Small business funding to be improved

The main problems small business face is finding customers, raising funds, a lack of guidance and entrepreneurs’ tendency to wear too many hats, according to a survey of over 900 start-up entrepreneurs. Seed Academy, a school for entrepreneurship, surveyed entrepreneurs who have been in business less than five years. The results showed that while entrepreneurs faced key challenges, the majority were startlingly positive and motivated to grow and develop their businesses.

These challenges confirm that entrepreneurial development should be aimed at providing business education, helping to create a network, offering tangible guidance to find customers and of course, preparation to raise funds at the most appropriate time for the business.

Funding emerged as a key issue. Only a small percentage of entrepreneurs fund their businesses from the vehicles formally established to support them. This raises questions regarding the accessibility and effectiveness of funding programmes, explained Rachelson.

The SA National Development Plan aims to have 90% of new employment created by small, medium and micro enterprises (SMMEs) by 2030, so it follows that job creation should be a key outcome of entrepreneurial activity. The results indicate, however, that the number of businesses that employ five or more employees are still in the minority. The biggest motivator to start a business is the identification of an opportunity. Only 8% of respondents started a business as a result of not finding a job, which is a leading indicator in the development of successful entrepreneurs.

Key findings are:

• Focus be on entrepreneurial development;
• Female entrepreneurship needs to grow;
• Promote a culture of entrepreneurship;
• Enhancing the angel network;
• Innovative funding mechanisms be offered.

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BEE certificate issued by CIPC

Business owners that run firms with an annual turnover of up to R10 million and that use one of the Companies Intellectual Properties Commission’s (CIPC) self-service terminals to register a business or renew an annual return, can now also use the terminals to get BEE certificates.

Under the amended BEE codes, which come into effect this month, firms with an annual turnover of under R10 million are exempted from having to get a BEE verification – a declaration from one’s accountant stating ones turnover will suffice. The move to allow the CIPC’s self-service terminals to also issue such declarations, will make the process more affordable as it will cut out any fees accountants may charge. The service is only available to enterprises with a turnover of R1 million to R10 million.

As company registrations and BEE certificates are often required by small business owners, it makes sense to make it available in one transaction.  She said the new service will enable customers who register private companies through the terminals to also apply for these certificates at the end of the company registration transaction or when they file their annual returns. Through this process, certificates will be issued for free to registrants.

Currently there are 42 self-service terminals available for entrepreneurs to do transactions. Aside from the centre in Pretoria, business owners can also visit self-service terminals at the Carlton Centre in Johannesburg and the Waldorf Arcade in Cape Town. There are plans in place to ensure that the self-service terminals are available throughout the country.

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Tips for government tenders

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FICA: Amendments proposed

Proposed amendments to the Financial Intelligence Centre Act (FICA) will clamp down more severely on money laundering and corruption, enhancing the supervisory powers of the Financial Intelligence Centre (FIC) and introducing the concept of Prominent Influential Persons (PIPs).

The Bill will enhance customer due diligence requirements by, for example, introducing the concept of domestic and foreign Prominent Influential Persons (PIPs). These include, among others, presidents and deputy presidents; ministers, premiers; political party leaders; government department executives; CEOs, chairpersons and CFOs of listed entities; judges; ambassadors; high-ranking South African National Defence Force officers; and country heads of international organisations.

These classifications are meant to help financial institutions properly identify clients and apply “appropriate standards of due diligence”, according to Treasury, rather than suggest PIPs are more likely to be involved in criminal activity and prevent financial institutions from doing business with them. This is in keeping with the Bill’s risk-based approach to customer due diligence, which takes into account circumstances pertaining to each client when verifying their identity.

The Bill also extends the powers of the FIC in relation to “suspicious transactions”, with proposed new sections inserted into FICA to this effect.

According to Treasury, the Bill addresses “regulatory gaps” that were identified by 2009 evaluations done by the Financial Action Task Force (FATF), as well as International Monetary Fund (IMF) assessments performed last year.

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