As small businesses in South Africa are recognised as a driving force for economic growth and creation of jobs, enterprise development programmes offered by government and corporates offer black entrepreneurs the opportunity to find support and training to further develop their small businesses.
Businesses serve a critical role in driving more inclusive and sustainable development. Large companies can create positive impact by improving and growing development. Corporates can achieve this by including small business into their value chains and local communities.
Helping small businesses to achieve sustainability and growth is vital for both the development of industries and corporations. Small businesses are critical for job creation, improving living standards, raising productivity and achieving inclusive economic growth and social cohesion.
In the coming years there will be a great demand for jobs and the private sector will be the core to the solution of this challenge. Many of the new jobs will come out of the small, medium and micro-enterprises, which is why enterprise development programmes are emerging around the world.
What is an enterprise development programme?
Enterprise development involves the growing of small and medium-sized black businesses through the provision of finance and support, assisting in their business development and sustainability. In creating a programme for enterprise development, budding entrepreneurs and all they hire will earn a living, which in turn uplifts their quality of life. These programmes could lead to long term economic growth for entrepreneurs, their families and friends and their entire communities.
The enterprise development programme is just one of the elements of BB-BEE and is considered an effective way to combat poverty across the globe. Its objective is to teach potential entrepreneurs how to create a sustainable business that will grow and increase job creation, which in turn contributes to economic growth.
Enterprise development programmes ought to be aimed at transferring skills and wealth as well as leading to the sustainable growth of small businesses.
How can you benefit from enterprise development programmes?
Enterprise development programmes aim to pass on knowledge, experience and business support. This aim will provide start-ups with essential tools and resources that can then be used for the development, survival and success of business.
Essential tools and resources can be divided into financial and non-financial support. Non-financial support can be provided in the form of mentorship, market access, network access and the learning of new skills.
80% of South Africa’s start-ups fail in the first three years and this is largely attributed to a lack of support. However, the survival rate of a start-up is increased by the incubation process, which assists small businesses in becoming financially viable.
The Gordon Institute of Business Science (GIBS) and FNB’s Entrepreneurial Dialogues, State of Entrepreneurship in South Africa report revealed that: “Business incubators assist emerging companies survive and grow during the start-up period, when they are most vulnerable. The incubation process
improves the survival rate of start-up companies by assisting them to become financially viable, usually within two to three years.”
The FNB/GIBSs report explains:
“Start-ups fail at a rate of about nine in ten in the first two years of operation. Within the 27 SEDA incubators (in operation), the survival rates are in the region of 84% to 97% in the first two years of operation. Post-graduation from the incubator, the numbers come down but they are still in excess of 70%.”
Why do corporate businesses offer enterprise development?
The B-BBEE Amendments are providing corporate South Africa with an ideal opportunity to construct sustainable businesses and to play a lead role in the socioeconomic transformation of the country. Investment and improvement in local economies can ensure profitability and economic success for all business around the world.
By offering an enterprise development programme corporates are awarded:
Points on the BEE scorecard
An opportunity to diversify their supply chain
An innovative way to increase business for both small and medium sized enterprises.
It’s an inspiring vision for business to play a real role in the sustainability and growth in the country’s economy.
Here are some of the various types of enterprise development programmes that an applicant could apply for:
Youth enterprise development programmes
The unemployment of youth in South Africa is one of the highest in the world. The steady increase of the youth population is not being matched by an increase in job opportunities. There is a large discrepancy between what the youth are being taught and what employers expect them to know.
1 – Junior Achievement South Africa Enterprise Development Programme
Junior Achievement South Africa is a unique intensive incubator style entrepreneurship skills programme. The aim of this project is to address the unemployment challenge amongst the youth. This programme provides practical entrepreneurial skills and traditional workplace readiness skills. This will solve the challenge the youth face when entering the job market with insufficient experience.
The programme consists of 20 four hour sessions which runs for three to four months. The students are expected to start running a real business, with the intention that the businesses are sustained after the programme is completed.
Who should apply?
This programme is targeted at young adults between the ages of 18 and 25, who are not in school and are currently unemployed. Participants are chosen based on:
Commitment to the programme
Inclination to participate in entrepreneurial activity
Ability to demonstrate problem solving skills
Commitment to their personal development.
To contact Junior Achievement South Africa
Phone: +27 11 331 3150
Women’s Enterprise Development Programmes
These enterprise development programmes are created to increase the economic opportunities for women entrepreneurs by supporting them in starting, strengthening and expanding their businesses.
2 – The Women’s Enterprise Development Initiative
This is a niche private equity and Technical Assistance Programme that creates superior returns for investors by investing in women entrepreneurs. This fund supports wealth and job creation, while providing support to women in developing countries, helping them to build viable and sustainable enterprises.
Who should apply?
Dynamic women with a record of achievement in businesses? that support women
To contact Women’s Enterprise Development Initiative
Telephone: +27 11 958 1583
FSP Enterprise Development Programmes
FSP Enterprise Development Programmes are offered by banks or financial institutions.
Related: How Women Entrepreneurs Can Change the SA Business Landscape
3 – Standard Bank Enterprise Development Programme
Standard Bank is offering a specialised Enterprise Development programme. The aim of this programme is to offer financing solutions to primarily BEE businesses that have achieved access to superior earning opportunities from corporates or the public sector.
A black owned entity, either 51% black ownership or 30% black women ownership
A supplier wanting to sell equity to become more BEE viable.
How to apply
Standard Bank has a different approach to enterprise development programmes. A business will select or choose a supplier and then contact Standard Bank, the bank will then offer the supplier financial assistance, which will enable them to meet their obligation to fulfil the contract.
For more information
Contact: Vuyelwa Ndlovu on 011 344 5980
Contact: Timna August on 011 721 7875
Resource: Government Funding