The development and growth of SMEs is essential for the alleviation of the current unemployment crisis in South Africa, which is accepted worldwide as a concept. However, knowing that something is the right thing to do and actually doing it are two very different notions, especially in the corporate world.
Although most companies start with profit making in mind, it is important to remember where one started and, once a success has been made of your enterprise, to assist other smaller businesses as much as possible.
When our company started in 2001, my partners and I had no start-up capital and had to take a R150 000 loan on 14 days repayment terms just to purchase stock. As a small business, it was greatly assisted by the suppliers that gave extended terms for payment, marketing assistance through the supply of signage, assistance was given with shopfitting, product training and back-up support.
Yet, despite the critical importance of small businesses, many companies remain 'in it for themselves' - whether it be suppliers not allowing small businesses terms for payment or clients not paying for work delivered - this is a mind-set that needs to change.
However, although there is a need for all businesses to assist in small business development, a balance is critical. One needs to be aware of the fact that, in certain cases, giving too much leniency or assistance can put one's own business at risk. There needs to be a balance between giving back by helping small businesses in their growth and protecting your own business' interests - operating at the middle of the spectrum and not at either end is essential.
Some businesses may in fact actually be negatively affecting the growth of small businesses - whether knowingly or unknowingly. In the IT industry, for example, our company has distributors that it purchases products from in order to resell to the end users in its target market. However, some time ago, these distributors sold directly to the target market, cutting our company out of the loop and negatively affecting business in a severe way.
Helping hands needed
When considering whether or not small business development is of value, perhaps it is worth pointing out the difficult economic environment all business owners face. Although government is passionate about small business development, non-BEE companies are often left out of the loop when it comes to benefitting from this passion. In addition to this, banks are quick to penalise small companies, pulling the rug out from under their feet when they need the banks' assistance the most and, in light of the current economic crisis, this is crippling.
Had those companies not assisted us in the developing stage, who knows where the company would be today; with the limited help supplied by government and the lack of assistance from the banks, it is only business itself that can help small businesses in their growth.
The benefits of assisting small businesses are endless. Aside from the possible enterprise development points one can gain from such activity, being a part of assisting another person in making a success of their business and in turn them being able to create employment opportunities is benefit enough.
In addition, through assisting small businesses, close relationships can be built based on mutual trust and respect, resulting in a more amicable working environment for all involved. It is also, in many cases, much easier to work with small businesses as this usually involves a more personal relationship with the business, where one is often dealing with the managing director or CEO of the company. There is also less corporate red tape to navigate through.
Ways to empower
There are many ways in which to empower small businesses. Perhaps the most obvious form of empowerment is in the financial realm. For example, when big corporate suppliers provide small companies with price assistance when these small companies purchase goods from them for re-sale, this allows the small companies to make a better profit margin on the resale of those goods. Although this does not necessarily apply largely in the IT industry, mentorship can also be an invaluable tool in small business empowerment.
As a grateful, once small business, we consider small business development a necessity and it has become part of the company ethos. We endeavour to assist small businesses through donations, such as supplying computer equipment to small start-up businesses free of charge and by offering add on services, such as free delivery. We take on all clients, without having a preferential customer policy in place.
The benefits which the company endeavours to provide all that it works with, especially small businesses, are a personal touch, a strong focus on service delivery, flexible terms and conditions and personal relationships while operating under the motto of 'small enough to care, big enough to deliver'. If all businesses could provide this and other forms of assistance to small businesses, together a better economy and the reduction of unemployment could be achieved.
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