SMMEs need more support so that they can upscale and when they do grow, they need help in remaining a sustainable enterprise, a business breakfast by the Free State Black Business Chamber and the province’s Small Business Development, Tourism and Environmental Affairs heard.
Panelists from the education, public and private sectors discussed the potential of the Free State economy and how to exploit it. Fezi Auditors Consultants founder and director Nthabeleng Khawe criticised the lack of focus on medium-sized enterprises. “There has been a lot of focus on SMMEs encouraging entrepreneurs, but the missing part is what happens when (a company moves) from small-sized to medium-sized,” she said.
“There is no focus on the costs of compliance to make that transition or one who, for example, assists on ensuring that (a company adheres) to the Broad-Based Black Economic Empowerment code. “We have to focus on issues like how businesses are sustained until they grow beyond the level of small businesses, and make sure that 10-year-old businesses are sustained such that they multiply to 20-year-old businesses,” she also said.
Emile Du Plessis, who is a behavioural economist for Standard Bank, said that SMME entrepreneurs needed to be aware of their products would be well received by the market. “It’s very important to understand that the entrepreneurship landscape is very dynamic and also important to understand that businesses are frequently trying to address a market need,” he said. “If an entrepreneur can get the aspect of understanding the market’s need, and if that specific product or service can serve the need in the right way, we can be on the right path.”
University of Free State’s Chancellor Bonang Mohale believes that much more can be done for black businesses. “When we give these black businesses contracts, we are always thinking of giving them cleaning or catering contracts, and not the electro- or mechanical-related contracts,” he said. “We must be able to buy our lifts and air conditioners from black-owned businesses (because) what they want is access to the value chains. “About 40% of the economic activity of these value chains is in procurement. Let’s just get the goods and services from (black-owned firms),” he also said.
Mohale also said that one of the ways to change the trajectory of the economy was through vocational training and not academia. “That’s how we build an economy, by making things and selling them,” he said.
“Germany has taught us that vocational training is best. In Germany, you don’t need a matric certificate to learn how to fix cars. And they make the best cars in the world – Volkswagen, Porsche, Audi, BMW, and Mercedes Benz – because they have taught these youngsters how to fix them,” he pointed out.