Author: Marillia Veldkornet

URGENT

Small, Medium and Micro Enterprises (SMMEs) situated in the Garden Route are invited to register and participate in the Leap Entrepreneurial Development / ABSA Accelerator Programme.

Criteria – must be in business for more than two years with a turnover of more than R 500 000.

Introduction – Government has prioritised entrepreneurship and the advancement of Small, Medium and Micro-sized Enterprises (SMMEs) as the catalyst to achieving economic growth and development. With the assistance of other government departments and institutions, the Department of Trade and Industry takes the lead in implementing SMME-related policies, to ensure that adequate financial and non-financial assistance is provided to the sector, for its long-term prosperity and that of the country as a whole.

The importance of SMMEs on the South African Economy – According to the 2015 World Bank’s Global Economic Prospects, six of the fastest growing economies in the world are in Africa: Ethiopia, Tanzania, Mozambique, the Republic of the Congo, Rwanda and Cote d’Ivoire. Whilst South Africa offers a business-friendly environment, out of 189 economies listed by the World Bank in terms of the ease of doing business, it has slipped six places – from 37th (2014) to 43rd (2015).

According to Gideon Nieman in his book Small Business Management: A South African Approach (2006), SMMEs in South Africa have become an important focus for policy makers because:

• The labour-absorptive capacity of the small business sector is higher than that of other size classes
• The average capital cost of a job created in the SMME sector is lower than in the big business sector
• They allow for more competitive markets
• They can adapt more rapidly than larger organisations to changing preferences and trends
• They often use local resources
• They provide opportunities for aspiring entrepreneurs, especially those who are unemployed, under-employed or retrenched
• Workers at the smaller end of the scale often require limited or no skills or training; they learn on the job
• Subcontracting by large enterprises to SMMEs lends fertility to production processes
• They play a vital role in technical and other innovations

SMMEs are expected to function as a driving force in South Africa’s social and economic stability. The country is experiencing an expansion in the middle income segment with its increasing access to buying power. Consequently there have been mounting pressures on existing infrastructure such as healthcare, security systems, services, supply of electricity, clean water and recycling, all of which offer opportunities for SMMEs to service them as well as markets around the globe. The growth of the Internet offers prospects for small companies to grow through becoming e-commerce enabled – and geographical boundaries have therefore become porous.

Government policy such as that of Broad-Based Black Economic Empowerment, particularly its Enterprise or Supplier Development pillars, can facilitate the realisation of increased economic growth coupled with appropriate tax policy to result in SMMEs making a considerable and important difference to the South African economy. The small businesses sector in South Africa does already make a significant contribution to the gross domestic product (GDP).

According to South Africa Web, small businesses contribute 30% to South Africa’s GDP – which is less than small businesses in developed countries that contribute around 50% to the GDP and those in Asia that contribute around 40%. With regard to employment, SMMEs in South Africa absorb about 70% to 80% of the employed population and contribute less than 4% to export earnings, leaving a large margin for growth.

The government, particularly with the championing by the Ministry of Small Business Development, Minister Lindiwe Zulu, has committed to a high level of support for small business through a mix of tax concessions, grants and free advisory services.

“We live in a time where jobs are no longer secure or abundant. We are increasingly called upon to be self-reliant, to take risks and initiatives and to generate our own income,” says Bev Moodie in her book, Entrepreneurship Made Easy (2000). Thus entrepreneurial activity has to become the cornerstone of economic growth in South
Africa and can be an important source of net job creation which the country sorely needs.

What impedes business growth?
• Burdensome regulations
• Lack of skills
• Local economic conditions
• Cost of labour
• Lack of finance
• Municipal cost & services
• Increased competition

In their 2015 SME growth index headline results, the business environment specialists SBP, who conduct an extensive annual study, analyse the challenges small businesses face in South Africa. They survey 500 established companies employing less than 50 people in manufacturing, business services and tourism. The 2015 survey listed the following factors that are constraining growth and which need to be addressed: burdensome regulations (40%), lack of skills (38%), local economic conditions (37%) and the cost of labour (32%).
This important research maps the way forward in terms of issues that need to be addressed in order for this crucial sector to burgeon and grow the economy so that South Africa joins the list of the fastest growing economies in the world.

Accelerator Programme Objectives

The Absa Accelerator Programme will be versatile with multiple delivery styles that are all suited to provide an interactive experience which covers the key business management elements of your business. These may include: (1) Financial management/Financial literacy, (2) Costing and pricing, (3) Sales and marketing, (4) Legal and compliance requirements for SMEs and Business systemisation.

Programme Structure

The programme was designed and delivered by experts and it has been extensively peer reviewed. It is mindful of the time pressures faced by SMEs and therefore the delivery method offers flexibility for you to participate at your own pace without compromising the quality of the outcomes. It will provide a structured, interactive experience which covers key elements of your business, supported by tools and resources for easy application. Also key is that you will be able to share experiences and form strong networks with like-minded entrepreneurs, building useful connections for your business.

COURSE OUTLINE

Purpose of Module 1: Marketing
This Unit Standard is aimed at learners who wish to develop an understanding of the way market mechanisms operate in a new venture. It will also address the economic realities of South Africa and the role new ventures play in job creation.

Outcomes
On achieving this unit standard, the Learner will be able to:
✓ Explain the free market system in terms of perfect and imperfect competitive markets.
✓ Discuss and illustrate the interaction of demand and supply in price determination
✓ Identify and discuss the factors that drive economic activity.
✓ Describe the development and significance of markets with particular reference to South Africa.

Purpose of Module 2: Costing &Pricing
This Unit Standard is for learners who want to be competent in applying the principles of costing and pricing in determining profit margins for a new venture. The Unit Standard will assist the learner to determine the future profitability by establishing whether the costs involved will generate sufficient profit to justify the launching of the new venture.

Outcomes
On achieving this unit standard, the Learner will be able to:
✓ Identify and apply the criteria of a price setting policy for a new venture
✓ Identify and analyse internal and external factors that impact upon pricing decisions
✓ Demonstrate an understanding of the relationship between costs, revenue and profits

Purpose of Module 3: Financial Management
This unit standard is intended for learners who have to manage the finances of a business venture. Learners who achieve this Unit Standard are able to manage the income and expenditure of their own business and base financial decision-making on financial data.

Outcomes
On achieving this unit standard, the Learner will be able to:
✓ Explain financial aspects involved in running a business.
✓ Establish accounting systems.
✓ Analyse elements of an income and expenditure statement.
✓ Analyse elements of a Balance Sheet.
✓ Use the evidence in financial statements to make decisions.

Purpose of Module 4: Human Resource Planning
A learner achieving this unit standard will be able to analyse policy, procedures, agreements and conditions of employment applicable at the workplace environment and take the full responsibility to optimise and maintain efficiencies in policies. The learner should be able to identify trends and have the ability to implement acceptable systems to deal with this.

Outcomes
On achieving this unit standard, the Learner will be able to:
✓ Be responsible for the development and maintenance of effective human resource policies and practices.
✓ Be responsible for the drafting of job descriptions, recruitment, selection panels, and employment contracts
✓ Be responsible for the institute and facilitation of disciplinary policies, actions and hearings
✓ Develop, facilitate and monitor disciplinary policy, process and procedures
✓ Institute performance evaluation committees and manage the performance evaluation process.
✓ Participate in the implementation of applicable labour legislation

Ideal client profile
• Client should ideally be an Absa banking client (personal account holder may also be considered).
• Trading for at least two years
• Have a turnover of at least R 1 Million per annum (minimum of R 500 k per annum may also be considered)
• Black owned enterprise
• Operating within the Eastern Cape

Conclusion
The programme is structured in such a way whereby SMMEs don’t just get the necessary knowledge to improve their current business operations, but they are guides step by step taking into consideration their own business operation.
The proven success of the programme which was held in Bloemfontein and Kimberley attest to the value of the programme whereby people went from not banking with ABSA to being clients, whereby their knowledge about their financials increase and where they can now pose questions to those assisting them.

How to register

Interested SMMEs are requested to send their company registration documents, BBBEE affidavit and ID copy to Ricardo@leapskills.co.za before close of business on 5 November 2018.