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Assist and mentor an SMME to gain BBBEE points

As South Africa looks to recover from the devastating effects Covid-19 has had on the economy, the government's economic turnaround plan involves using transformation to pivot the country's fiscal growth, says transformation specialist, Roxanne Da Mata Gonçalves from Strata-g Labour Solutions.
Roxanne Da Mata Gonçalves
Roxanne Da Mata Gonçalves

“A great deal of assistance will go towards small enterprises that are predominantly black-owned and to Small to Medium and Micro Enterprises (SMMEs) that require financial support. However, where the previous focus was on training and absorbing candidates into the work system by sponsoring organisations to train people, the latest push will be to create sustainable SMMEs through utilising an organisation’s Enterprise Supplier Development (ESD) plan,” explains Da Mata Gonçalves.

She says rather than training candidates for employment alone, a greater emphasis is being placed on sponsor organisations moving towards creating reliable suppliers that will feed into their supply chain, thereby empowering them to become the next generation of employers. Organisations need to identify candidates that have the capabilities to become self-sustaining entities. These candidates must be trainable and given a skill set that is scalable.

Organisations need to identify entities that have an appetite to work. The thinking behind this new approach is that when an SMME develops and becomes stable, they not only become a supplier to their sponsor organisation, but also an employer in the community in which they operate, thus adding worth to the economic value chain.
According to the transformation scorecard, ESD traditionally represents a modest 15 points (5 points for Enterprise Development and 10 for Supplier Development). However, with an innovative strategy, ESD can encompass the practice of Preferential Procurement at a weighting of a total of 30 points of a possible 114 points on the scorecard (excluding bonus points).

This means approximately 26% share of the points are achievable through a holistic and effective ESD implementation strategy, which incorporates the correct selection, support and engagement program for the creation of suppliers from which the organisation procures products and or services.

Practically, organisations can give individual SMMEs support in the form of teaching them the inside mechanics of being an entrepreneur; how to negotiate contracts; and how to deliver quality service that creates the need for repeat service.

“Operationally, as a large company supporting a small black business, you already have access to resources to do bookkeeping, for instance. Use that opportunity to perform the bookkeeping function for the SMME because organisations are already paying for them, this merely becomes an opportunity for enhanced recognition toward the BBBEE scorecard. Don’t stop the project when the financial year ends, graduate that SMME into a contributing supplier and continue to utilise their services to improve the overall procurement scorecard because for every R100 spent with these suppliers, the organisation can recognize R135,” explains Da Mata Gonçalves.

The higher the Broad-Based Black Economic Empowerment (BBBEE) points of a supplier on a procurement list, the more recognition the sponsoring company gets on its scorecard for free.
“Transformation goes beyond just watching the scorecard and paying the pennies forward. There must be some emotional investment and time spent with the SMME in order to grow it. It is easy to throw money at the issue, but what money does not provide, is access to networks and the necessary experience most SMMEs so desperately need. The ability to sell and deliver in line with what their customers require.

“The whole scorecard should have a short, medium- and long-term strategy. With the long-term strategy focusing on getting SMMEs to levels where they are sustainable. And for SMMES, they need to change their mindset from being caught up on focusing solely on acquiring capital through ESD programmes, to seeking which skill sets a sponsoring organisation can offer them to generate money, as well as long-term sustainability,” concludes Da Mata Gonçalves.

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