Smart SMEs will start their Black Friday 2025 planning now

As South Africa's retail landscape gears up for the highly anticipated Black Friday sales in November, a critical message is emerging from the frontlines of small and medium enterprises (SMEs): this peak shopping moment should not solely be viewed as a surge in sales but as an essential opportunity to bolster resilience and unlock new growth avenues.

Lula, a leading SME services provider, has highlighted the unique challenges and significant prospects that come with this significant trading period, which anticipates billions in transactions across online and in-store platforms.

Garth Rossiter, Chief Risk Officer at Lula, said that while Black Friday represents a remarkable opportunity for businesses to showcase their offerings, it also serves as a rigorous stress test for operational efficiency and cash management, particularly for SMEs often eclipsed by their larger counterparts.

“Black Friday has become a stress test for businesses generally and small businesses in particular. It is a massive opportunity for businesses to make their mark, but has the ability to highlight both business strengths and weaknesses, from cash flow to cyber resilience. Business owners should carefully consider acting on any gaps they see to help them grow and expand their business prospects,” Rossiter said.

Identifying hidden gaps

As the countdown to Black Friday continues, SMEs must be vigilant in identifying hidden vulnerabilities that could hinder their progress.

Key areas of concern include:

• Cash flow pressure: A surge in sales often accompanies the day, but with suppliers demanding upfront payments and customer receipts taking time, SMEs may feel financially squeezed right when they need the most liquidity.
• Cybersecurity risks: The increased online activity also brings higher risks of fraud, phishing scams, and data breaches, vulnerabilities that many small businesses are still ill-equipped to handle.
• Operational strain: Businesses must effectively manage stock levels, especially when sourcing supplies internationally. Inadequate inventory can lead to missed sales opportunities, while overstock can tie up precious cash for longer than anticipated.

Partnering for success

Choosing the right banking and funding partner is crucial for SMEs as they navigate the complexities of the festive retail season.

The ideal partner should provide:

• Ease of use: Simple onboarding processes and powerful financial management tools that improve access to business funding.
• Fast, flexible funding: Approvals in under 24 hours to facilitate necessary stocking, marketing inputs, and smooth operational flow.
• Smart repayment solutions: Flexible terms that align with seasonal cycles, thus reducing fiscal pressures during peak trading times.

Strategic advice for Black Friday

To navigate through this high-pressure environment, SMEs should consider the following strategies:

• Invest in cyber resilience: Implement security measures such as two-factor authentication and regularly update payment systems to educate staff on prevalent scams.
• Bundle, don’t just discount: Instead of purely discounting, businesses should link complementary products to stimulate sales while protecting their margins.
• Plan liquidity early: Don’t wait for cash shortages to arise; securing funding should take place before customer demand peaks.
• Think long term: Use Black Friday as a stepping stone for growth into the festive season, aiming to convert fleeting customer interest into lasting relationships.

Rossiter added, “The small businesses that normally win on Black Friday aren’t the ones offering just the deepest discounts. They’re the ones that planned smartly, managed risk, and positioned themselves to convert seasonal demand into sustainable growth. The biggest benefit from Black Friday for small businesses is customer acquisition and brand awareness, creating an opportunity to expand their clientele beyond their usual market.”

BUSINESS REPORT