Husband-and-wife team, Hendrik and Wendy Coetsee, own six Kauai stores in the Western Cape. The outlets, three in high street malls and three in Virgin Active gyms, jointly employ 69 people.
Business had been good until 15 March, when it was “like a handbrake was pulled up”, remembers Coetsee. “As people became aware of the threat of Covid-19, we lost two-thirds of our usual sales in the gyms, and in the malls business slowed down by half.” It was 12 days before lockdown, but the downturn had already started.
A chartered accountant by training, Coetsee knew that cash flow was going to make or break his business. “It was a bronco we had to master,” he says. Daily forecasts were done in an attempt to understand how deep the hole was likely to get and what could be done. “Our assumptions were changing all the time as new and more information came in.”
In addition to figuring out how to pay the suppliers for two months’ worth of purchases without cash coming through the tills, the Coetsees were also in constant contact with their landlords. “Working with them and understanding their responses were part of our response.”
And then there were the employees. The couple had no way of knowing how long lockdown would last and did not want to take hasty decisions. “Every day was about making the best decisions. Figuring out the next step and which lever to pull to solve the cash flow problem was literally a daily activity.”
Having set the goal to make sure they would still have a business in six months’ time, the Coetsees set about accessing relief funds. “I was probably one of the first Sukuma Fund applicants,” says Coetsee. “I found the process quick and easy. Because the business’ financials were up to date and it was relatively simple to tweak our forecasts, we could submit all the required information immediately.”
The business received R975 000 in a Sukuma Fund soft loan and R25 000 in the form of a grant. The first tranche of R225 000 was paid on signature, within days of month end.
The Sukuma Fund, combined with government’s UIF/TERS funding, meant that Coetsee’s staff all earned at least 75% of their normal wages throughout lockdown. “ The funding made it possible for us to retain the team we have built,” says Coetsee. This team is now again serving healthy fast food to customers following the opening of the three retail outlets, as provided for under level 3 conditions.