HELPING YOU RUN A BETTER BUSINESS …

1 FREE. at selected outlets or by bulk subscription EDITION 3. November 2013. HELPING YOU RUN A BETTER BUSINESS bee boost for small businesses BY DANIEL BUGAN. MEGA small black-owned businesses will receive a significant boost in their attractiveness to supply to large companies and government when the revised Broad-Based Black Economic Empowerment (B-BBEE) codes, gazetted by the Department of Trade and Industry (DTI) last month, comes into effect in October next year. All businesses , regardless of the level of black ownership, with an annual turnover of less than R10 million will be categorised as Exempted Micro Enterprises (EMEs) and will be exempted from Black Economic Empowerment (BEE) verification.

2 This implies that they will not have to do a BEE scorecard, as is currently the case, and that they are no longer required to get a BEE certificate from a BEE verification agency. Instead, the owner can make a sworn statement to confirm the turnover level and black ownership status. Currently, EMEs are auto- matically awarded a level four BEE. status, regardless of the level of black ownership. This allows their Since receiving R600 000 from the small Enterprise Development Agency (Seda) Technology Programme, Northern Cape BUSINESS owner Isak clients to count 100% of their Andrews, who runs Andrew Peers Megawatt cc, has increased his turnover and productivity by 63% within six months.

3 He has also secured big purchases from the EME as BEE contracts with Eskom and nearby municipalites and has employed an additional six people. Says Andrews: Seda does not merely promise. They procurement. deliver, whatever it takes. Their clients, of whom I am one, receive the best service. I am deeply impressed and pleased with the way in which they The main adjustment in have supported me. He is pictured above with Querida Meyers. Contact Peers at andrewpeersmegawatt criteria to be classed as an EME. is that the annual turnover level will be increased from R5 million automatically be awarded level scorecard to the generic scorecard socio-economic development.

4 The we are using scorecards but I still to R10 million, which will allow two status, with 115% of clients' which applies to large firms. revised codes add some punative need to familiarise myself with it, . many more small businesses to spend counted towards BEE In general, the revised codes measures for non-compliant large she says. Sharon Prodehl, owner benefit from the BEE exemption. procurement. are fairly similar to the existing companies that will be penalised of Universal Mail, says compliance A further shift will come into Those with a turnover between codes, although some weightings through a discounting of BEE will cost her R8 000.

5 I have effect for EMEs which are black- R10 million and R50 million and names of some elements have levels to lower levels. always chosen to do a scorecard owned. businesses that are 100% adjusted from the current been changed. Instead of seven Surprisingly, BUSINESS owners regardless of whether I needed to black-owned will automatically figures of between R5 million elements, there are now five. small BUSINESS Connect spoke or not. I found we get contracts be awarded level one BEE status, and R35 million are considered However, they still contain mostly to were not clued up on how since we have a scorecard, but which allows their clients to count Qualifying small Enterprises the same indicators as before.

6 They would be affected. Helen did not get when we did not have 125% of their spend with these (QSEs) and, unlike black-owned The five elements are Marokoane of Puletso Construction scorecards, says Prodehl. She EMEs as BEE procurement. If an businesses , must still follow the ownership, management control, says she has not read the codes does not foresee a big impact on EME is more than 51% and less entire scorecard with very few skills development, enterprise and is not sure how it will impact her BUSINESS because she has than 100% black-owned, it will allowances or easier aspects to its and supplier development and her.

7 We are not exempted and always had a scorecard. DTI warns: Beware of bogus CIPC agents Page 2. HAIR. African markets open TODAY. not gone doors for local BUSINESS Page 6. How to start City transport machine a hair salon. small BUSINESS Connect is published for the small . BUSINESS . Connect Department of Trade and Industry by SA BUSINESS Owner and Co cc of 10 Dreyer Street, Claremont, that takes a load Page 18. Cape Town and printed by Paarl Media of 83. Heidelberg Road, City Deep, Johannesburg. Page 3. page 2 - November 2013 small BUSINESS CONNECT. Grants for township businesses Facing BY MARTIN FEINSTEIN.

8 Reasons. We have done a lot to common challenges build industrial capacity in sectors THE Department of Trade and like the automotive sector, now we Industry (DTI) is planning a new need to help build the capacity of small BUSINESS grant programme small businesses , he said. small BUSINESS Connect aimed at township businesses October also disclosed that was at the DTI's National to improve their production and the DTI had approved funding for SMME Summit held in become BETTER suppliers to formal a further 27 incubators to start Mpumalanga recently. businesses . or expand. Here BUSINESS owners had Speaking at the National Government was on track with the opportunity to ask questions SMME Summit in White River, its plan to have 250 small BUSINESS and raise important challenges Mpumalanga, the Director- incubators in the next five years, they face.

9 General of the DTI, Lionel October, to provide entrepreneurs with a The common challenges said the new grants will range supportive environment to ensure highlighted were access to between R5 000 and R50 000 sustainability. Support for co- retail shelf space with large and are designed to enable the operatives in the agriculture and retailers, not having time to purchase of equipment and basic agri-processing sector would also manage different aspects of the BUSINESS necessities without be increased. BUSINESS and access to funding. which businesses find it difficult October says the DTI had Every time we go to the IDC.

10 To function and produce goods. created many structures to for funding, they have changed We have not done enough for support small businesses but their policies and their priority small businesses and especially we haven't yet really cracked the sectors, said one young female rural and township businesses . problem. The problem is not in entrepreneur. The last time We need a new delivery model for starting businesses . I went to apply for funding for these new grants, he said. What we need is improved my BUSINESS , they told me they We are planning a billion market access. We must get more will only fund manufacturing.