Edge Growth Stuart Townshend says senior leadership must remove obstacles to appointing small business suppliers.
Edge Growth wants to educate and influence business leaders to get more involved in enterprise development.
Stuart Townshend, founder and director of Edge Growth, says:
“A level of sustainability can be achieved in the local market that finance people often do not realise. At a macro-level, we have already seen a shift in approach. There is a move to bring in supply development and support small businesses through initiatives that give them access to markets they previously could not get into.”
He says that previously, enterprise development had corporates take a hands-off approach with it at the periphery of the business. However, thanks to the importance of transformation in the country, leadership now understands that development must be part of the strategy to attract new customers, be more innovative, and develop the market.
[cfocoza-cta slug=finance-indaba-africa-2019-register-for-free]
“Today, more CFOs and senior leadership are involved in these programmes. Behaviour changes are happening, albeit slowly. They must remove some of the obstacles that exist from an operational level limiting small business appointments as suppliers of the business. There is certainly no bad intent. Instead, it requires the market to be educated on the expanding involvement when it comes to enterprise development,” he adds.
According to Townshend, there is a significant amount of money to be spent over the next five years on enterprise and supply development. He networked with delegates at the Finance Indaba 2018, with the aim for getting them more involved in the process.
“Critically important is to have a strategy and roadmap in place. Companies need to examine what the key performance indicators are and how success will be measured. This needs to be identified up front so they can track progress along the way. Additionally, more enterprise development programmes are bringing in elements of sustainability. For example, this sees large corporates offering them loans as part of their development budgets to assist with the working capital so desperately needed.”
In many respects, South Africa is leading the charge in terms of small business development on the continent. It is the first country to have legislated a way to get resources in place to aid small businesses.
“When it comes to enterprise development, specifically on the small business side, the country does it on a different scale than the others thanks to the legislation. Certainly, other African countries are doing their part, but this is kept to a minimum. Kenya, for its part, is also doing incredibly well and they have rightly been dubbed the Silicon Valley of Africa thanks to their support of the tech start-up sector.”
One thing that is desperately needed in South Africa is to expand the pool of small businesses that form part of enterprise development programmes.
He concludes:
“With such a limited number of businesses, there is the real danger of programme fatigue from these beneficiaries. Small businesses are questioning the benefits of being part of a pool and becoming more critical in what they are getting out of it. Fortunately, we are approaching an environment where standards are part of the environment and the quality of mentors and development programmes will be considerable better. Focusing on saving time and costs for everyone will be critical for the growth of the market.”
