Ed Richardson SMALL AND medium businesses (SMEs) are most at risk from power cuts and need to plan for them, according to research conducted by the Gordon Institute of Business Science (Gibs) on the effect of the Cape Town electricity crisis on SMEs. Writing in Business Report, researchers Albert Wöcke and Alison von Ketelhodt said they found that “SMEs suffered substantial damage due to the loss of revenue and customers during downtime, the failure to complete contracts on time, an increase in overheads and an unanticipated loss of productivity”. In their survey after the Cape Town blackouts in 2005 and 2006, the researchers found that 89% of SMEs were dependent on a stable supply of electricity while 69% were severely affected by the outages. Eighty per cent lost business. Examples of losses include R1 million at an old age home due to equipment failure. A bed and breakfast establishment faced a walkout by German tourists, a fruit exporter lost R350 000 when cold rooms failed, and software developers replaced computers and lost production due to power failures at critical times. A small manufacturing operation lost international clients on a failure to meet deadlines, with a loss of R650 000. Another food supplier had to install additional generators at a cost of R100 000.
