Government often sidelines young black companies on price because they do not have the financial reserves of traditionally white-owned companies, says Leon Hendricks, CEO of IT service provider DLK Group.
Hendricks said at the launch of the new DLK Group structure today that the problems were especially prevalent at local and municipal level. He added that all levels of government must boost their commitment to black economic empowerment if emerging black enterprises are to build firm foundations for sustained growth and job creation.
The DLK Group has expanded into five specialist divisions that allow it to offer solutions combining application solution implementation and support - predominately in SAP environments, IT infrastructure services, spatial information solutions, business development engineering and human resource recruitment and training.
"In going for the cheapest tender, government is undermining the need for emerging businesses to build financially sustainable businesses. We don`t have the financial reserves white businesses have built up over the years to compete for new business on price.
"Not enough recognition is given to black-owned businesses that are trying to grow through their own ingenuity, hard work and commitment to excellent service delivery."
Hendricks said government feels safer in going for the big names that have become empowered through share deals rather than hard work.
"DLK has been fortunate to be able to double the size of the company since 2000 because we have convinced the municipal and government departments we`ve worked with that quality service is worth paying for.
"For young black-owned enterprises to survive and compete with established companies it is essential to add value to clients` operations. Those that just add a fee to a solution someone else has packaged will not survive. They`re merely acting as door openers because their colour scores points with clients. It`s a business model that cannot survive."
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