Financial services group Standard Bank’s supplier development programme has noted an average increase of 38% in the turnover of black-owned small and medium-size enterprises (SMEs) since its inception.
“Conducted over 12 months, this leading-edge programme – incorporating 22 black-owned small businesses – has resulted in a marked improvement in the fortunes of most of the businesses, says Standard Bank franchising and enterprise development head Simone Cooper.
She adds that when Standard Bank started the programme, the objective was to assess the businesses’ activities, provide skills development where required and ensure that they were equipped to ensure development into the future. Achieving this required interventions that entailed education on traditional business skills and helping the companies broaden their customer base to reduce reliance on a single large corporate client for their continued existence.
Standard Bank notes that the process began with a review of the businesses’ turnover of previous year and an assessment by an independent agency to establish whether the business offerings and structures were sustainable. The gaps in business practices were identified and the companies were prepared for the intensive programme, which relied primarily on practical workplace assistance rather than classroom teaching.
The companies were assisted in setting up processes and systems, record keeping, establishing effective human relations practices and skills development. Guidance was also provided in terms of accounting and performance was continually monitored, as all participants had to complete monthly reports, highlights Standard Bank.
“Turnover growth is regarded as a key indicator for startup and early-stage companies, as it provides a measure of business momentum, which has an impact on all other business systems.
During the reporting period, it was found that turnover increased by 38% across the portfolio of participating businesses. Although from a low base, one exceptional achiever had a turnover increase of 814%. What was most encouraging was the creation of an additional 593 jobs,” she explains.
Cooper points out that, like their counterparts (those that are not part of the programme) in the South African SME sector, the businesses in the programme are also vulnerable to the problems in the sector. The entrepreneurs in charge of these businesses realise early that, although enthusiasm is essential to success, there is no real substitute for business skills and disciplines.
“Although some of the companies were not as prosperous as others, the overall results achieved were significant. What was underlined was that those entrepreneurs who participated fully in the process, worked with specialist staff and took full advantage of the advice and support offered were the most successful,” Cooper points out.
Other major milestones included some companies increasing their representation across several geographical regions, using the learning opportunity to identify and implement new product pipelines to help grow the business and restructuring their business focus to take advantage of new or diversified opportunities.