Enterprise Development – Money Well Spent

Introduction

Enterprise Development main objective is to create sustainable business enterprises that achieve growth in order to create jobs and to grow the economy,  the two necessary conditions for political stability and low crime rate. International research points out that jobs are created mainly by small to medium size businesses. ED is therefore crucial in ensuring the market economy survives, by ensuring the fruits of a growing economy is shared my most people.

The  Measured Entities are crucial in ensuring that ED achieves its objective. Our experience demonstrate that business organisation that positively embrace Enterprise Development stand to gain more than the 15 points on their BBBEE scorecard. Effective implementation of ED can lead to accessing new customers; returns on investments just to mention a few.

Part of the problem is that ED is not regarded as part Value Chain core-business activities. The task of implementation is relegated to the bottom of the drawer and management do not allocate resources to the project.

The support activities are outsourced to experts. Some businesses do not have the financial capacity to hire outside experts to assist them to implement Enterprise Development projects successful. The problem is made worse by the following issues:

• Lack of time and resources to identify sustainable Beneficiaries;
• Lack of a business model to maximise recognition of contribution;
• Lack of a process to monitor progress on projects and to introduce corrective measures, where necessary;
• Delaying implementation until the right partner comes along; and
• Reservation of spending lump sum due to fear that money will be wasted or misused.

Dinoka was set up precisely to assist business organisations to be successful in implementing their Enterprise Development projects. We have come up with an effective model to address most of the problem areas associated with Enterprise Development.

Our Approach is called the Dinoka Way. We offer the following services to clients:

Hands-on consulting services that ensure projects are successfully implemented

Business Skills training to mentor Category A Beneficiaries

On-going support in all areas of needs

Some of the activities we will carry out include:

ADMINISTRATION

• Assisting with evaluating the business plan, and mentoring and advice around the business concept
• Registering and setting up the start-up businesses including:

• Company/closed corporation registration
• Registering with SARS

• Registering as a Supplier to Public and Private Organisations
• BEE compliance

FINANCE AND ACCOUNTING

• Balance Sheet
• Income Statement
• Accounts – including producing monthly management accounts
• Statutory returns

MARKETING

• Branding,
• Corporate Image including company profiles, letterheads and business cards
• Web based marketing
• Promotions
• PR and advertising

SALES

• Designing a Sales Strategy
• Identifying profitable market segments
• Preparation of quotes and proposals
• Tendering

HUMAN RESOURCES MANAGEMENT

• Recruitment
• Employment Contract
• Dispute Resolution

GENERAL BUSINESS SKILLS

• Leadership
• Corporate Governance
• Running Business Meeting
• Managing Teams and effective Team

For more information on how Dinoka can help you to achieve your Enterprise Development, send us an email or call us at the following places:

Office : 011 483 1190

E-mail: This e-mail address is being protected from spambots, you need JavaScript enabled to view it

Dinoka’s Small Enterprise Development Project

Objectives:

To Assist small enterprises to become viable and sustainable.

To help small enterprise grow

Method:

Training:

Dinoka offers a short, very practical small enterprise development training course. This consists of four half-day sessions over a four week periods.

The course includes a workbook that becomes the practical “bible” of the business.

Topics covered:

Starting a business, how to create a cc, bank account

Marketing/sales

Admin/finance/legal contracts

Finance: Bookkeeping/SARS/Budgets, forecasts

Research, competitor analysis, SWOT

Networking and how it works

HR – staffing issues

Homework – Identify problems, solutions. Where are your customers. List 5 ways to get to your customers.

Make it a habit to contact customers every day. The homework gives actions to carry out each day and becomes part of the business’ daily activities.

After course support

Mentoring

Tendering

Suppliers, purchasing

Outsourcing

Bookkeeping

Enterprise Development (ED) Code 600:

ED is aimed at helping mainly Black owned entities to move from “survivalist to a level of sustainability and profitability to become viable and sustainable”.

• Code 600 of Codes of Good Practice

Focussed Areas:

• Financial Capacity
• Operational Capacity
• Job Creation

Benefit for the Measured Entity: Recognition of contribution to earn 15 points in the BBBEE scorecard.

Formula: A= B/C X D

B= Value of Contribution

C= 3% of NPAT

D= 15 points

Example:

R300 000/R1.8 m X 15= 0.25

= 0.25 of 15 points = 3 of 15 points

Where Value of Contribution is less than 12 months:

Contribution X Benefit Factor X Average Period

Qualifying Beneficiaries:

• Category A Beneficiaries: QSE and EME that are 50% black-owned or black women owned
• Category B Beneficiaries: Any size company that is 50% black owned; and 25 % black-owned and has a BEE score of level 1-6

Dinoka Approach: Money Well Spent:

A) Value Chain Analysis to identify areas to focus on:

• Core-Business: Manufacturing/Packaging/Sales & Marketing/Distribution
• Support Services: General Administration (Procurement/Canteen/Cleaning) Strategic Partnerships/Legal & Regulatory

B) Recoverable Contributions:

Money spent on ED that yields interest (loans) or profit (dividend from investment)

Forms of Contributions: Benefit Factor

• Seed capital: 100%
• Minority Investment: 100%
• Loans (Interest-Free): 100%
• Loans (Standard): 70%
• Guarantees: 3%
• Lower Interest Rate: 3%
• ED with lower dividend to financier: Dividend Rate of     Ordinary Share – Actual Rate of Contributor

Maximising Contribution Recognition:

• Ideal Category A Beneficiary: Supplier or potential supplier.
• Potential Customer

The procurement code states that an enterprise may multiply its procurement spend by 120% from any of its ED partners.

Benefit for Measured Entity: Procurement + ED points

Value for Money= Money well spent

• Investment rather than expenditure
• Procurement points: potential supplier
• Accessing new markets: potential customer

C) Non-recoverable spend:

Money spent that is not recoverable

Forms of ED Contribution: Benefit Factor

• Discounts: 100%
• Grants: 100%
• Costs (Direct): 100%
• Cost (Overhead): 80%
• Human Resources Capacity (Professional Services at no cost): 80%
• Professional Services at discount: 80%
• Employees time: 80%
• Shorter Payment Periods: 15 days less

Dinoka Contribution:

• Managing the ED process
• Identify Qualifying Beneficiaries
• Needs Analysis of ED Beneficiaries
• Professional Services to increase Financial and Operational Capacity
• Hands on mentoring
• Management Reports of Beneficiaries
• Corporate Governance Documents (Shareholders’ Agreements; Memorandum of Agreements etc)
• Corrective Interventions where necessary
• Manage investment on behalf of client and assist the enterprise to grow (board participation, bookkeeping, marketing, tendering, skills development, find new business opportunities)

Dinoka Professional Services:

• Dinoka Training Institute
• Dinoka Partners

ED Structure: Measured Entity to appoint a person to liaise with Dinoka to manage to ensure delivery of services and objectives are achieved.

Monitoring Mechanism:

• Board Representation at Beneficiaries level
• Management Accounts
• Cash flow and Income Statements
• Training Attendance Register
• Monthly Reports