Department of Small Business Development Incentives and Grants Unit - Black Business Supplier...

Department of Small Business Development

Incentives and Grants Unit - Black Business Supplier Development

Program (BBSDP)

Business Plan 2015/16

19/04/23

• DSBD Strategic Objective DSBD Strategic Objective

• Legislative, Policies and Strategis Legislative, Policies and Strategis

• Objectives/goals of the Incentives UnitObjectives/goals of the Incentives Unit

• Mission and Vision

• Unit Programmes Unit Programmes

• Black Business Supplier Development Program (BBSDP)Black Business Supplier Development Program (BBSDP)

• Cooperative Incentive Scheme (CIS)Cooperative Incentive Scheme (CIS)

• Youth, Women and People with Disabilities Business Youth, Women and People with Disabilities Business

Development Program (YWPWD)Development Program (YWPWD)

• Business Units Performance Plan Business Units Performance Plan

• Financial Plan Financial Plan

• Risks/Challenges/Areas of improvementRisks/Challenges/Areas of improvement

• Organisational Human needsOrganisational Human needs

• Key projects Key projects

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•DSBD Strategic Objective

To Create an enabling environment for the development and growth of sustainable small businesses that would ensure that they contribute to the creation of employment and economic growth

•The Incentives Unit Alignment to DSBD

To provide incentives programmes that promote broader participation in the mainstream economy by small businesses and co operative owned by individuals from historically disadvantaged communities and marginalised regions.

Departments Strategic Objective

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•The Public Finance Management Act of 1999 and amended •National Small Business Act of 1996 and as amended in 2004; •The Co-Operatives Act of 2013•Broad Based Black Economic Empowerment Amendment Act, 2013•The Integrated Small Business Development Strategy (2004)•The New Growth Path •The Industrial Policy Action Plan •National Development Plan •The DSBD 2015-19 Strategic Plan •The Medium Term Strategic Framework ( Outcome 4: Decent employment through inclusive growth)

Incentives Units Legislative, Policies and Strategies

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• Implement incentives that support employment creation and

support National Priorities

• Achieve an improved customer satisfaction

• Design and Implement Incentives programmes that support

sustainability of SMME and Cooperative, competitiveness, job

creation and equity

• Provide Post investment Support

• Build a strong organisational capability

• Build strategic business linkages that ensure mutually beneficial

partnerships

Functions of the Unit

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Vision & Mission:

To administer a set of incentive instruments which are meant

to stimulate and facilitate the development of sustainable,

competitive enterprises through the efficient provision of

effective and accessible incentive measures that support

national priorities ( Unemployment, Inequality and Poverty)

Rationale for Co-operatives Development

Unit Vision & Mission Unit

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UnitUnit Programmes

• Black Business Supplier Development Program (BBSDP)

• Cooperatives Incentive Scheme (CIS)

• Shared Economic Infrastructure Facility (SEIF)

• Youth, Women and People with Disabilities Business

Development Program (YWPWD)

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BRIEF BACKGROUND ABOUT BBSDP

•The current BBSDP was relaunched in 2010 in order to address

the constraints that many black-owned small enterprises faced

in participating in the mainstream economy.

•Start Date: 1 September 2010

•End date : 31 July 2017

•Program aligned with BBBEE policy

•Impact Study for 2 yrs. to be undertaken starting in the current

financial year


Unit

Black Business Supplier Development Program (BBSDP)

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BBSDP OBJECTIVE

•To fast-track existing SMMEs that exhibit good potential for

growth into the mainstream economy.

•To grow black-owned enterprises by fostering linkages

between black SMMEs, private and public sector entities.

•To complement current affirmative procurement and

outsourcing initiatives of corporate and public entities.

•To enhance the capacity of grant recipient enterprises to

successfully compete for corporate and public sector

procurement and outsourcing opportunities.


Unit


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BBSDP OFFERING

•Eligible Enterprises can receive an incentive grant value up to

R1 million

•The program provides grants to a maximum of R800 000 for

tools, machinery and equipment and;

• R200 000 for business development and training interventions

per eligible enterprise.


Unit


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COST SHARING STRUCTURE

•For Tools , Machinery and Equipments,

the BBSDP will offer a cost-sharing grant of 50% of the

approved costs of qualifying interventions, and approved

enterprises will contribute 50% of the necessary costs (for

business development services and training).

•For Enterprise Support Services interventions,

the BBSDP will offer a cost-sharing grant of 80% of the

approved costs of qualifying interventions, and approved

enterprises will contribute 20% of the necessary costs (for

business development services and training).


Unit


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QUALIFYING CRITERIA

•Predominantly black-owned (51%). •Have a predominantly black management team (50%).

•R250 000 to R35million annual turnover. •Operating or trading for at least one year.

•If operating for less than a year and or below the entry turnover threshold but has a valid tender or contract the applications may be considered at the sole discretion of the dsbd.


Unit


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EXAMPLES OF SOME OF THE INTERVENTIONS THAT HAVE BEEN SUPPORTED


Unit


ENTERPRISE SUPPORT

SERVICES (ESS) -

COST SHARING 80:20

• Quality management system and assurance (e.g. International Organisation for Standardisation (ISO), certification, accreditation, grading costs);

• Patenting and intellectual property rights;

• Production and productivity improvements;

• Product improvements;• BEE rating and certification;

and• Training

MACHINERY TOOLS AND EQUIPMENTS

•TLB’s •CNC machines , griding machines,•Brick making equipments•IT Servers •Graders

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Unit BBSDP APPROVALS 2011/12-2014/15

3368 BBSDP approvals to the value of R 1.3 billion since 2011 to date

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Unit

GEOGRAPHIC SPREAD 2011/12-2014/15

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Unit Sector Breakdown

APPROVALS PER SECTOR

2011 to 2015

Sector Number Value (‘000)

Construction 1174 R558 587Services 1051 R312 925Manufacturing 380 R148 449Retail 391 R110 929Agriculture 86 R31 298

Transport & Com 126 R48 359

Mining & Quarrying 73 R27 795

3688 1 29 342.00

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Total value of value of female owned enterprises is R 421 824

No of Approved Projects for the periods under review is 1154


BBSDP: APPROVED FEMALE-OWNED SMMES

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. Total value of claims paid over the duration under review is R 738 million vs Budget allocation of R 550 million

Virement of R 249 million

Cumulative Expenditure (Approvals) vs Disbursements over the duration under review is

Approvals R1,3 billion vs R 738 million


BBSDP Report on Jobs Supported 2011-2015

FY 2011/11 2012/13 2013/14 2014/15

Total 65 965

10425Jobs

Supported 6205 30789 18546

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BBSDP HIGHLIGHT PROJECT: EASTERN CAPE

Tourism Sector

•Mentor Guesthouse in Queenstown

•Approved for signage and branding worth R21 000

• Signage increased the number of drive-by customers which now accounts for 20% of all customers

• Increase in customers enabled the owner to create four new, permanent jobs from a total 11 permanent and 4 part time jobs


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BBSDP HIGHLIGHT PROJECT: WESTERN CAPE


NK CHARTERS

COMPANY BACKGROUND

Nonkululeko Charters was established and formed Mr Esa Yacoob in 2009

because of the love of boats. The company offers leisure boat trips V & A

Waterfront in the Western Cape. Popular routes include the Robben Island

tourist destination.

Other services that the business offers are: Leisure boat trips to , Private

chartered trips , School boat trips. The company received a grant through

BBSDP to the tune of R 848 500 to wards acquiring new faster engine, heat

exchanger and navigations system.

SUCCESS STORY:

Through the BBSDP grant approved for Nonkululeko Charters for, tools and

machinery to purchase, they were able to create jobs for previously unemployed

people. Currently they are standing at 13 from 7, meaning a 6 employee

increase. Turnover increased with R528, 532.00

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BBSDP HIGHLIGHT PROJECT: GAUTENG


The Kitchen and Cupboard Warehouse (KCW) COMPANY BACKGROUNDKCW is a professional woodworking company specializing in fitting store fronts and complex kitchen environments which they started in 1989 and operates from its own premises in Village Main in Gauteng. Their main clients are the banks and the general public. Received a grant to the value of R 821 100 for various wood working tools/equipment such as spray booth, panel saw, wheel feeder, spindle moulder etc.

SUCCESS STORY:Increase staff from 20 Staff members to 28 staff members. Planning to add 4 new employees when their turnover increases further. Turnover has increased from Feb 2014 to Feb 2015 by R914,655-00.Their entity was the first to have a truck spray booth in the motor industry and have used the equipment to service the Etekwini Municipality Tender.

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BBSDP HIGHLIGHT PROJECT: GAUTENG

SEZISIIZE t/a 5 STAR CARWASH

•Located in Mofolo Soweto•Started in 2008 by sole member Mr Thulani Msimango with 2 buckets and 3 tins of polish. The company has since grown to employ over 30 local youths and has opened a second branch in Naturena •The company has benefited R473 000 from BBSDP over 2 applications (R86 000 for marketing and signage as well as R387 000 for Equipment)

• Services offered include Fleet carwash, Valet Carwash as well as Executive Carwash.

• Mr Msimango Vision is to become a preferred service provider to insurance companies, local municipality and the public at large


BBSDP HIGHLIGHT PROJECT: SOWETO


The Kitchen and Cupboard Warehouse (KCW) COMPANY BACKGROUNDKCW is a professional woodworking company specializing in fitting store fronts and complex kitchen environments which they started in 1989 and operates from its own premises in Village Main in Gauteng. Their main clients are the banks and the general public. Received a grant to the value of R 821 100 for various wood working tools/equipment such as spray booth, panel saw, wheel feeder, spindle moulder etc.

SUCCESS STORY:Increase staff from 20 Staff members to 28 staff members. Planning to add 4 new employees when their turnover increases further. Turnover has increased from Feb 2014 to Feb 2015 by R914,655-00.Their entity was the first to have a truck spray booth in the motor industry and have used the equipment to service the Etekwini Municipality Tender.

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PROGRAM OBJECTIVE

•To improve the viability and competitiveness of a co-operative

by lowering the cost of doing business.

•To assist the co-operatives to acquire their start up

equipment.

•To build an Initial asset base for emerging co-operatives to

enable them to leverage other support. ELIGIBLE CRITERIA

•Incorporated and registered in South Africa in terms of the Co-

operatives Act of 1999.

•Emerging co-operatives with a majority black ownership.

•Have projects in any of the different economic sectors.

•Adhere to co-operative principles (have at least five members:

Be owned by a historically disadvantaged individual (HDI). Be

rural or semi-urban based.


Unit

Cooperative Incentive Program

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ELIGIBLE GRANT Qualifying enterprises are eligìble to receive a maximum of up

to R350 000 grant

Cost Structure is as follows:

• Matching Grant = 100%

• Maximum Grant R 350 000

• Minimum Grant R10 000

ELIGIBLE PROJECTS •Business Development Services

•Feasibility Studies /Market Research

•Production Efficiency

•Technological Improvement Projects

•Plant and Machinery: 60%

•Start-up requirement (discretion of AC)

•Working Capital (Opening stock-start ups): 40%


Unit

Cooperative Incentive Program

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PROGRAM OBJECTIVES

•The programme is aimed at supporting enterprises by stimulating

and encouraging Public and or Private sector investment through

efforts of lowering infrastructure costs.

•The programme intends to leverage both public and private

sector investment that would provide necessary infrastructure by:

creating an enabling environment for businesses to crowd-in

investment mostly in townships, rural areas and the inner city

where business activity is taking place PROGRAM OFFERING

•The programme is a 50:50 cost-sharing grant made available on a

reimbursable basis, where the dsbd makes a

contribution of 50% towards the qualifying infrastructure

project upon the completion of agreed milestones.

•The programme is capped at a maximum grant of R5 million (VAT

inclusive) per qualifying applicant.


Unit

Shared Economic Infrastructure Facility

(SEIF)

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Operations and Stake Holder Management Functions

•Function is to provide strategic and operational support to the Incentive Unit with regard to the facilitation, establishment, maintenance and growth of strategic partnerships for beneficiaries of dsbd offerings

•To provide support services to Incentives Unit on Reporting, Strategic and Business planning, Knowledge management, Governance, Risk, Compliance and Internal controls

•To facilitate the dissemination of information on DSBD incentives as well as provide business advisory services to potential and existing clients

•Strategic linkages targeted: Eskom Holdings Supplier Development Program, Transnet Supplier Development Program, Small Enterprise Finance Agency (sefa), Small Enterprise Development Agency (seda) and Isivande Women’s Fund.


Unit

Operations and Stakeholder Management Functions

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Product Development Functions

•To develop and review incentive programs to support the

National Development Plan (NDP), New Growth Path (NGP) and

sector strategies to address identified market failures.

•The product development function will cater for the

development of new incentive schemes as well as the review of

existing incentive programs within dsbd. The plans is as follows:


Unit

Product Development Support Unit

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Products Pipeline :


Unit Unit Programs

Incentive Program/ Project Description Type Status Project/ Purpose Miles stones and Completion Dates

1

Youth, Women and People with Disabilities Business Development Scheme (YWBDS)

Incentive ReadyIn progress

to provide support to youth, people with disabilities and women-owned enterprises in order to increase their capacity to access economic opportunities, enhance competitiveness and improve skills. with turnovers from R60k to R 500k

Q1-Ministers Guidelines Submission Approval, Board Members Appointment and Launch

Q2-Q4 implementing the program

2 Shared Economic Infrastructure Facility (SEIF)

Incentive Ready- In progress

As part of a process of continuing to strengthen economic development through broadening participation in the economy, a new robust programme is thus provided to unlock public and private sector investment by providing infrastructure that is critical and necessary to crowd-in investment mostly in townships, rural areas and inner city where there is clear business activity taking place.

Q1 Guidelines Approval and Launch Q2-Q4 – Implementing program

5 Informal Business Upliftment Facility

Incentive Conceptual Stage

IBUF is a 100% grant offered to informal and micro enterprises to assist them in improving their competitiveness and sustainability in order to become part of the mainstream economy with turnovers from Ro to R 60k

Q1 – Set up project team , Need Analysis - Stakeholder consultations , Draft Guidelines ,Ministers Guidelines Submission Approval Q2-Q4 – Implementing program

6 Cooperative incentive

Scheme

Incentive Amendment

To make Amendments to existing CIS program Q4 to be completed

8. Creative Industries Incentive Program

Incentive Conceptual Stage

To design and develop a new incentive program for the creative industries

Q1 – Set up project team , Need Analysis Q2 - Stakeholder consultations , Draft Guidelines Q3- Bench making with other countries Q3 – Ministers Guidelines Submission Approval

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Unit Unit Performance Plan

Programme 3: Enterprise Development And Entrepreneurship

Programme Performance Indicator

Audited/ Actual Performance

Estimated performa

nce 2014/15

Medium-Term Targets

2011/12 2012/13 2013/14 2015/16 2016/17 2017/18

Support number of Enterprises approved for the Black Business Supplier Development Scheme (BBSDP).

306 1212 1066 783 600 600 700

Support number of Enterprises approved for the Women Business Development Scheme (WBDS).

0 0 0 0 200 200 200

Support number of youth enterprises funded through the Youth Black Business Supplier Development Programme (YBBSDP).

0 0 0 0 200 200 200

Number of Primary Co-operatives receiving funding, training and access to markets.

182 314 243 270 214 683 822

Establishment and upgrading of shared economic infrastructure through Partnership Agreements with Provincial and Local Governments.

0 0 0 0 5 5 7

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Budget breakdown in terms of Programs and projects

Categories Allocated Budget R’000

Women Owned Business Owned Support Programs - Women incentive Program R 30 000

Youth Business Support Programs- Youth Incentive Program R 30 000Informal Business Support Programs

-Shared infrastructure Facility Program - Informal Business Incentive Program R 50 000

Black Business Supplier Development Program (BBSDP) R 113 000

Cooperative Incentive Program R 75 000

Micro Franchising Project R 2 000

Total R300 000

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Budget breakdown in terms of Programs and projects

Economic classification

Allocated Budget R’000

Compensation of employees R 19,292

Goods & services R 2,861

Transfers & subsidies R 300 000

Payment for capital None

Total R 322 153

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No Risk name/description

Current control

Impact

Likelihood

Actions to improve management of the risk

Action Owner Due date

1 Non performance of Supplier

Post investment inspections

High High Responsible Program Manager(s)

Continuous

2 Applicants and stakeholders defrauding the dsbd by submitting false information on applications and claims

Intense interrogation of each application and claim

High High Conduct regular inspections to applicants, Service Providers and Network Facilitators to verify information submitted by them.

Responsible Program Manager(s)

Continuous

3 Non performance of applicants

Submission of rapid assessment

High High Clients to show proof of payment of their contribution.

Responsible Program Manager(s)

Continuous

4 Slow Uptake of Applications for newly Launched Program-SEIF , -YWPDP

Develop road shows and Stakeholder sessions

Unit , Policy Units

All the four Quarters

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Workforce Profile according to Salary levels

Levels Filled Vacant Total New Additional

Deputy Director-General

Chief Director 0 0 1

Director 2 0 2 2

Deputy Director

6 0 6 4

Assistant Director

6 1 6 8

Personal Assistant

0 0 0 1

Level 1-8 29 2 30 15

TOTAL 43 3 46 31

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Applications and Claims Processing •Average turnaround times in the processing •The entire claims process is completely manual (NO IT Support)•Deliverable inspections can be only be conducted once a month for economic reasons not as and when claims are ready•Budgetary constrains (awaiting virements or transfers during the year) results in delays•The entire claims process is completely manual (NO IT Support)•Budgetary constrains (awaiting virements or transfers during the year) results in delays


Unit

KEY CHALLEGES FROM THE UNIT

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Description of the project

Total BudgetR’000 (In case of multi-year projects

Budget for 2015/16R’000

Period

Informal Business Upliftment Scheme - W& R Seta , MER Seta

R 50 000 R 000 2nd Quarter 2015/16 and on going

Youth and Cooperatives Projects -Installation of Solar panels in EC - National Youth Venture Capital Support Program

R 30 000 R 000 2nd Quarter 2015/16

Seda partnership and rollout CIS and YWBDS

R 000 R 000 June / July 2015/16 and no end date

IT Adaptation of IEMS Under DSBD

R 000 R 000 3rd Quarter 2015/16

Micro Franchising Project 5 projects

R2 000 R2 000 31 March 2016

Isivande Strategic Partnership

R 000 R 000 July 2015 partnership in place and ongoing

Sefa Strategic Partnership

R 000 R 000 July 2015 partnership in place and ongoing

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Department of Small Business Development Incentives and Grants Unit - Black Business Supplier...

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