At some point, we can relate to a bad customer experience on a personal or professional level. Be it having a special occasion ruined by terrible food or service at a restaurant, a shoddy repair job on your motor vehicle or having your call placed on hold for 25 minutes when trying to resolve a simple issue without success.

In most instances, these experiences have left us feeling disgruntled and inconvenienced, or in extreme cases, we might have even incurred additional expenses or suffered reputational damage. What do we do? We vow never to do business again with the parties involved and advise against them via word of mouth or write complaints on social media platforms.

Customers have the power to either make or break your business.

Recent surveys on customer experience conducted by Forbes Magazine and Bain & Company reveal two important facts that business owners cannot ignore. Customer-centric companies are 60% more profitable than those that are not. While 80% of companies are under the impression that they deliver on customer experience, they responded that only 8% are doing so.

The recent pandemic changed the business landscape dramatically due to global lockdowns. Digital-led experiences have increased and have become the new normal. Companies that were slow on technology uptake were placed in a precarious position and suffered substantial financial losses. Other companies quickly adapted their business models to focus more on service delivery to enable customer retention or expand their customer base.

Knowing Your Customer and where to find them is proven to be of the utmost importance. Their experience will define two-thirds of customer loyalty. If your customers are not satisfied or offered convenience and consistency throughout their journey, they will go elsewhere.

The good news for business owners today is that customer experience technology offers solutions that will benefit your company and customers alike.

We have placed increased efforts on our customer success delivery model that we have embedded in every solution of ours. Our Customer success team are professionals in the B-BBEE industry and boasts deep technical insights into the Codes and relevant sector charters. Internally we have identified a way of work to understand the customer’s operational environment and work together to align goals and objectives, thereby ensuring that the customer is deriving value from our offerings through their time with us.

It is essential to partner with the right service provider; there is an unfortunate misconception around value, especially in the South African market. In a covid struck environment, everyone looks for the lowest price. Companies are impressed by who talks the “bigger game” at a sales initiative but not on facts. Facts must drive due diligence. Mpowered has a customer satisfaction rate of over 90%, an average retention of customers for five years (some have been with us for a decade!) and a Net promoter score way above average for software as a services business.

We focus our customer success strategies around support and value. Supporting customers through every up and down during their compliance journeys. Our customer success team thrive on our support platforms (phone, email and Live chat) so much so that our first-time response resolves are above 70%, and our actual time response to tickets are minutes on emails, seconds on Live chat and calls.

As the old saying goes, ‘Customer is king’. We adopt this principle as our way of work to ensure that we optimise a customer’s compliance journey through efficiencies, allowing customers to drive true impactful transformation in their respective areas, all driving business forward.

With the global reality of COVID-19, shrinking markets, rising unemployment rates and increased competitiveness, it makes business sense to deliver on service now and understand the 76% of customers out there who expect to be understood. Warren Buffett said it best, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

It is 2021, and you managed to implement a data analytics tool – like Mpowered Analytics – alongside your BEE tracking tool. The BEE data is finally unlocked, and you are excited to create all the interactive charts you have been dreaming of. Your reporting is about to become amazing – or so you think!

An unexpected problem confronts you: the blank canvas and world of reporting possibilities have you feeling a little lost and overwhelmed.

What charts do you need, or which data points should you be tracking? What do your stakeholders care about most? What metrics will help you move the needle?

Getting your BEE analytics project off the ground can be surprisingly daunting. I found one principle helped me get going:


Know the difference between exploratory and declarative analytics


There are many different “types” of data analytics, each with its specific objective and approach. The two types of analytics that I find most applicable when kicking off a BEE analytics project are “exploratory” and “declarative” analytics.

Let us take a quick look at them:


Exploratory analytics

Exploratory dashboards are all about searching. They help you ‘mine’ your data, looking for patterns to establish a high-level overview of what is going on in your business.

These are the kind of dashboards that make up your ‘morning paper’. The dashboards are for your consumption, with a strong cup of coffee and an enquiring, scientific mindset.

These dashboards are often ‘noisy’, with many charts side-by-side. They compare BU to BU, looking at various trends across a range of time.



Let’s look at the example above. Here we are looking at Skills Development spend across EAPs over time. We can see a problematic pattern emerging: Spend on African people is declining over time, dropping below the target, while spend on Indian and Coloured people is climbing fast, exceeding the targets vastly. There is probably some ‘oversteer’ to correct a previously weak distribution of spend across EAPs… We have found something actionable while exploring trends!


Declarative analytics (aka reporting)

This type of analytics is what most people tend to think about when we talk about dashboards – presenting data to a set of stakeholders. Declarative dashboards tell a specific story.

Declarative dashboards are the outcome of successfully using exploratory dashboards.

For instance, above we found some potential oversteer where our spend on African people is diving fast, while our spend on Indian people is far exceeding a balanced distribution.

Having found those issues, we can the prepare some declarative analytics that tell an actionable story:



Notice how the headings of charts don’t describe the data (like in exploratory analytics), they describe the actionable insight. We’re translating the findings from our exploration into tangible changes that your stakeholders can understand and immediately and action.

You are ‘declaring’ your findings from the ‘exploration’. And that’s where data analytics makes you a superhero:


Data analytics enable you to apply your expertise to find problems and translate them into actions that will produce positive change.


Why is this important to know?

Understanding the types of analytics will help you focus on the right audience, intent and, therefore, the data points and charts to use going forward.

Here is a little cheat sheet you can use to help you on your analytics journey:


Mpowered has launched a robust product and service that makes your BEE analytics or reporting easier and more meaningful. Head over to our website or book your demo with the team to see just how powerful this BEE reporting tool is!

Author – Gary Greyling, Mpowered’s very own obsessed product developer.

We are all probably tired of the words Covid-19 and pandemic. But we have to come to terms with the fact that these terms are now part of our daily vocabulary, as they are a part of our reality. This situation has brought some level of uncertainty for all of us, including the future of our businesses. It has forced business operations to recalculate forecasted revenues together with the costs that were anticipated to be incurred. Cost-cutting has become a non-negotiable exercise, carried out through different departments, from the core and strategic, to the least supportive functions of operations.

Broad-Based Black Economic Empowerment (B-BBEE) has somehow landed at the bottom of the priority list. Perhaps businesses anticipated that this was going to be put on hold due to the lockdown, or there was concern about whether businesses’ doors would still be open, post-lockdown. The situation that this pandemic has placed all of us in has been overwhelming, and unprecedented. While companies do their level best to keep their heads above water in an almost non-existent economy, some have seen opportunities. However, the overall effect across all industries has not been a positive one.

This where B-BBEE compliance, and software in particular, has become questionable, in terms of its contribution to companies’ sustainability. Most companies have started asking themselves if they should continue with the BEE tool’s expenses, or to kill it altogether.


The misconception

There’s no doubt that some companies believed that there would be an announcement about how the lockdown would affect their BEE scorecards. What was communicated, was the Skills Development Levy (SDL) payment holiday, which was granted to companies for a few months. And somehow, people believed that this would mean that the skills development expenditure target would drastically decrease, since the SDL amounts paid over to the South African Revenue Services (SARS) for those months were R0.00. This proves that people still do not understand what a leviable amount is, and because it is very close to the SDL, they confuse the two. Just in case you are also confused, let me explain it quickly: a leviable amount is the amount on which 1% would be paid over as the SDL to SARS. So, the leviable amount is more or less your total salary bill.

A lot of companies questioned the treatment of the payment holiday periods in terms of planning and implementing the required training for the year. The Department of Trade and Industry confirmed that the payment holiday did not necessarily mean that there are no leviable amounts during those months, unless no salaries were paid to staff. Therefore, although the lockdown affected a lot of things, BEE compliance is still a must.


The importance of BEE tools

Despite the temptation to cut costs, businesses should know that some costs are important when it comes to keeping the business running. BEE software is one such cost, which management can easily think is a ‘can-do-without’ type of expenditure, when it really can have a negative effect on the business’ overall performance. Some companies measure BEE performance because their customers put pressure on them, some do it for the purpose of  government tender requirements, and some do it just for the sake of being good citizens, and wanting to see true transformation across the economic realm. It could be that the prioritisation of BEE depends on the reasons for doing it, so some businesses don’t think twice about continuing to invest in it, while others don’t see the need.

It might seem easy to manage BEE when an entity has already reached its desired target, and only needs to work at maintaining it. But it could be difficult to manage when there are curve balls like the current pandemic that influence how businesses are run. Budgets, forecasts and contingency plans could easily be missed as a result. This was evident when sanitisers and handwashes suddenly became super scarce on shelves when the pandemic initially broke out. Pharmaceutical and chemical companies clearly did not anticipate the drastic jump in revenues when budgeting for the year. That is where the importance of keeping track of business performance comes in.

Companies that chose to pause all BEE-related activities found themselves in a predicament soon as the lockdown levels were eased. For some, it might have worked to their advantage. For example, entities that could easily have jumped the generic revenue threshold could have forfeited the revenues that would have gotten them to that size. In such cases, the BEE targets became less stringent and a little easier to achieve. For other companies though, there was a period of no action, where planned and unplanned training could not take place. These companies fell behind with reaching their set targets for the year. It is in such cases that the importance of B-BBEE tracking stood out.


How can Mpowered tools empower you?

At Mpowered, we offer software tools that allow entities to keep continuous track of (their scores), and self-measure based on transactions that take place throughout the financial period. While verification is an annual process mostly audited on past events, the Mpowered BEEtoolkit allows you to have an idea of what the results might be.

The BEEtoolkit allows you to capture data, which is then translated into information using the back-end calculation processes. It is a user-friendly, web-based system that only requires internet access and a browser. Although optimised for Google Chrome, it works just as well with Microsoft Edge. This tool can calculate your entire B-BBEE scorecard, giving you a breakdown of how each element has been measured against compliance targets. Over and above the generic scorecard, there are a number of other sector charters available in the system. The Toolkit is capable of instantly calculating your gap from the maximum points available for each element indicator, breaking it down in terms of compliance, as a percentage or figure, in either headcount or spend, as well as points.


One of the most interesting features of the BEEtoolkit is the Scenario Planner, where one can view the Gap Analysis. This feature allows entities to have an indication of how far they are from reaching either full points or a specific goal, which can be set in the Target Scorecards section. The Scenario feature can use the budgeted forecasts to see how they will impact the overall scorecard. It can be used to proactively adjust budgets when it comes to B-BBEE expenditure, when what has been allocated is not enough to get the entity to where it wants to be. This exercise can be tremendously helpful in assisting with proper planning, and the implementation of initiatives that lead to a successful BEE scorecard performance.


Now you understand!

Going back to the original question: do you think that BEE tools should be kitted or killed? I am pretty sure that most of you will agree with me when I say that BEE tools play a big role when it comes to B-BBEE compliance and transformation. Those who chose not to continue with embracing the tools could easily have fallen into the, ‘Oh no’ trap, when they realised that it was too late to make up for lost time. This is the reason I personally encourage the use of BEE software, to make sure that everything is on track, while taking unforeseen circumstances into account.


More reads:


Author –  Ofentse Maduse, 25 February 2021

Studies conducted by the University of the Western Cape have found that between 70% and % ( of businesses fail within the first five years. These are scary numbers to look at, and after speaking to professionals in various industries, I wonder what the failure rate is for new graduates when they enter their profession. They all seem to say the same thing: graduates entering the workforce are nowhere ready to work for the companies that hire them.

When you speak to professionals you can understand their frustration at dealing with new graduates who are “know it alls” and feel they should be running the business based on the degree they have obtained. Yes, they might have mastered the theory, but they have no understanding of how to apply it practically, or how to navigate the corporate world.

I have personally seen graduates coming into the workforce thinking that they will be immediately earning a high salary. It is a rude awakening for them when they hear that they would probably need to start in an internship earning nothing more than a stipend, and that their starting salary thereafter will be modest.

This is where mentoring can be so useful for these graduates for them to understand that even if they have great ideas it does not always lead to instant success. Don’t get me wrong, I think their energy and insights are required in a technology driven, social media controlled modern world, and this could be beneficial to any company if it is done right.

So how do we harness the energy and insights offered by the youth, and improve their efficiency and initial experiences in the workplace?

One powerful way is through focused mentorship programmes. I have always seen myself as an educator, and teaching and mentoring has come naturally to me. I wish this could be a calling for more people as I think it mentorships could fundamentally change the experience that our youth have as they enter the workforce. Not only is there a need for this type of guidance for the youth, but also entrepreneurs that are starting a new business.

This is where professions such as Chartered Accountants and attorneys have got it right. Graduates are required to complete a two-year articles programme as they embark on their careers. These graduates know that they are in for long hours and low pay when they start their articles, because everyone has warned them about it.

A form of this should be standard for each industry.

After understanding what your reality will be when you join the workforce you now need a mentor that can help you navigate your new environment. Technology and the use of it comes easy for the Generation Zers. Dealing with people that do not speak their language is not so easy for them and can cause frustration for the entire workforce. Having a proper mentorship programme in place could also lead to less resistance from current workforce and can create clear growth opportunities for your graduates, which will mean more harmony in an organisation. Dare I say it, a win, win for all.

The mentorship concept seems to have gained increasing traction in recent years. Mentorship programmes such as  and the are gaining followers. There is a professional body where mentors can register themselves: Even government has spearheaded various mentorship programmes for young entrepreneurs and work-seekers.


There’s little doubt about the value of mentorship, but many of the professionals who are well-suited to the task are inundated with work, and good mentoring involves a considerable time commitment.

The question we need to ask here is: can we find a group of people with both the time and relevant experience that can guide these youth and entrepreneurs?

The answer is yes: our retired citizens. Retirees have a wealth of experience and knowledge, and are often looking for a purpose. The average retirement age is roughly 60 years (, and with life expectancies increasing in South Africa and globally, retirees often end full-time work with several years of potentially productive years to spare.

From my experience you will see a lot of retired people enjoying the first couple of months of retirement and then getting bored and looking for a challenge. Let them guide our young entrepreneurs while simultaneously generating an income from the experience that they have gathered in their work life. Let us not throw away resources where they are so desperately needed.

As a B-BBEE professional, I can say that an opportunity exists for the Department of Trade, Industry and Competition to add more on mentoring by adding it as an indicator on the Amended Codes of Good Practice.

In this regard, the Construction Sector Charter has led the way. It allows for three points to be scored under Skills Development for an Implementation of an Approved and Verified Mentorship Programme. You can even score an additional bonus points for people that were promoted due to them having completed the learnership programme. This provides clear incentive for companies to drive mentorship programmes, and I feel this should be standard across all charters.

Let’s increase meaningful mentorship programmes across the country by inviting retirees to get involved and structuring incentives for companies to follow suit. I know getting people to commit their precious time to help individuals that are not friends or family does not come natural to human beings, but I promise you that when you see the growth in a person that you are mentoring and they succeed in their endeavors, their success becomes your success.


Author –  Kurt Van Der Westhuizen, 04 December 2020

Working in the BEE industry for the last 10 years I have been asked — by myself and others — what good B-BBEE has ever done for the black people it supposedly aims to serve.



I have seen some individuals benefiting from B-BBEE ownership deals, but it often seems to be the same people.

I have seen people being put into unsuitable management positions simply to benefit the company’s Management Control score.

I have seen black entrepreneurs start small businesses, but many have not grown their companies with the investments they receive, and some have even spent the money on luxury items rather than routing it back into the business.

These all paint a pretty dire picture, but as a black (Coloured) BEE practitioner, I’m here to tell you that there is also a ray of light on this horizon. What is it, you may ask?

Skills Development.

That single element of B-BBEE is where I see a measurable difference being made in the lives of black people in South Africa.

Why is Skills Development so important to me?

I grew up in the gang-ridden, notorious suburb of Mitchells Plain in Cape Town. I had no real opportunity to study full-time straight after high school. In fact, that opportunity only came when I was 30 years old. I paid for my studies out of my own pocket at first but had to take out a loan to complete my course. My degree came coupled with a chunk of debt that I had to pay off, and I still needed to help my family with expenses at the same time. It took me 5 years to pay off the debt.

Despite the financial strain, it was worth it. My life has changed drastically since I accomplished my degree, and I can truly see how important an education was for the improvement of my lifestyle. Without an education I would not be where I am today, and I think everyone should be given a similar opportunity to improve themselves.


How does my experience relate to B-BBEE?

B-BBEE has a mechanism that caters for the Skills Development of employees and the development of unemployed learners. This was further enhanced in the amendments that took effect in 2015 to include non-employed people. With the 2019 amendments, the Codes now also specifically cater for students at higher education institutions. There are several different types of training recognized by the Skills Development scorecard, including learnerships, mandatory training and bursaries. For the purposes of this blog, I will focus on bursaries.

The government is using B-BBEE to drive Skills Development to enhance our current workforce. The people who benefit from this won’t need to be burdened by debt when they study, because the course is funded by companies in South Africa. If I had been given the opportunity of a bursary, I would have been further along in my personal accomplishments rather than first having to pay off the debt I incurred while studying.

Even before bursaries could be claimed under Skills Development, companies were using different methods to pay for bursaries. They would use their Corporate Socio-Investment expenditure to pay for bursaries for qualifying students or for their employee’s children. Some companies even had ownership structures, whereby a trust would own shares in a company and the beneficiaries of the trust would be black students. But now that bursaries are a separate indicator under the Skills Development element, the number of companies providing bursaries to students has increased dramatically. Click here for a list of bursaries that are available in South Africa.


What does this mean for the future?

Thanks to B-BBEE requirements, companies are now implementing development plans for students from school level through to university and into the workforce for scarce and critical skills. This means that companies can now identify the correct people at a young age and develop them towards filling gaps where the need might exist in future. Although this may take a long while, it still promises a better future for students at school than they previously would have had in this current economy. It gives me great assurance that the future of my own child can be planned out at a much earlier stage than I had previously imagined.


What more can be done?

A big problem for universities is that only 22% of students complete their degree in 3 years, and only 39% of students have completed their degree by the fourth year. This puts strain on universities and on the workforce, as people with limited skills are joining the economy.

This is where I think corporate South Africa can and should do more. We do not have enough professionals that mentor students and keep them on track when they are studying. If your company provides bursaries to students, I would recommend that you take ownership of the relationship and provide meaningful mentorship for these students to ensure your development plan targets are met. Let’s work together to help students enter the workplace properly prepared and in a shorter amount of time.


My final word

I have always said, you can take a person’s job, you can take their dignity, but you can’t take their education away. If you go onto LinkedIn, you will see people that started off as cleaners, security guards or petrol attendants who have now achieved their degrees and/or doctorates, and some of them were achieved through the policies that were implemented by B-BBEE.

Let’s get more people educated and hopefully policies like B-BBEE will not be needed in future.



Author –  Kurt Van Der Westhuizen, 03 September 2020

Since the introduction of the B-BBEE Act of 2003, broad-based black economic empowerment is 17 years old and counting. It’s been seventeen years since a commitment was made to honour the infamous line of ‘righting the wrongs of the apartheid era’. Yet, still today, B-BBEE compliance is often referred to as a grudge purchase.



A grudge purchase. Let’s take a moment to break that down. When we look at the definition of the word grudge, Oxford quotes, ‘’a persistent feeling of ill will or resentment resulting from a past insult or injury.’’ I do understand the latter half of the definition: B-BBEE addresses the very real past injuries caused by apartheid; however, it’s the first half that I can’t quite relate to. A persistent feeling depicts a feeling that is ongoing or obstinate.

You would think, that after all this time, people would have understood the intentions behind the B-BBEE Act and Codes of Good Practice. For those who are unfamiliar, these legislations govern the guidelines on how to enforce black economic empowerment in a fair and safe manner. If these legislations are meant to offer a positive resolve, the obvious question arises, how can it contribute to the persistent feeling of ill will or resentment?

When one hears the word apartheid, there is generally an immediately negative connotation. Surely, then, any legislation issued to help alleviate those injustices would be seen in a positive light. Why, then, would the road to strip away the injustice still be paved with feelings of ill will or resentment? Perhaps it’s because, as humans, we have a basic instinct to protect our rights, our rights of freedom, of speech, of any act within our control.



The gratification of a purchase comes when you chose to spend your money on something you may want or need. Once the aspect of choice or control is removed and the purchase is done because you have to, you view that purchase negatively. When that control is taken away — even partially — we harbour a grudge.

Generally, grudge purchases are things such as tyres for your car, a roof for your home, a mattress to sleep on, etc. It is a product or service that needs to be maintained in order for you to extract a benefit from it. The same applies to the world of B-BBEE. In order for your business to extract the benefit of B-BBEE (such as securing new business opportunities) you need to obtain a good B-BBEE compliance level.

Attaining a good level, however, requires a serious commitment from companies. There are monetary and non-monetary implications, and sometimes it can be downright expensive.

But just as the car needs new tyres in order to maintain safety on the road, so too does B-BBEE need to be adhered to and maintained in order to truly transform the country.

While I don’t mean to be insensitive to people’s feelings, I do think that we need to get over the grudge that comes along with B-BBEE purchases. I mean, what positive outcome can arise from the persistent feeling of ill will and resentment?

For those of you struggling with this sentiment, I offer the following tip for dealing with grudge purchases: focus on the outcome rather than the process.

We will find more comfort when we understand that a truly transformed country means great things for every single South African. Every time your company hires a black person, every black skills development intervention, every purchase from a B-BBEE compliant supplier, every contribution made towards a black-owned company or towards the black community, will be a step in the right direction.

So I say grudge schmudge. Don’t let the negativity of the apartheid era seep into what can be a beautiful transformation for an evolving country.



Yes, there are many instances of corruption in government and public entities that all leave a bad taste in our mouths. Somehow these are more often than not tied into some B-BBEE principle such as preferential procurement. Despite that, I think we should subscribe to a more positive mindset and focus on each black life that is changed for the better. If we are all truly honest with ourselves and each other, we will acknowledge the underlying racism that continues to plague our world.

I sincerely hope I will not be misunderstood here. I am not saying that I don’t understand the feelings of grudge, I am asking that as you read this, you open your mind to changing the way you think and feel about B-BBEE.

Look at the Covid-19 pandemic. In order to face a virus that threatens the very existence of our livelihoods, we as a nation have come and continue to stay together. We encourage and support each other, in the spirit of compassion. Why then can we not do the same when it comes to B-BBEE? Why can’t we see transformation for what it is, which is a change, to enhance or be better.

As each South African accepts the beauty and burdens that others carry, we will start to embrace the changes that make us a rainbow nation.

So the next time you hear someone say that B-BBEE is a grudge purchase, remind them of how helpful or worthy the task at hand could be. Remind them that each step we take in the right direction is one step closer to something more beautiful.


Author –  Mitishka Ramdhani, 11 August 2020

Last night after kicking off my shoes and while getting ready to hide under a blanket on my favorite sleeper couch, I started browsing through some unread WhatsApp group posts from the day. I always leave the naughty groups for last and there, on my Royal Enfield riders club group, the source of much laughter – albeit rarely wholesome – I stumbled on this joke that I’m sure many of you have also seen by now. It says: “So in retrospect, in 2015, not a single person got the answer right to “Where do you see yourself in 5 years from now?”



I found this funny and it made me smile. Admittedly, it would have been funnier if I had a glass of red wine in my belly with another one in hand – a memory that is distant but never forgotten. But still, it made me think of how getting into our comfort zones should not let us get comfortable. Circumstances can change in the blink of an eye and we should always aim to grow and develop and prepare for those tough times, even though we don’t see them through the haze of perceived certainty.


No one would have been able to foresee the COVID-19 crisis unless they were a Hogwarts Wizard with a crystal ball. No one would have known that some businesses would have to close their doors and lay off their staff and that those of us that are able to, would have to work from home while being full-time parents to kids that are not allowed (imagine that) to go to school. And sadly, no one would have guessed that so many people would die. Let me ask this question though. Let’s say we all knew that this would happen. Let’s say we all knew this plague would hit our land – what would we have done differently to prepare for the inconceivable worst?


Well, it’s too late for preparation now. We are on the proverbial ocean in the proverbial storm. We can see some smaller islands in the form of the less stringent Levels 3 and 2 lockdown restrictions, leading to the promised land of Level 1. The problem, however, is that there’s still a lot of water to cross and a lot of storms to weather and we can really only focus on a day at a time. Then there is also the scary thought of when we get to the mainland, Level 1, to what extent will this virus take hold amongst our people and what will the long-term effects be? There is so much uncertainty.



Here at Mpowered, we have had to go back to basics and remind ourselves to appreciate the importance of cash flow forecasting. As much as we can’t see too far ahead, we have realised the need to plot and plan our course of action by making use of the information at hand and ask ourselves the question of how these current events will influence our business. Forecasting should not be confused with budgeting. At the beginning of the financial year, most of us signed off on our annual strategic budgets which we spent hours developing while going to town on lots of coffee and biscuits. These budgets are very irrelevant now and this undoubtedly supports the crowd that advocates the uselessness of budgets. Budgets are important, but forecasting is even more important. defines forecasting as follows: “A planning tool that helps management in its attempts to cope with the uncertainty of the future, relying mainly on data from the past and present and analysis of trends.” The dictionary says that forecasting starts with certain assumptions based on the management’s experience, knowledge, and judgment. These estimates are projected into the coming months or years.

Since any error in the assumptions will result in a similar or magnified error in forecasting, “the technique of sensitivity analysis is used which assigns a range of values to the uncertain factors (variables).” Read more:


Using the information we have at hand: our cash balance, monthly overheads, cash commitments, upcoming subscription renewals, and sales trends, we have been able to build a forecast that gives us an idea of if and when we will run out of money. This gave us insights into which expenses we should trim, and which suppliers we can speak with in order to arrange some reduced repayments.

Our forecast assumes a certain amount of new sales and contract renewals. We’ve had to apply sensitivity analysis to these assumptions to get a feel for which other expenses we need to cut drastically in order to save the ship, should we not meet our customer retention targets. Even though we have this forecast at hand, there is no guarantee that it is accurate and that we will be okay. That said, I do sleep much better at night knowing that we are using this tool and that it should give us the warning signs before it is too late.



Forecasting: a few tips to get ’er done

Forecasting does not have to be done on a fancy magical excel template, or with expensive cloud software. Your choice of the forecast will depend on the size and complexity of your business. There are many tools out there to assist you in the process, and if you, like me, are one of those people who enjoy coming up with your own solutions, then building your own could be quite fun. Just don’t get too busy building it and not busy enough forecasting. The point is to have a forecast that is well thought out and live – updated at least once a week.

Forecasting should not be done in isolation by the finance person or the entrepreneur. All role players, including the various department heads, should be involved in the process. You would be surprised at the valuable contribution that can be made by other team members. We have regular meetings with our team where everyone provides input and where our cash estimations are debated. This adds a lot of value and it removes the pressure from me as the accountant, to formulate all assumptions. Communication is key. Should matters turn for the worse in your business and you have to start speaking about the uncomfortable topic of salary reductions (if you haven’t been forced to do so already), a world of difference can be made by engaging with your employees on their ideas to reduce cost and encouraging them to volunteer reductions in their salaries.

Some employees could afford a 20% to 30% in salary reduction, while others can’t. Weighing a larger portion of salary cut to those that can afford it will alleviate pressure from those that can’t, and still assist management in reaching the goal of reducing their  largest overhead significantly. Once business and cash flow return to normal, those heroes could be rewarded through a bonus, or through the business refunding the salaries they sacrificed or both.



In conclusion, I would like to circle back to my previous hypothetical question – if we knew this crisis would happen, what would we have done differently? Here are some parting thoughts that if applied, could assist you in being more prepared for those unforeseen crises:


Build an emergency cash fund: 

Many businesses are in trouble today due to a lack of cash reserves. Cash is king. It is important to shorten the cash cycle in your business as much as possible. This means, don’t overstock your shelves if you keep inventory. Chase your debtors more and shorten your collection days. Pay your suppliers on time — they also need to survive. And stay away from debt – debt is expensive in our country and we easily get attracted by the desire to have the best of everything even when we can’t afford it. No, I say!  – Read The Millionaire next door by William D Danko and Thomas J Stanley. 


Management accounts: 

Your accounting is vitally important. It ensures effective financial management and it enables management decision making. Without accurate and up to date management accounts, you simply can’t manage your business. Your management accounts should include an income statement, balance sheet, and cash flow statement. You should also include a forecasted income statement, balance sheet, and cash flow statement. You should know the KPI’s and business ratios applicable to your industry and measure them monthly, keeping an eye on where they will be in the future. Your management accounts should be available within the first 7-10 days of the month. You simply can’t afford to wait 15 or 20 days for these numbers.


Remote working:

Set your accounting, payroll, and admin processes up in such a way that you can work from anywhere in the world. Cloud accounting and software is no longer a new fad. In fact, if you’re still reliant on servers and need to be in the office to get work done, then you simply won’t be able to adapt to forced change. At Mpowered we make use of cloud accounting and payroll software as well as Google Drive and OneDrive for all our filing. Except for my notebook and pen, I run a totally paperless system, and this has proved on many occasions to be a lifesaver, including now.


Become a compliant business:

Our government has done a great job in formulating strategies to assist small businesses through this time. These strategies include the UIF TERS program, The COVID-19 SMME Relief fund, and PAYE, SDL, and Provisional Tax deferments. The catch is that these programs are only available to businesses who are compliant with UIF (For the UIF TERS Program) and SARS (For the PAYE, SDL, and TAX deferrals, and of course, the SMME Relief fund). So, ensuring that your business complies fully with tax and governance legislation will open up channels for financial assistance in future crises.


Run an ethical business:

Ethical business practice is the practice of treating your stakeholders well and with respect. At the very least these include your employees, customers, suppliers, regulatory authorities, and the environment. There is a very direct relationship between ethical business and sustainable profit creation.