Small businesses hope the new ESD codes will help them to benefit more from BEE.
“BEE is just something that sits in the sky and doesn’t benefit us, but we hope the new scores are going to help,” said Bongumusa Kunene, CEO of Kevali Chemicals. Bongumusa was part of a robust Finance Indaba panel discussion about what the new BEE codes, to be implemented on 1 December, would mean for small businesses. He was joined by Tiger Brands’ ESD director Litha Kutha, national director of business consulting at SNG Grant Thornton, Yugen Pillay and BEE verification director at SNG Grant Thornton, Tony Balshaw, who echoed his sentiments.
Bongumusa runs a small company that employs about 80 people. Although he went through an incubation programme and received funding for his business, he feels that this is still not enough and that the current BEE codes work against small businesses.
He bemoaned the fact that he was expected to have a skills development programme for his small business.
“How can you be a small business trying to grow and still be expected to spend all of this money on skills development?”
He thinks more needs to be done to help small businesses grow, and that means being procured by big business.
Yugen agreed that big business and incubators need to adhere to the new BEE codes and assist SMMEs in getting business. In his opinion, it’s important to focus on acceleration of SMMEs and making sure that they grow in the next five years. “If you look at the latest statistics a third of our youth is unemployed. At the same time, small businesses have created more than 100,000 jobs,” said Yugen. “It means the more we support SMMEs, the better for our country.”
The problem, however, is that most smaller businesses don’t understand the BEE amendments and are not making an effort to either. According to Tony, most companies are happy just ticking boxes and they don’t look at the bigger picture.
“Businesses have to put more effort into understanding how BEE codes work. My advice to some family businesses is always that it’s doable. They have to understand BEE codes and be 51 percent black owned so that they can also be a catalyst for change in society.”
Litha thinks that one of the main issues hampering SMME growth is that once they are on a list of a big corporate as a supplier, that business bars them from working with other businesses. “Everyone wants to claim one SMME and say they’re their supplier, which stifles that SMME’s growth,” explained Litha. Instead, big business needs to allow SMMEs to diversify and get more clients. This means it will be cheaper to get their service and it will also allow SMMEs to grow.