Development institute advises entrepreneurs on trends and strategy
SMALL businesses development was the topic yesterday at the SMME Roadshow at Port Elizabeth’s Boardwalk, with financing, energy and empowerment top of the agenda.
Small Business Development Institute (SBDI) chief executive Xolani Qubeka told delegates small black-owned businesses were concentrated in the areas of security, catering and construction.
Growth in sectors like renewable energy, agriculture, technology, manufacturing and automotive was being encouraged, Qubeka said.
He said black empowerment transactions worth R600-billion had taken place since inception, but that only 20% actually went to black people.
“We find ourselves in a situation where we are no longer dealing with transformation but . . . compliance,” he said.
Qubeka said the SBDI’s Vision 2030, based on the National Development Plan, aimed to create 3 000 sustainable businesses focused on key growth sectors with a revenue target of R500million a year. This would be achieved through strategic partnerships with the government and the private sector.
Explaining the effect of energy constraints on small business development, Qubeka stressed the need to move into renewable energy to ensure that businesses could continue to grow and be sustainable.
Entrepreneurs were advised to ensure that their businesses were strategically positioned to obtain sufficient credit from banking institutions, since government financial support was not always feasible.
Standard Bank Eastern Cape head Joe Motshelabola said small and medium enterprises (SMEs) accounted for almost half of gross domestic product, up to half the formal wage bill, and some 60% of private-sector employment.
This made it important to find ways of giving SMEs access to finance, he said.
“The trouble is that banks are strictly regulated, because they are responsible for the billions of rands entrusted to them by individuals and businesses.
“In other words, like SMEs, banks play a vital role in the economy. They cannot put themselves at risk by lending money to small businesses that might fail,” he said.
“[Standard Bank] focuses on making access to credit possible, [so we] take different approaches to helping SMEs get to credit-readiness.
“Our small enterprise unit offers basic affordable banking services that enable small businesses to build financial records and capacity. We then add to these services tools . . . that enable SME owners and managers to build their financial management capabilities.”