Page 24 - KZN Business Sense 9.4 - Shadrach Karien (Cover)

SMES HOLD THE KEY TO SOUTH AFRICA’S

ECONOMIC RECOVERY

David White, CEO through direct employment or companies in South Africa.
DRG from within their own These organisations provide
businesses. essential encouragement and
support to SMEs entering the
MEs, Although B-BBEE is purely market, and guidance to small
through voluntary, there is significant and medium enterprises going
Seffective engagement from larger through the many challenges
encouragement organisations to align as closely of internal growth. In South
and opportunity as possible in meeting the Africa, there is little difference in
from larger Act’s economic transformation reporting responsibility of a large
organisations commitments. The procurement organisation and that of a small
and support element encourages larger enterprise. Without the internal
and guidance organisations to contribute 3% of competencies large organisations
from business their net profit after tax (NPAT) have at their fingertips, smaller
mentoring towards enterprise and supplier enterprises need to draw guidance
companies, development initiatives. The socio- and support either from their
hold the key economic element encourages larger clients, or directly from
to South larger organisations to contribute capable service suppliers. Failing
Africa’s growth, development, 1% of their NPAT to social which, they set themselves up to
and economic recovery. upliftment initiatives, where an face the wrath from authorities A Professional Approach deeply the challenges of growing
It is widely agreed that SMEs outcome of creating opportunity for their transgressions. BusinessFit SA’s approach the South African SME sector,
hold the key to South Africa’s for individuals and small entities to through its 5 Stage Quality and has implemented significant
economic recovery, and for good access to the economy is achieved. Good Corporate Citizens Assurance Process, and policy through the B-BBEE Act to
reason. SMEs create employment These two elements on the Larger organisations too Corrective Action/Sustainability help drive skills transfer and SME
in diverse sectors, across all B-BBEE scorecard help to create demand compliance adherence Report is gaining popularity development and engagement
functional disciplines, and at all significant transformation in their engagement with SMEs. as a professional approach to opportunities. Further, business
skills levels. SMEs contribute momentum for both formal Their own B-BBEE scorecard ensuring enterprise and supplier mentoring companies like
significantly to the country’s gross and informal sector individuals requires that they engage with development initiatives result BusinessFit, ActionCOACH, and
domestic product (GDP) and their and SMEs. They help to lay properly constituted enterprises, in the desired outcome of others, are working closely with
ongoing success and sustainability the platform for the transfer of that meet legislative requirements more competent and capable large organisations and their
create meaningful employment. skills, and to create opportunity as stated in the Company’s entrepreneurs and business suppliers to help create ongoing
They are notably helping to reduce for individuals and SMEs Act, and are regarded as good leaders. The approach assists in successful and sustainable supplier
some of the extreme economic to enter the economy and corporate citizens. If an engaged ensuring enterprises have robust relationships – to result in the
inequality we experience in South contribute towards South enterprise for example does functional frameworks. These growth and development of the
Africa. Larger organisations Africa’s growth, advancement, not have a B-BBEE scorecard include: South African SME sector and
providing support through skills and economic recovery. or affidavit, then the engaging ■ Clearly structured and overall economy. These actions are
transfer and engagement are organisation will not be able to implemented business strategies resulting in:
catalysts in creating opportunity The B-BBEE Act, and in allocate B-BBEE points on their ■ Transfer of essential business
for SMEs to succeed. particular the procurement and own scorecard. There are also ■ Defined measurements and and financial skills
socio-economic development outcome intentions ■ Creation of employment
Procurement and Socio- elements, create significant means other areas of strict compliance, ■ Engaged staff members who ■ Giving more people access to
where joint and several liability is
Economic Development for SMEs to receive support and apportioned to both the company understand the needs of the
funding. Anyone who has started business, and how they the economy
The procurement and socio- and service supplier where personally contribute towards ■ Narrowing income differential
economic development elements a business themselves, or has compliance is not evident. the enterprise’s success and ■ Growing the country’s GDP
grown an enterprise to the next
within the South African sustainability
Building a vibrant and inclusive
Broad-Based Black Economic level, knows well that funding SMEs, therefore, as starting ■ economy
is not the only requirement in
Empowerment Act (B-BBEE) points on their journey toward ■ High quality assurance and
are focused specifically on their enterprise’s advancement success and sustainability, need to quality controls in their The success formula being
forward. They know that they
supporting skills transfer and ensure that they: enterprise’s production and the combination of public
creating opportunity for SMEs need to understand the internal ■ Meet governance and service delivery sector transformation policy,
and individuals within two requirements of their business, sustainability objectives Large organisations like Standard private sector commitment
broad categories. as well as be able to interpret and ■ Are productive meeting both Bank understand that their and engagement through large
adapt to the changing economy
■ The procurement element and its many challenging financial and operational contribution to transformation in organisations, business mentoring
objectives
encourages larger organisations economic influences. South Africa rests in their ability companies, and SME leaders,
to procure at least 30% of their ■ Meet compliance and legitimacy to uplift the SME community, wishing to be given an opportunity
goods and services from SMEs Ecosystem Support requirements and as such have teamed up with to bring their innovations,
whose enterprise revenue is less Unlike larger organisations, ■ Manage internal and external enterprises like BusinessFit SA passions, and excellence into the
than R 50 million per year. This SMEs seldom have access to risk adequately and DRG in providing business formal and informal sectors of the
is broken down as follows: internal resources to help them ■ Have ethical and effective sustainability conferences within South African economy. 
– 15% from SMEs with a total interpret influencing market leadership and an engaged KwaZulu-Natal.
annual revenue of up to R10 conditions, or to create a local enterprise culture The Open Business Council, For more information contact DRG
million; and and international digital presence Enterprise and supplier which also recognises their Outsourcing, DRG Siyaya, and
BusinessFit SA
– 15% from SMEs with an for their unique service offering. development, a subsection of unique ability to contribute
annual revenue of between Hence the need for ecosystem the procurement element on the to SME development in South Contact David White,
R10 million and support to help SMEs draw in B-BBEE scorecard, when used Africa, recently partnered with T: +27 (0)31 767 0625
– R 50 million. essential knowledge, gain business effectively, provides support BusinessFit SA. The aim was to E: david@drg.co.za
process understanding, and ensure support SMEs in creating effective W: www.drg.co.za
■ The socio-economic adequate integrated reporting and opportunity for larger digital footprints; to assist in
development element systems and policies that maintain organisations to generate the ensuring that they have the means
encourages larger organisations their ongoing high-quality confidence they need when to be represented professionally in
| to support initiatives where the reporting and service delivery, to engaging with SMEs. Business local and international markets.
outcome of their contributions support the enterprise’s growth mentoring companies often
results in the beneficiaries and long-term sustainability. work side by side with larger The Success Formula
developing skills and receiving organisations to upskill and help The South African Department of
opportunity that ultimately There are many wonderful develop competent and sustainable Trade and Industry has considered
give them access to the economy value adding business mentoring service providers.

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