Posts Tagged black owned businesses
Black owned companies need the B-BBEE Scorecard
Posted by Cornilius in True Empowerment on July 23rd, 2009
There is a misconception held by some companies that are Black owned that they do not need to go through the compliance process. Such companies feel that the fact they have a high percentage or even 100% Black ownership and management they have met the B-BBEE requirements.
All companies in South Africa need to work on the B-BBEE scorecard. Ownership alone constitutes 20 points on the Generic scorecard (scorecard for companies with annual turnover of more than R35 mil) and 25 points on the QSE scorecard (scorecard for a company of between R5 mil and R35 mil annual turnover). Earning full points on the ownership element for either a Generic or QSE entity without points elsewhere does not make them B-BBEE compliant. The broadbased nature of the B-BBEE scorecard means all companies have to train their Black employees, buy from B-BBEE compliant suppliers, help other Black owned businesses to grow, donate to charity apart from other initiatives if they are to be labelled as truly empowering. This will speed up the process of emancipating the disadvantaged in South Africa.
What those Black owned companies that feel it unnecessary to work on the B-BBEE scorecard are doing is to drag and frustrate the process towards economic parity among the South African racial groups.
BEE points for large corporates for trading with smaller businesses
Posted by Cornilius in procurement on July 8th, 2009
The B-BBEE codes have encouraged the growth of small businesses (those with annual turnover below R35 million) and Black owned businesses through the element of Preferential Procurement. Generic companies (companies with annual turnover of more than R35 million) earn 8 points for spending just 25% with suppliers with annual turnover below R35 million as well as Black owned and Black women owned businesses.
This certainly encourages large generic companies to buy from suppliers who need support to grow leading to more empowerment of the more deserving entities and individuals. The growth of any company heavily hinges on the number of customers that they have. Having customers in the form of large corporates is more desirable for any small business because they have more capacity to pay for orders.
In other words, there is a benefit to the generic companies in the form of getting more BEE points while helping the sustainability of the smaller businesses.
Where are the black businesses?
The codes allocate extra points for black owned (50%) or black women owned businesses (30%) for procurement. Also you can earn enterprise development points by supporting those types of businesses. Yet so many people I see cannot find these businesses. I visited a client two days ago, and recommended that they do something fast – their year-end is 28 February – one week away. The easiest way to earn extra points is by supporting black owned (50%) or even 25% black owned businesses, and paying their invoices COD! However many businesses do not have back owned suppliers or do not know that some of theirs suppliers fall into that category.
It’s a shame that too few black owned businesses exist and too few advertise their competitive advantage – what they can do for their own customers.
Is there a database of black, and especially black women owned businesses that we can all refer to? Should we start such a database?
Recent Comments