Supplier and Development network session
Durban Chamber of Commerce (DCC) held a series of many sessions that bring big and small businesses together. The DCC found that with all the strides made to bring information about opportunities to the fore in a bid to assist SMME’s, there was a lack of engagement between the two sectors.
The Chamber saw the need, and realised the opportunity to bridge the gap between SMME’s and well established businesses. It’s no secret that small business require access to information, capital, skills and especially, access to market.
It seems to be a trend that when SMME’s look for opportunities, for some reason they gravitate to the public sector. Although there seems to be some sort of window of opportunities, tenders and the likes don’t avail as much as previous times.
Kim Macilwaine of Distil Consulting, has partnered with the DCC and Transnet in their mentorship programme, which assists SMME’s to do business with the private sector. With years of experience in this sector, coming from Unilever and other big cooperates, he spoke to attendees about the fundamental requirements to penetrate the space of the private sector. “There are opportunities in the private sector,” said Macilwaine. Acknowledging that there are some hurdles to doing business with this sector, the possibilities are there. Examples of these are around the 30/60/90 even 120 day payment policy, he urged entrepreneurs to consider how these challenges affect them and whether to continue with the contract. The economy is under pressure which forces entrepreneurs to adjust accordingly.
He reflected on the 4P’s, saying that if one got the basics of that right, then chances to succeed were higher. These being: Product, Price, Promotion and Play/Place. Macilwaine said that procurement is now the most challenging step for any business. Nowadays these are done online via e-auction, so in order to compete, one needs to have a powerful strategy in play. The entrepreneur today must have a unique selling proposition. There needs to be a clear point of difference between your services, compared to what everyone else offers. Your points system needs to prove transformation, it must be precise. He stressed professionalism. Small business must commit and comply with communication and obligations. “If your financials as an SMME are in order, it will work in your favour,” said Macilwaine. In closing, he touched on having a traceable footprint. Businesses need to have a professional website and online presence.
Old Mutual was represented by Ms Sibongakonke Nkosi, who touched on how to do business with the Financial Service Provider, through the subdivision called Masisizane Fund. Established in 2007, this Fund aims to assist SMME’s with financial backing to get business off the ground. They focus on 51% or more Black owned businesses, women, youth and people with disabilities. The Fund aids, technical support, capacity development and financial education as well as market development and other services. Funding is provided in the form of a loan. With reasonable payment terms. It identifies and wants to fund profitable SMME’s. Loan terms differ in accordance with the SMME’s goals and finance requests.
SAPREF also contributed to this link between the two sectors. Ms Mpume Mbambo, Sustainable Development Manager for the company, informed the attendees about what SAPREF does and what opportunities they have for SMME’s. As a company that doesn’t sell anything, she firstly took entrepreneurs through what the corporation does. Owned by Shell and BP, the company makes products that supply these entities. Mbambo finds that many SMME’s approach SAPREF for construction contracts, not understanding that they do not operate in the construction sector. They run a pipeline bringing oil into the country and from that, manufacture products accordingly. She stressed that entrepreneurs do thorough research before approaching big business to assess whether or not they are able to supply the needs or provide a service to that particular corporation.
Located on the coastline South of Durban, SAPREF prioritise the awarding of contracts within the Basin. “We work closely with companies around us, as well as communities around us,” said Mlambo. The reason is mainly because these communities are directly impacted by SAPREF. The company prides itself in its’ Corporate Social Responsibility initiatives. Building Maths and Science Laboratories, which target grade eleven students and grooming them, as well as providing bursaries as it feeds into the agenda of giving back to the community, hoping to employ those students in the future. After the #FeesMustFall protests, SAPREF saw an opportunity to contribute in other areas connected to their programme.
Being a member of the Durban Chamber of Commerce, it also networks through the organisation when they look for enterprise development programmes. Procurement with SAPREF requires all the standard necessary regulations, which are valid company registration, Tax and BBBEE verification. The Points system operates between BEE levels 1-4, specifically intended to focus on small business. SAPREF regards safety and quality as extremely important. Procurement specialists check pricing. The problem SMME’s have is usually over/under pricing. Mbambo reiterated that they will only use international suppliers only if they cannot secure a product or service within the country. Therein lays huge opportunity for SMME’s.
The Chamber continues to encourage SMME entrepreneurs to become members with the organisation as there are abundant opportunities through the entity. They offer loads of services and networks for SMME growth and development. The Chamber is committed to SMME and access to markets therefore has a willingness to ensure that entrepreneurs succeed.