OVERVIEW
Development finance and SMME support Prompt payment is vital for small businesses.
SECTOR INSIGHT SAB aims to create 10 000 jobs by 2022.
P
ortia Mngomezulu, the founder and managing director of Portia M, told the host of a radio business show in 2018 that one of the most important factors in allowing her to scale up her skin products business was the willingness of Pick n Pay to pay her within seven days. The entrepreneur was named in 2018 as Pick n Pay’s Small Supplier of the Year and her sales topped R10-million. From an initial investment of R200, she now employs 27 full-time staff and her range of products is available in four African countries outside South Africa. One of biggest problems faced by small, medium and microenterprises (SMMEs) is cash flow. Most government departments have rules about procurement which are biased in favour of purchasing from SMMEs or co-operatives. However, for many South African entrepreneurs, the inability or unwillingness of government to pay within 30 days presents a major risk to sustainability. The Enterprise and Supplier Development (ESD) Programme of Pick n Pay addresses and goes a step further with the seven-day rule. Public procurement from township enterprises from provincial and municipal governments in Gauteng, the province where more than half SOUTH AFRICAN BUSINESS 2019
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of the country’s SMMEs are located, increased in 2017 to R17-billion, up from just R600-million in 2014. This expenditure has allowed many township businesses to enter the formal economy and for them to become more sustainable. The City of Johannesburg runs seven SMME hubs where office space, Wifi and advice and training are available for small business operators. All South African retailers have ESD programmes which typically create or support small businesses along their supply chain. A small community in rural Mpumalanga is remote and difficult to get to, but 13 farmers at Elukwatini Farm sell tomatoes to Woolworths. According to a Business Day report, Woolworths works through Technoserve (an NPO) and Qutom (a large supplier) for produce to be collected. De Beers Venetia Mine in northern Limpopo has chosen the transport of its workers as an area for business creation. Two small bus businesses servicing its labour-sending areas have been created with a wide range of ownership and with potential to expand.
