The negative perceptions that it was essential to use 'frontmen' and give away shares in a business to win business, especially government tenders, are two of the myths that have been largely dispelled.
Ravi Govender, head of Small Enterprises at Standard Bank, says recent changes to B-BBEE legislation have given way to a programme that can be of value to those who have an insight to B-BBEE and its implementation. The purpose of the legislation, however, remains to assist with fast-tracking previously disadvantaged people into the economy, so that they can contribute to national economic growth.
Because of the importance of B-BBEE and its potential to assist small business growth, the topic was selected as a subject for the series of BizVideos currently running on Standard Bank's BizConnect website. The videos can be accessed by logging on to www.standardbank.co.za/bizconnect from March to May 2014.
"The fact is that small companies have been given more opportunity to box above their weight category and compete on an equal footing with larger companies that may have more employees or resources. This is because of the threshold changes applied to small business and introduced through the new legislation," says Govender.
These changes include:
Essentially, small businesses have been given an opportunity to grow their businesses significantly by automatically being granted certificates of compliance with B-BBEE.
"If a business is now operating near the R5-million threshold, it can continue to do so knowing that B-BBEE will only become a factor when the R10-million annual turnover mark is reached. All that is needed when a B-BBEE certificate is required is that the annual turnover is certified by an accountant, or that a statement to this effect is made before a Commissioner of Oaths.
"It is unlikely that a business will grow from R5-million to R10-million in turnover within the short space of a year. This means small businesses that are growing will have two or three years in which to strategise and introduce a B-BBEE compliance plan.
"The company will be growing, so the introduction of a planned B-BBEE initiative will enable the business to grow to the next level. Higher up the growth ladder the requirements have been simplified and eased, so the same will apply to these businesses," says Govender.
For companies exceeding the R10-million turnover threshold planning will have to be devoted to five key operational areas. These are:
At first glance, these may seem onerous. There are, however, specialists who can advise on what is required and how changes can be introduced to the business.
"The emphasis should be on using the time allowed for growth to develop a B-BBEE road map so that any transition undertaken is beneficial to the growth of the company. Planning for B-BBEE should never be underestimated and should be seen as a tool that can increase employment opportunities and boost business growth," says Govender.
