Ingredients for successful SMMEs
Date posted: 19.11.2015 | Author: Harry Bovensmann
Skills such as innovation and risk taking should not be overlooked as essential ingredients to small, medium and micro-sized enterprises (SMMEs). Business failure is often attributed to the lack of entrepreneurial knowledge and skills such as innovation and risk taking and therefore should not be overlooked as essential ingredients for successful SMMEs.
The Department of Small Business Development will place more emphasis on the development of small businesses and facilitating access to finance and market support. The ministry is aimed to remove regulatory constraints and tackle laws that inhibit the growth of entrepreneurs.
Low levels of education and training, as well as poor business skills were contributing factors. To address the skills challenge, my the department has embarked on a journey to develop entrepreneurs. Together with Technical Vocational Education and Training Colleges (TVET), the department is launching Centres of Entrepreneurship across all the provinces.
In 2015, the department launched centres in False Bay College (Western Cape) and Gert Sibande College (Mpumalanga) focusing on the hospitality sector, while Centres of Entrepreneurship have been planned for the North West and KwaZulu-Natal.
It is encouraging to observe survey results revealing a marked change in the SA start-up landscape, with an increase in black entrepreneurs. Despite the upward trend in the number of SMMEs registered since 2000, there is growing consensus that South Africa’s business activity rate still lags behind its BRICS peers.
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Public Procurement Reforms
Date posted: 04.11.2015 | Author: Harry Bovensmann
In a bid to improve spending on goods and services, government will roll out public procurement reforms over the next three years. Finance Minister Nhlanhla Nene announced this in his Medium Term Budget Policy Statement in Parliament in October. Public procurement is big business and the public sector spends over R500 billion a year on the procurement of goods and services.
Budgetary controls on non-essential items, innovative procurement reforms and strengthened cost-containment measures will encourage more effective use of resources in the years ahead. A framework has been developed to standardise public procurement reporting, supported by a training programme for responsible officials.
The Minister claimed a lot has been achieved including:
- The establishment of government’s eTender portal, which provides a single point of entry to business opportunities with government, which in the process enhances transparency and reduces the time and cost of accessing tender documents;
- Ensuring that a Central Supplier Database is operational, easing the administrative burden for business and government alike. More than 20 000 suppliers have registered and a total of 9 500 have been verified since September 2015;
- The transversal contract for Learner Teacher Support Material has been completed, and the highest contract price for Grade R stationery is R115, inclusive of packaging and delivery;
- In October, Treasury launched a buying site for high volume-low value items, similar in design to commercial e-commerce sites, enabling supply chain management practitioners to purchase routine items through www.gcommerce.gov.za.
National Treasury said that a single procurement bill is being developed to replace the more than 80 different legal instruments, guidelines and instruction notes that govern public procurement. The Office of the Chief Procurement Officer will present a draft bill for comment in January 2016.
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Business identity theft on the rise
Date posted: 28.10.2015 | Author: Harry Bovensmann
Business identity theft was on the rise over the past year according to the 2015 Metrofile Information and Records Management Index. It is more lucrative for criminals to target businesses, rather than individuals, when it comes to perpetrating identity theft scams. South African businesses of all sizes must take note of these results and be more vigilant when it comes to storing and destroying documents containing personal information of customers and employees.
Furthermore, when respondents were asked whether they or someone they know has ever been a victim of business identity theft, 31% of the respondents said yes. This result increased by 12 percentage points year on year.
The most common form of business identity theft scams involve customers receiving letters with official company letterheads stating that their account details have changed and instructing the customer to make payments using these new details. The scam comes to light when the business contacts the customer to establish why payments are not being made, only to discover the funds have been paid into the fraudulent account.
Identity theft scams can result in reputational, legal or financial damage for the business as the customer wonders how their details were obtained by the fraudster in the first place. Under the Protection of Personal Information Bill (Popi) businesses have a legal requirement to ensure the personal information of all stakeholders remains secure and once the regulator is appointed, the business could face fines of up to R10m or jail time.
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SME: Technology counts
Date posted: 21.10.2015 | Author: Harry Bovensmann
SME: Technology counts – as a small business owner, you are spoilt for choice when it comes to affordable technology to help you run an efficient, responsive and productive company. Yet choosing the right software and hardware for your business can be challenging when you’re working with a limited budget.
1. Start with your business needs, not the technology
The point might sound obvious, but many small business owners focus more on the brand or the technology they want to buy than on their business needs. Here are some issues to consider when considering a new IT product or service:
• Does my industry have specific requirements, for example, robust job costing or point of sale?
• How big is my business? Do I really need the most expensive and complex solution?
• How fast is my business growing and what will my future requirements be?
• What features do I need? Basic bookkeeping and cash flow management? Or detailed business intelligence?
• What is my budget?
• What are my customers’ requirements? Will they expect that they will be able to communicate with me on social media? Will they want to shop online?
2. Look at your online options
These days, you don’t necessarily need to set up your own servers or buy software licenses. Instead, you can use free or affordable online offerings such as DropBox, Google Mail, and Office 365 for many of your business needs. You can even buy your accounting and payroll software as an online service for an affordable monthly cost. There is no more need to invest a lot of cash upfront in technology.
3. Going mobile
Mobility can have huge benefits for your business, and most SMEs know it. According to the Sage Business Index 2014 for South Africa, 50% of South African businesses use a tablet or smartphone to communicate with customers, suppliers or colleagues. And two-fifths say they spend more than a quarter of their working day on mobile devices.
You can give employees access to applications and data from any internet connected device, so they can be productive wherever they are. These days, most popular business applications offer slick mobile apps that enable you and your employees to keep working on the road.
4. Functionality, not frills
Many SMEs make the mistake of buying the Rolls Royce when they need the Toyota. So, be wary of buying an expensive solution with bells and whistles you may never use — rather look for something that is modular and that allows you to add in features if or when you need it. And make sure that the software takes care of basics — like local tax and labour law requirements.
5. Look at the supplier’s track record
It’s important to have good technology, but also check on issues like the support infrastructure, customer satisfaction, and local expertise when you buy an IT product or service. Some elements to think about:
• Does the vendor have local reference sites and experience in my industry?
• Is the provider familiar with the needs of smaller businesses?
• How good is its support and service?
• Does it give me flexible payment and deployment options, for example, a choice of on-premises installation or cloud solutions?
• Does the provider support modern needs like the cloud and mobility?
• Does the vendor understand the local market and localise its product for South African needs?
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