Small to medium enterprises (SMEs) are powerful tools to create jobs and lift people out of poverty. Investing in enterprise development in South Africa helps to stimulate the growth of black-owned SMEs and draw them into the broader economy, usually through supply chains. Although one traditionally thinks of enterprise development in terms of financial support, there are numerous ways to assist small businesses, including training and mentorship, providing access to markets, funding social programmes, and helping companies to promote their goods and services.
This article discusses three models of intervention with examples . Many of these interventions fall into more than one category.
1. Promoting small business
This intervention model assists small and medium businesses with exposure, expertise and, at times, funds to invest in the business. It also encourages entrepreneurship in young people as a conscious career path.
Examples of interventions that promote small business
- Tractor Outdoor’s #20in21 SME initiative: This intervention gives 20 qualifying SMEs access to marketing support worth R8 million by advertising on Tractor Outdoors’ national outdoor media network of billboards, transit advertising, digital and beach media. One of the recipients diversified their pre-COVID business (which produced custom-made clothing for occasions) to include Busanitextiles, a specialised textiles manufacturing business that produces high-quantity hospital linen and school uniforms.
- Volkswagen, Liberty, and Nedbank are among the supporters of Lionesses of Africa. This social enterprise supports 1 million women entrepreneurs across Africa to nurture their businesses by providing business development support and mentioning. Lionesses of Africa operate in 54 countries and have over 1 million women in their network. Many of the businesses they support are trying to address socio-economic challenges faced by women in Africa.
- Simama Ranta High School Entrepreneurship Education Competition: Eskom initiated this programme in 2010, and the high-school competition is managed by the non-profit Education with Enterprise Trust, which works at promoting entrepreneurship in more than 800 schools throughout South Africa. The annual national competition is judged by a panel representing the Department of Basic Education, the private sector, and experts in entrepreneurship education. The winner is selected from among nine provincial winners.
- SAB Foundation Tholoana Enterprise Programme: This is a structured two-year business support programmes that includes funding and assistance with accessing markets. The focus is on entrepreneurs who are woman, youth or with a disability. About 60 new entrepreneurs are brought onto the programme annually. The Tholoana Enterprise Programme requires full commitment from participants to implement lasting changes and not ‘quick-fix’ solutions. In the past, this has resulted in participants increasing their turnover by 85%, from R170 million at inception to R315 million as at 2019, as well as creating 832 new jobs.
- Eskom Small Business Expo: The Small Business Expo has been boosting small business development for more than 15 years, thanks to collaboration between Eskom and Reed Exhibitions. The idea of the expo is to thrust South African small businesses “into the fast lane” by giving them exposure, networking opportunities, and a chance to secure new business partnerships.
- Anglo American Enterprise Development – Zimele: Zimele is mining giant Anglo American’s ED arm, established in 1989 to provide funding and support to previously disadvantaged South Africans to create and develop commercially viable and sustainable small and medium enterprises (SMEs). It primarily supports businesses in general business acumen, safety, innovation and technical capability, with access to funding provided as a second step.
- Exxaro Enterprise Development Centre for local entrepreneurs: Exxaro established an Enterprise Development Centre for local entrepreneurs in the township of Mhluzi, in partnership with the Steve Tshwete Local Municipality and mining companies Arnot OpCo, Anglo-American Coal South Africa and Glencore. This is one of the company’s Local Economic Development projects it committed to in its Social and Labour Plan of 2013-2017.
2. Financial support for enterprise development
The financial support model offers funding to SMEs to get their businesses started or to grow existing businesses. Some interventions match investors and entrepreneurs rather than providing funding directly. Many interventions provide business skills and mentoring in addition to funds.
Examples of financial support interventions for enterprise development
- A 12-month programme called ‘Khulisa iBiznis’ (meaning ‘Grow your business), developed and implemented by the South African Institute of Chartered Accountants (SAICA) Enterprise Development, J. P. Morgan and The Hope Factory, assisted 141 small businesses in Gauteng during 2020. The programme focuses on improving financial management and business growth.
- Zimele is mining giant Anglo American’s ED arm, established in 1989 to provide funding and support to previously disadvantaged South Africans to create and develop commercially viable and sustainable small and medium enterprises (SMEs). It primarily supports businesses in general business acumen, safety, innovation and technical capability, with access to funding provided as a second step.
- The Seeds of Change Enterprise and Supplier Development Programme aligns chosen entrepreneurs with one of three stages of the programme – incubation, consolidation or acceleration – and provides business skills training, mentorship and coaching, and access to business services, markets and interest-free seed capital.
3. Training and mentorship for enterprise development
This model focusses on providing training, mentoring support, and assistance to turn ideas into workable business plans; to grow existing businesses’ capacity; and develop entrepreneurs’ skills.
- Coronation growing Entrepreneurs Programme: This programme, in partnership with the South African Institute for Entrepreneurship, is focussed on training for farmers in South Africa. By training farmers around financial management, pertinent legislation, operations, and good governance, the programme aims to create sustainable commercial businesses for small-scale agricultural farmers.
- The Seeds of Change Enterprise and Supplier Development Programme aligns chosen entrepreneurs with one of three stages of the programme – incubation, consolidation or acceleration – and provides business skills training, mentorship and coaching, and access to business services, markets and interest-free seed capital.
- Absa Group is partially funding the 1 000 Tech Entrepreneurs Programme, run by technology ecosystem Silicon Durbs, in terms of which aspirant entrepreneurs in South Africa learn how to start and grow their businesses. Absa is currently working with more than 40 entrepreneurs through its WorkInProgress ecosystem.
