Facing a youth unemployment rate of 25%, government is looking towards entrepreneurs and SMEs to create the jobs that are so dearly needed.
In order to do this, Riversands Incubation Hub CEO Jenny Retief says, corporate South Africa needs to come to the party by making a conscious decision to incorporate more small businesses into their supply chains.
“It’s well-documented that small businesses are the biggest job creators and it’s time for corporates to actively engage with entrepreneurs and small businesses they support, help them scale their business and share in their successes by using their products or services,” she says.
Relief unpacks the seven ways corporate SA can give SMEs a leg up:
Give SMEs favourable terms
Corporates have the advantage of size on their side, so why not leverage it for the benefit of small businesses?
Corporates can give SMEs a ‘break’, as it were, by charging small business-owners bulk prices for items bought in small quantities that don’t usually qualify for a discount.
Pay on time
One of the biggest challenges entrepreneurs face is cash flow problems that arise from clients who don’t pay on time.
Be clear about what you expect from the deal upfront to avoid any crossed wires down the line and give SMEs reasonable deadlines.
There’s nothing worse than sugar-coating feedback to SMEs, you’re not doing them any favours and more than anything else, you’re robbing them of the opportunity to do better next time not only for you, but for the other clients they service.
Be brave, honest and specific in your feedback, but don’t forget to affirm the things at which they are excelling , Retief advises.
Fund SMEs wisely
“Funding is not a silver bullet to an entrepreneur’s growth challenges, but a smart entrepreneur with a marketable business plan and the discipline and determination to put in the work can post growth figures well upwards of 300% in the year after they raised capital. These are the entrepreneurs you need to support,” says Retief.
Buy from small local businesses
The National Small Business Council runs the annual Small Business Friday campaign, which encourages consumers and corporates alike to buy from local entrepreneurs.
READ MORE: Helping small businesses stay open
It shouldn’t take an annual day for us to play our part when it’s something we can do on a small scale on a daily basis.
Sponsor an SME
Corporate sponsorship partnerships can make or break an entrepreneur. “At Riversands, the process is managed, from recruitment to implementation. Each rand invested is tracked, with continuous monitoring to ensure that funds are allocated correctly. Economies of scale ensure that expenses are reduced and impact is maximised,” Retief says.
Fund a reputable incubator hub
Going through an incubation programme will significantly impact the lives of entrepreneurs, as the four pillars of support (infrastructure, marketing, growth and learning and back office support services) provide them with the best shot at success.