The South African government seems to be sending a mixed message to the small to medium enterprise (SME). On one hand, it recognises that they are the largest employers in the country and on the other, they place such a great deal of emphasis on empowerment that the non-empowered SME is left with the impression that they will have to find a partner or close down.
This situation would appear to be exacerbated by the number of available business suitors to the non-empowered SME. "It is unlikely that a potential BEE investor will invest in most SMEs," says BEE consultant Paul Janisch. "And giving equity away is not an ideal situation either. As it is, empowerment is made up of many more facets than just equity."
The best solution is to develop a BEE profile using either the DTI`s Draft Codes of Good Practice or one of the industry charters. The scorecards that are attached to the draft codes and the charters are built up on four basic sections: direct empowerment, indirect empowerment, human resource development and a residual element (which is typically corporate social investment). Every company in SA is required to build up their empowerment profile based on the scorecard. This will result in a score out of 100 points.
Econoserv SA, producer of EconoAccounting, is co-sponsoring a seminar that will make sense of the scorecards and provide SMEs with a clear idea as to going about developing an empowerment profile.
"We have been involved with SMEs for the last 20 years and have been actively guiding them through all types of business challenges," says Econoserv MD Keith Levenstein. "BEE is another of these challenges that the entire economy has to come to grips with."
"Small businesses in particular are very worried about how to implement their broad-based black economic empowerment strategies. They really don`t know how to go about increasing their BEE exposure. They do know that if they do not do something, they will be losing out on business, as more and more organisations, not only from government, insist on seeing their equity profile before purchasing or issuing tenders.
"Just this week we met with a small business owner who has to provide BEE credentials to their customers - large corporates. She is desperately trying to find out how to supply this information. At the same time she is very concerned that she will not meet their requirements and lose their business. It has now become vitally important for her to set up a BEE policy, and also to find ways of improving her scorecard."
The seminar will be hosted by Paul Janisch of Caird Consulting. Janisch is a BEE consultant to the South African SME. Caird`s particular focus is to assist SMEs in SA in developing an empowerment profile. More often than not this profile can be developed without taking on an equity partner.
"The seminar will cover latest legal and policy issues, but will also be `hands-on`. We will be issuing comprehensive course materials. The delegate will be able to make informed decisions on his BEE strategy - something concrete that he will be able to implement. He will be able to draw up his own equity profile by referring to the comprehensive course material we will be supplying," explains Janisch.
The first seminar will be presented on 9 June 2005 in Johannesburg. Seminars in other cities will be held shortly thereafter. The cost is R1 500 (ex VAT) per delegate. Seats are limited so early booking is recommended. To book, go to http://www.econoaccounting.com or contact Hilary Levenstein on (011) 483 1190.
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