation and role-model).

Theme 3: Skills needed (Personal and leadership skills).

Theme 4: View on success (pre-COVID-19 views on what was success versus post-COVID-19 views).

Theme 5: Outside influence (Entrepreneurial ecosystems and Western Cape Government interventions).

Theme 6: Impacting factors on survival (Actions employed and also their advice and recommendations).

The code words per theme were then organised into visual aid tools for in-depth analysis and comprehension. To illustrate, the network organogram and mind map of ‘Challenges during COVID-19’ are shown in the figures that follow as this process was repeated for each of the different themes. The code words were originally sorted into 12 different themes in the PhD study, and a unique colour was assigned to each. Wall coding was performed instead of a tabletop format, because of the large number of codes. The code words were then sorted manually into network organograms for each theme (see Figure 3). Each theme was reconfigured into a table with quotations and a matrix to indicate coherence among participant responses. A mind map was then created for each theme (see Figure 4).

FIGURE 3: Network organogram of reported challenges during coronavirus disease 2019.

FIGURE 4: Mind map of reported challenges during coronavirus disease 2019.

The process of manually sorting and analysing data, often referred to as a ‘tabletop categorising process’, literally arranges cut-out chunks of data (words and phrases) in a tabletop format (Saldana 2016:231). Data codes were ‘moved around’ as much as necessary to reach a final structure that ‘felt right’ before creating an operational diagram. The researcher moved the data around until it reached the stage of a ‘perfect fit’ (Saldana 2016:231). Data were then divided into categories and sub-categories for each theme. Interrelated links or repetition of codes between themes were considered as main findings. In the original study, 12 themes were identified, which were reduced to 6 themes to present a more concise and rounded perspective on the findings of the study.

Findings

The study’s findings resulted from analysing the data, organising the coded data into themes, and summarising the main trends into tables, matrices and network organograms, as explained in the previous section. ATLAS.ti software was initially considered, but a manual qualitative analysis process was decided on to fully utilise all the nuances of the data across four different topic areas: financial, economic, philosophical and emotional.

The findings of this study were compared with other recent similar studies elsewhere to see how the SMME’s survived, for example, in a recent study conducted in the Philippines, 12 SMMEs were investigated on how the managerial capabilities of owners or leaders would drive the survival of their businesses in Santiago City. As per their findings, it was the managers and owners who put in a lot of extra work on their duties and responsibilities that resulted in their businesses surviving (Malinao & Ebi 2022:310).

The findings of each theme were discussed separately in the original study, with possible synergies observed if other recent studies on that particular finding were available.

The findings and conclusions of this study are interwoven in the identification of themes, the most agreed upon code among participants in themes and the various interrelated links between themes. The original themes were identified through thematic analysis (Creswell & Poth 2016) based on the data from semi-structured interviews. The 12 original core themes identified in the original study were as follows:

1. Challenges experienced by SMMEs in the Western Cape before COVID-19

2. Unique challenges experienced by the SMMEs in the Western Cape during the COVID-19 pandemic

3. Motivating factors contributing to the entrepreneur starting his SMME in the Western Cape

4. Influence of role models or mentorship for the SMMEs

5. Personal characteristics, skills or attributes that an SMME owner should possess

6. Importance and type of leadership skills

7. How the SMME owners in the Western Cape viewed success before the COVID-19 pandemic?

8. How the SMME owners in the Western Cape viewed success after the COVID-19 pandemic?

9. Whether there were any Western Cape Government interventions that enabled the SMMEs in the Western Cape to survive

10. If there was an active entrepreneurial ecosystem in the Western Cape.

11. What actions the successful SMMEs in the Western Cape took to survive the COVID-19 pandemic?

12. Advice and recommendations of surviving SMMEs to future SMMEs in a similar situation.

For a more user-friendly version, in this paper, the combining of chronological consecutive themes of the 12 above-stated themes were grouped into 6 themes with sub-categories to provide a more concise version for ease of interpreting the research. Theme 1 and Theme 2 were contracted into one theme by simply referring to it as ‘Challenges’ (with two sub-categories, pre-COVID-19 challenges and during COVID-19 challenges). Theme 3 and Theme 4 can be contracted into reasons for starting the SMME (motivational reasons and role-model reasons). Theme 5 and Theme 6 refer to the skills needed by an small-, medium- and micro-sized enterprises (SMME) owner (personal attributes and skills as well as leadership skills). Theme 7 and Theme 8 refer to views on success (pre-COVID-19 and post-COVID-19 views on success, as there was a big difference in how their perceptions changed from before the pandemic to after). Theme 9 and Theme 10 refer to two outside influences on the SMME (these were entrepreneurial ecosystems or the interventions by the Western Cape Government). Finally, Theme 11 and Theme 12 reflect on impacting factors on the survival of SMMEs (factors and recommendations).

There were several links between themes, which were included in the final survival framework because of their repetitive nature and the fact that these concepts were rendered as important and relevant by the participants. These key concepts are discussed next.

Financial matters

The code word ‘finances’ was mentioned in 10 of the 12 themes, from challenges to how to analyse the finances of a business, how financial skills are critical to run a successful SMME, how financial skills could be self-applied or outsourced, or as an action taken. Doing daily financial analysis, being in control of the finances (both the income and expenses) and other similar financial actions were critical actions mentioned on how to survive a crisis such as a pandemic. Also under recommendations, they suggested to preferably do a financial skills course before starting an SMME.

As indicated by the data, the link ‘financial’ pointed to a prominent aspect as related to, for instance, the need for cash flow for survival during a prolonged crisis (Faherty 2021:19). One participant, for example, verbalised this issue as follows: ‘And financial skills – you cannot operate a business if you do not understand the finances. You must be able to budget and plan ahead’ (HLB002).

Networking

The phrase ‘social networking’ was also recognised as a crucial link or relationship between several themes. This finding echoes the literature, as networking and mentorship as concepts have been found to help entrepreneurs share business advice and business operations for resources such as finances, suppliers and distribution (Sequeira, Wang & Peyrefitte 2016:8). Networking was mentioned under several themes to the extent that the circle around the suggested framework has been populated with the concept of networking to indicate that it could encompass most things an SMME owner can do to ensure SMME survival. Participants agreed that if an SMME owner is in constant contact with staff, customers, suppliers, industry changes and legislation, there may be a better chance of surviving a crisis than those not as well-connected. One participant highlighted the importance of being well-connected and constantly networking as follows:

‘So if you go onto their website, you will see our details as their preferred supplier … it gave us a seat at the table … you have to be well-connected.’ (BVL001)

Communication

The term ‘communication’ was also identified as a main link between the identified themes. Effective communication with various parties involved, from suppliers to stakeholders, customers, regulatory bodies and the staff of the business, was emphasised several times by various participants. The relevance of transparent communication was highlighted in an Irish study (Faherty 2021:14), especially while facing the problem of social distancing and having fewer customers in store. This issue emerged prominently for those entrepreneurs who required contact with their customers, such as in the beauty industry or those selling products that cannot be sold online and then delivered (e.g., fuel sales). Small-, medium- and micro-sized enterprise owners had to find creative ways in which to communicate with their clients and their suppliers. Studies emphasised the importance of effective communication during the COVID-19 crisis, underlining a stepped approach.

Firstly, a decentralised communication process is best for larger organisations. Secondly, leaders should communicate with their employees to reduce anxiety. As post-September 11 studies have found, leaders of businesses and organisations have a unique role to play in effective communication. Thirdly, business owners should communicate regularly with their customers to ensure and reward customer loyalty (Argenti 2020; Faherty 2021; Yu et al. 2022). The study participants stressed the importance of regular and proper communication with all stakeholders. Two direct quotes may suffice here: ‘So we listen to what our customers’ needs are, and we try to supply in their demand’ (SW003), and ‘that taught me to speak well with people and be a better salesman’ (STB001).

Extreme focus

All the participants in this study saw the ability to focus on the business during a crisis and to allow nothing to deter from the survival of the business as a vital skill. They had to fight for the survival of their business, similar to SMMEs in the United Kingdom (Doern 2020:8). The finding of ‘focus’ as a link emerged under several themes as an attribute seen and admired in mentors or role models. It was a skill identified as a personal attribute that one should possess to own a successful SMME. It was identified as a leadership skill, a way of viewing success, a focus on happiness and being alive rather than a monetary focus. It was mentioned on several occasions as the way to act to survive (e.g., ‘focus on finances’ [DBN002]), and as advice for future entrepreneurs (e.g., ‘focus on what one has experience in’ [GB001]).

Business resilience

The term ‘business resilience’ was also identified as a prominent link. The levels of resilience found among SMME owners can differ substantially. As an example, a study was conducted in the United States among 463 small business owners on their resilience during the COVID-19 pandemic. Those who were able to obtain government assistance via the CARES Act indicated that (50% of the respondents) they did not see themselves as resilient and did not foresee that their business would recover in the next 2 years to enable them to repay their loans, indicating a low level of resilience (Katare et al. 2021:6). In South Africa, the same level of government support for SMMEs was not available. This is possibly why South African SMMEs knew they had no choice but to survive on their own or not survive at all. Some participants in this study indicated, for instance, that they ‘lost all trust or hope that a government will care’ (MC001) for them. Another said: ‘One has to look after oneself’ (SW001). These code words from the participants were in line with recent similar studies conducted on business resilience, as a proactive stance based on resilience thinking is required for business survival (Steen et al. 2024:1). Most participants in this South African study admitted that they only realised their resilience during and after the pandemic. In the UK, it was reported earlier that crisis management and resilience skills enabled entrepreneurs to adapt (Doern 2020:9).

These 16 surviving participants indicated their ability to overcome adversity, similar to the children in the Garmezy, Werner and Masten studies, who overcame hardships and became stronger (Masten 2020). In addition, in an Irish survey, one of the findings at a glance was that ‘resilience’, as the ‘businesses demonstrated a resilient mindset in the face of adversity’, contributed to the way in which family businesses survived the pandemic (Faherty 2021:11).

Managerial implications

Findings from the themes and their common linkages were coherently considered in developing a relevant framework for SMME survival that may have extensive managerial implications. The suggested survival framework is depicted in Figure 2, followed by a brief discussion of its main features. Although this framework is much more complex, incorporating more elements than recent frameworks, it was necessary to incorporate all the elements that played a role in the successful survival of SMME’s in the Western Cape of South Africa before comparing it to others. Some recent studies also developed different types of frameworks or models in terms of survival. Another South African study recently developed a framework that supports SMME growth and survival by developing an SME survival and growth sub-framework consisting of 6 main elements, namely internal context, external context, motivation, entrepreneurial orientation, strategic fit and performance (Snyman 2020:256), with most of these exact elements also featuring in this study’s framework for survival of a prolonged crisis. The 12 main elements of an earth-quake recovery framework (Cremen, Seville & Baker 2019:2) and the 3 elements of the resilience framework (Steen et al. 2024:6) were reviewed. The majority of these reviewed categories were identified as focus areas in this study’s framework. In the 3-element oval with four core elements in the centre of the Strategic Resilience Framework (Gorjian Khanzad & Gooyabadi 2021:137), the core elements can also be identified in the comprehensive framework in Figure 2.

Discussion of key findings: Explaining the framework

The bottom section in the middle of the framework indicated as ‘Actions undertaken by successful SMMEs who survived COVID’ shows that the foundation of a successful business should be a proper one, consisting of different layers. The multilayered foundation incorporates all the initial planning actions, as planning is a vital skill (Doern 2020:5) that an SMME should use prior to, during and following a prolonged crisis. Suggested actions to be taken should include:

1. Think/plan/do actions as the foundation of all actions

2. Positivity and clear focus throughout

3. Resilient attitude is a key feature

4. Adaptability to new and unexpected situations

5. Self-constructed support for business continuity in addition to the ‘normal’ course of conducting business.

When facing a prolonged crisis such as a pandemic, resilience seems vital for the foundation and survival of any SMME. In a recent mid-pandemic study, it was found that SMMEs that survive ‘… need to adopt a resilient approach comprising unorthodox thinking and mindful execution …’ (Zutshi et al. 2021:11). Resilience in the entrepreneurial context has also been described as a skill that emerges when managing difficulties on a successful basis (Luthans et al. 2010). According to a recent study on resilience, it became evident that a proactive stance on resilience thinking is required in a time of great uncertainty (Steen et al. 2024:11).

The proactive focus of an SMME owner should thus be on the business itself, with a resilient mindset; this framework is depicted by the oval in the centre of this framework (see Figure 2), representing the successful SMME as the business owner’s main focus. The SMME will succeed more easily if entrepreneurs keep their primary focus on the SMME for the duration of the crisis. The central position of the SMME in the framework can also be seen as the ‘heart of the home’, the safe inner sanctum that a successful business provides to all its inhabitants.

Two categories forming part of the framework cannot be described as physical actions but are considered as ‘Mind matters’ and ‘Attitude’. These two crucial elements were generated from the more ‘difficult-to-substantiate’ answers provided by the participants on aspects relating to their actions undertaken and their recommendations and advice. These actions and advice are strongly related to spiritual or mindfulness issues. Several participants mentioned the importance of keeping their minds strong and taking care of themselves. This enabled them to have the capacity to contribute to their business from a place of abundance. The core mind matters included the ability to teach oneself to be positive, not to underestimate the power of prayer, to find one’s purpose and live that purpose, to find one’s inner strength, and to be grateful for what was achieved and survival thus far. Under the core matters identified by participants, it was stressed that survival is much about attitude; a survivor attitude is needed. They also indicated that one needs a will to survive and strength of character to survive as an SMME owner.

The two pillars on the left and the right in the framework provide the internal and external focus areas in the same way that another recent study highlighted the equal importance of internal and external context (Snyman 2020:256). The internal and external foci should not be regarded as mutually exclusive, as attending to both should be of equal importance and performed to the same extent. One ‘pillar’ cannot hold or succeed without the other. Thus, an SMME owner must pay the same level of attention to both the internal (finance, products, staff, technology) and external (marketing, customers, suppliers, stakeholders) focus areas.

The building blocks on both sides are equal in size and quantity, indicating that the same focus should be allocated to all these outer ‘building blocks’, and their content. One building block does not carry a greater weight than the other; they are all equal and similarly needed and are significant for the survival of the SMME.

In the category, ‘Advice and recommendations for future entrepreneurs to survive a pandemic’, the different types of advice from the 16 successful participants may help entrepreneurs achieve success in their personal lives and see their businesses bloom. The flowering pictogram at the top centre of the framework symbolises this state.

The top left flower is indicative of the personal life success of an entrepreneur, with the participants describing the important focus areas for an entrepreneur during a pandemic as religion, having a full cup, living one’s passion and using one’s brain.

The top right flower indicates the aspects of one’s business life that must be adhered to for a business to bloom. These include having the right abilities, applying your expertise and decision-making skills, adhering to standards and following a balanced time management schedule.

The final element of the framework depicts the importance of networking, as emphasised by participants. The entire framework consists of all the critical elements to focus on during a prolonged crisis and is encapsulated by one vital aspect, namely networking. As a recent study conducted during the first lockdown period from March 2020 to April 2020 has confirmed: ‘… the importance of networking and sources of information …’ is priceless for any SMME’s survival (Mukherjee et al. 2023:1).

Limitation

The POPI Act limited the scope and outcome of the study, as only snowball sampling could be applied as a sampling method as prescribed by the Ethical Clearance Committee of the university. Approaching the Western Cape Government for a list of successful SMMEs was thus not possible, limiting the scope, nature and the number of participants in the study.

Recommendation and future research

This study has indicated that a diverse group of SMME owners could survive the difficult circumstances of a prolonged crisis such as the COVID-19 pandemic without the need for an active entrepreneurial ecosystem. The study was based on the lived experiences of SMME owners in the Western Cape, South Africa, who successfully survived a prolonged crisis during the COVID-19 pandemic, with their experiences having contributed to a possible survival framework as a novel contribution to the field of inquiry into SMMEs. It is thus recommended that the proposed survival framework be considered for implementation by SMME owners during any future prolonged crisis to enhance their chances of business survival. Further research is required on other successful SMME’s in the rest of South Africa or even the African continent to ascertain if this framework to survive a prolonged crisis can be applicable elsewhere. Only empirical study will reveal the truth. A more in-depth study is also needed on the existence of a possible entrepreneurial ecosystem in the Western Cape with more participants to ascertain if this factor indeed played a role in SMME survival.

Conclusion and contribution

The ‘new normal’ that immediately followed the COVID-19 pandemic included, among others, social distancing, increased hygiene, mask-wearing and cleaning protocols, a limited number of customers in stores, the need to make appointments for most shop visits, the reluctance of people to do physical shopping, the move to online shopping and working from home. All these changes have posed challenges to SMME owners. Entrepreneurs had to adapt to survive these new circumstances. Firms with high flexibility and the ability to adapt in a time of crisis have an increased chance of survival (Alves et al. 2020:1).

The framework proposed by this study encompasses the ideas, actions, changes and out-of-the-box thinking of the SMME owners that positively impacted their businesses and assisted them in surviving a prolonged crisis such as a global pandemic. Although the Western Cape Government tried with several interventions to create an entrepreneurial ecosystem, the participants felt they could have carried out more for SMMEs during the pandemic.

This study has focussed mainly on the development of an SMME survival framework. The value of such a framework for SMME owners within the broader business and economic context cannot be overstated, as it may mean saving livelihoods and jobs and enabling communities to survive. The use of technology to inform and enhance the use of such a framework may be of particular importance, as has been highlighted recently (see, for instance, Faherty 2021; Rupeika-Apoga, Petrovska & Bule 2022; Wahdiniwaty et al. 2022). The use of technology and e-marketing could thus result in new entrepreneurial theory possibilities regarding SMMEs and could equally form part of an important future research agenda.

Acknowledgements

The authors would like to acknowledge all anonymous reviewers for their remarks that considerably enhanced the manuscript.

This article is partially based on the author, C.S.’s PhD dissertation entitled ‘Developing a framework for SMME survival based on events during COVID-19 in the Western Cape, South Africa’ towards the degree of Doctor of Philosophy in Business Administration & Economic Management Sciences in the Department of Economic Management Science, North West University, South Africa with supervisor Prof. S.P. van der Merwe, received 30 April 2024.

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this paper.

C.S. as the principal author of this article who carried out the conceptualisations of the variables as well as the methodology and the original draft preparation of the study. S.v.d.M. is the supervisor and co-author of the original study on which this article was based.

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

The data that support the findings of this study are available from the corresponding author, C.S., upon reasonable request.

The views and opinions expressed in this paper are those of the authors and are the product of professional research. The article does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this paper’s results, findings and content.

References