The way money is spent on enterprise and supplier development (ESD) requires a custom and holistic approach, a real commitment to small business upliftment, and absolute transparency, according to enterprise and supplier development firm Edge Growth. Nabeela Vally, who is the business development manager at the company, believes that ESD spending should be driven by a spirit of national transformation, and not just for business and compliance considerations. Vally spoke to Vutivi News about the value of corporations spending their ESD budgets to adequately support the growth of SMMEs in the business environment. She said that a one-size-fits-all approach to ESD limited its effectiveness of ESD.
“While an essential part of any ESD programme, funds alone do not ensure success for a fledgling SME hoping to break into new markets,” Vally said. “An ESD provider that is results-driven will ensure that business development support forms an integral part of their ESD programmes. “Paying for expert business mentorship that will assist with developing and supporting the beneficiary is always money well spent,” she said.
Vally added that the services of a strategic ESD provider were valuable to small businesses, as inexperienced SMEs may not know how to scale up their operations in order to unlock growth and achieve lasting sustainability. According to Vally, investing in SMEs had the added benefit of directly contributing to their growth and prosperity, which in turn led to job creation and economic growth on a bigger scale.
She also said that investing in SMEs provided investors with an optimal solution to develop and invest in industry-aligned enterprises and suppliers to achieve impact, compliance, financial and sustainability objectives. “Investing in an enterprise and supplier development partnership does so much more than boost a business’s Broad-based Black Economic Empowerment scorecard, though it performs this function extremely effectively as well,” Vally told Vutivi News.
“By offering SMEs a valuable spot in its supply chain, an organisation is not only making an investment in the South African business landscape, (but) they are also investing in their own competitiveness and continued relevance in tough economic times. “Smaller suppliers are generally more agile, innovative and geographically better placed.”
Vally said that the key to ensuring that both corporations and SMEs benefited from successful ESD spending, was corporations selecting service providers that had the best interests of SMEs at heart. “It is estimated that as many as 80% of new businesses fail within the first five years. Even with business growth support, an SME’s chances of long-term success are far from secure,” she said. However, she warned that selecting a service provider that could deliver measurable results was not always an easy task, as many talked about a big game, but failed to live up to the hype when it came to making a difference.