WHILE the government is often criticised for creating more problems than solutions, an agency under the Department of Trade and Industry is turning failing businesses in Nelson Mandela Bay into multimillion-rand success stories.
The Bay office of the Small Enterprise Development Agency (Seda) and its information communication technology (ICT) counterpart, the Seda Nelson Mandela Bay ICT Incubator (SNII), are celebrating resounding successes in turning around struggling small and medium enterprises (SMEs).
According to incubator head Sipelo Lupondwana, 31 ICT-orientated small businesses in the Bay which are being aided by his office have produced a turnover in 2012-13 of R6-million, while at the same time creating 95 direct and indirect jobs.
“We are excited with the performance of the SNII incubates which places us on a firm footing for continued growth.
“This is an indication that our support is working while allowing the entrepreneurs to focus on their core business. These results are solid if you consider that about 70% of the businesses are barely a year old while the remainder have been in existence for less than three years,” Lupondwana said.
The SNII is funded by the national Seda Technology Programme and the Nelson Mandela Bay Municipality.
“We are also pleased that this year three of the businesses – Bran Systems [software development], Shoot 97 [film] and Rockstar Media – will be graduating from the programme.”
The three businesses had been with SNII for about three years, creating a combined 18 jobs. Six businesses had graduated since 2008, Lupondwana said.
The three graduating businesses will also go through the six-month SNII “post- incubation programme” which focuses on their business strategy, service and goods quality, and financial management.
“Between its establishment in 2008 and the 2011-12 financial year, SNII incubates have generated a total turnover of about R24.5-million while funding in the same period amounted to R12-million. A total of 117 jobs have been created by the small businesses in this period.”
Also celebrating is the Seda Bay office which supports non-ICT-orientated SMEs.
Office head Andile Yengeni said after joining the organisation 13 years ago, he could see the hard work was beginning to pay off. “We always start with a diagnostic assessment of the struggling SME and, together with the business owner, we draw up a developmental action programme, identifying experts who can help the business.
“Some of the SMEs have dramatically increased their profitability and the number of people they employ. Some have even gone into exports.”
One such business is the Mooihoek farm in Hankey which approached Seda for assistance in turning around the ailing produce company in 2006.
Seda funded the implementation of a quality system based on the produce industry’s best practices standards and also helped owner Madele Ferreira to market Mooihoek by helping develop a corporate identity. Seda also introduced Ferreira to Dutch SME expert service organisation, PUM, which further added to Mooihoek’s growth. From verging on insolvency, Mooihoek, which grows leeks, strawberries and spinach, has more than 50 employees and an annual turnover of more than R6-million.
Last year, Ferreira was named Job Creator of the Year at the Sanlam/Business Partners Entrepreneur of the Year awards.