In a recent research article published by the B-BBEE commissioner, it is evident and apparent that Enterprise and Supplier Development systems are not working optimally. We have long discussed this as a team, and this year marks 25 years in Siyakha's history and 21 years of delivering SMME and Community Development solutions.
The over-emphasis on "funding" solutions is often an absence of strong financial management. Last year our team undertook a mock exercise to apply for SMME funding across a multitude of SMME Specialist funders.
All findings in all instances except two, Was that SMME funding, Follows pretty much the same credit criteria as corporate funding. This means that entities that lack strong balance sheets and established financials will pay a premium Which they can ill afford.
Finance, contracts, governance & Sales
The overwhelming findings in SMME development are that there are two areas in that every small business that needs support and assistance. The first is financial management pricing, negotiating supplier contracts, legal agreements with clients, governance and compliance. In essence, all of these things drive commercial validity and longevity.
The second is sales, a good elevator pitch, daily sales calls, simple but great proposals and a developed brand. Using social media to support business visibility, having the basic tools for a strong corporate identity and understanding when and how to use these to support the sales process.
These two focus areas, added to a great entrepreneurial mindset, are the essential skills to develop and override the need for funding. Without the basics of solid commercials and a sale strategy, funding can pose a risk.
For more information on the research study,: Determining the Effective Implementation of Enterprise and Supplier Developmemt Funds Report
