Department of Small
Business Development
Incentives and Grants
Unit - Black Business
Supplier Development
Program (BBSDP)
Business Plan 2015/16
21/03/2016
Structure of the Business Plan
•
DSBD Strategic Objective
•
Legislative, Policies and Strategis
•
Objectives/goals of the Incentives Unit
•
Mission and Vision
•
Unit Programmes
•
Black Business Supplier Development Program (BBSDP)
•
Cooperative Incentive Scheme (CIS)
•
Youth, Women and People with Disabilities Business
Development Program (YWPWD)
•
Business Units Performance Plan
•
Financial Plan
•
Risks/Challenges/Areas of improvement
•
Organisational Human needs
•
Key projects
1
21/03/2016
Departments Strategic Objective
•
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.
2
21/03/2016
Incentives Units Legislative, Policies and
Strategies
•
•
•
•
•
•
•
•
•
•
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)
3
21/03/2016
Functions of the Unit
•
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
4
21/03/2016
Rationale
for
Co-operatives
Development
Vision & Mission Unit
Unit
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)
5
21/03/2016
Rationale
for
Co-operatives
Development
Unit Programmes
Unit
•
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)
6
21/03/2016
Rationale
for
Co-operatives
Development
Black Business Supplier Development Program (BBSDP)
Unit
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:
•
End date :
•
Program aligned with BBBEE policy
•
Impact Study for 2 yrs. to be undertaken starting in the
1 September 2010
31 July 2017
current financial year
7
21/03/2016
Rationale for Co-operatives Development
Black Business Supplier Development Program (BBSDP)
Unit
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.
8
21/03/2016
Rationale
for
Co-operatives
Development
Black Business Supplier Development Program (BBSDP)
Unit
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.
9
21/03/2016
Rationale
for
Co-operatives
Development
Black Business Supplier Development Program (BBSDP)
Unit
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).
10
21/03/2016
Rationale
for
Co-operatives
Development
Black Business Supplier Development Program (BBSDP)
Unit
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.
11
21/03/2016
Rationale
for
Co-operatives
Development
Black Business Supplier Development Program (BBSDP)
Unit
EXAMPLES OF SOME OF THE INTERVENTIONS THAT HAVE
BEEN SUPPORTED
ENTERPRISE SUPPORT
MACHINERY TOOLS AND
EQUIPMENTS
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
•
•
•
12
21/03/2016
TLB’s
CNC machines , griding
machines,
Brick making equipments
IT Servers
Graders
Rationale for Co-operatives Development
BBSDP APPROVALS 2011/12-2014/15
Unit
3368 BBSDP approvals to the value of R 1.3 billion since 2011 to date
13
21/03/2016
Rationale for Co-operatives Development
Unit
GEOGRAPHIC SPREAD 2011/12-2014/15
14
21/03/2016
Rationale for Co-operatives Development
Sector Breakdown
Unit
% Number of Project Per
Sector
40%
30%
20%
10%
0%
36%
% Value of Project Per Sector
45%
32%
12%
12%
3%
4%
2%
50%
40%
30%
20%
10%
0%
25%
12%
9%
APPROVALS PER SECTOR
2011 to 2015
Number
Value (‘000)
1174
1051
380
391
86
R558 587
R312 925
R148 449
R110 929
R31 298
Transport & Com
126
R48 359
Mining & Quarrying
73
R27 795
3688
1 29 342.00
Sector
Construction
Services
Manufacturing
Retail
Agriculture
21/03/2016
15
3%
4%
2%
Black Business Supplier Development Program (BBSDP)
BBSDP: APPROVED FEMALE-OWNED SMMES
TOTAL APPROVALS:
FEMALE-OWNED SMMEs
2011/12
No Approvals :120
Value : 35 668 428
2012/13
Approvals: 409
Incentive: R155 605 144
2013/14
Approvals: 375
Incentives : R130 092 000
2014/15
Approvals: 250
Incentives : R100 458
21/03/2016
16
Total value of
value of female
owned
enterprises is R
421 824
No of Approved
Projects for the
periods under
review is 1154
Black Business Supplier Development Program (BBSDP)
PROGRAM DISBURSEMENTS PERFORMANCE SINCE 2011
.
R291,500
R288,366
R 225,000
R129,400 R 125,000
R 95,000
R 105,000
 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
R28,400
2011/13
FY
2011/11 2012/13 2013/14 2014/15
Jobs
6205 30789 18546 10425
Supported
2012/13
2013/14
2014/15
Total
Budget
21/03/2016
Claim Paid
17
65 965
Black Business Supplier Development Program (BBSDP)
BBSDP HIGHLIGHT PROJECT: EASTERN CAPE
Tourism Sector
•
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
21/03/2016
18
•
Mentor Guesthouse in
Queenstown
•
Approved for signage and
branding worth R21 000
Black Business Supplier Development Program (BBSDP)
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
21/03/2016
19
Black Business Supplier Development Program (BBSDP)
BBSDP HIGHLIGHT PROJECT: GAUTENG
The Kitchen and Cupboard Warehouse
(KCW)
COMPANY BACKGROUND
KCW 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.
21/03/2016
20
Black Business Supplier Development Program (BBSDP)
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
21
Black Business Supplier Development Program (BBSDP)
BBSDP HIGHLIGHT PROJECT: SOWETO
The Kitchen and Cupboard Warehouse
(KCW)
COMPANY BACKGROUND
KCW 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.
21/03/2016
22
Rationale
for
Co-operatives
Development
Cooperative Incentive Program
Unit
PROGRAM OBJECTIVE
•
To improve the viability and competitiveness of a cooperative 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.
21/03/2016
23
Rationale
for
Co-operatives
Development
Cooperative Incentive Program
Unit
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%
21/03/2016
24
Rationale for Co-operatives Development
Shared Economic Infrastructure Facility
Unit
(SEIF)
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 crowdin 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.
21/03/2016
25
Operations
Stakeholder Management
Rationaleand
for Co-operatives
Development
Functions
Unit
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.
21/03/2016
26
Rationale
for
Co-operatives
Development
Product Development Support Unit
Unit
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:
21/03/2016
27
Rationale
for
Co-operatives
Development
Unit Programs
Unit
Products Pipeline :
Incentive
Program/
Project Description
1
Youth, Women and
People with Disabilities
Business Development
Scheme (YWBDS)
Type
Status
Incentive
Ready
In progress
2
Shared
Economic
Infrastructure Facility
(SEIF)
Incentive
Ready- In
progress
5
Informal
Business
Upliftment Facility
Incentive
Conceptual
Stage
Project/ Purpose
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
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.
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
Miles stones and Completion Dates
Q1-Ministers Guidelines Submission
Approval,
Board
Members
Appointment and Launch
Q2-Q4 implementing the program
Q1 Guidelines Approval and Launch
Q2-Q4 – Implementing program
Q1 – Set up project team , Need
Analysis - Stakeholder consultations ,
Draft
Guidelines
,Ministers
Guidelines Submission Approval
Q2-Q4 – Implementing program
6
Cooperative
Scheme
incentive
Incentive
Amendmen
t
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
21/03/2016
28
Rationale
for
Co-operatives
Development
Unit Performance Plan
Unit
Programme 3: Enterprise Development And Entrepreneurship
Programme Performance Indicator
Audited/ Actual Performance
2011/12
Support number of Enterprises
approved for the Black Business
Supplier
Development
Scheme
(BBSDP).
Support
number of Enterprises
approved for the Women Business
Development Scheme (WBDS).
Support number of youth enterprises
funded through the Youth Black
Business
Supplier
Development
Programme (YBBSDP).
Number of Primary Co-operatives
receiving funding, training and access
to markets.
Establishment and upgrading of shared
economic
infrastructure
through
Partnership
Agreements
with
Provincial and Local Governments.
21/03/2016
2012/13
Estimated
performa
nce
2014/15
2013/14
Medium-Term Targets
2015/16
2016/17
2017/18
306
1212
1066
783
600
600
700
0
0
0
0
200
200
200
0
0
0
0
200
200
200
182
314
243
270
214
683
822
0
0
0
0
5
5
7
29
Financial Plans
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 30 000
Informal
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
21/03/2016
30
Financial Plans
Budget breakdown in terms of Programs and projects
Economic classification
Compensation of employees
Allocated
Budget
R’000
R 19,292
Goods & services
R 2,861
Transfers & subsidies
R 300 000
Payment for capital
None
Total R 322 153
21/03/2016
31
Risks/Challenges/Areas of Improvement
No Risk
name/description
1
2
3
4
Current
control
Impac Likelihoo
t
d
Non performance Post
High
of Supplier
investm
ent
inspectio
ns
Applicants
and Intense High
stakeholders
interrog
defrauding
the ation of
dsbd by submitting each
false information applicati
on applications and on and
claims
claim
High
Non performance Submissi High
of applicants
on
of
rapid
assessm
ent
Slow Uptake of
Applications
for
newly
Launched
Program
SEIF ,
YWPDP
High
21/03/2016
High
32
Actions
to Action Owner
improve
management of
the risk
Responsible
Program
Manager(s)
Due date
Conduct regular
inspections to
applicants,
Service
Providers and
Network
Facilitators to
verify
information
submitted
by
them.
Clients to show
proof
of
payment
of
their
contribution.
Develop road
shows
and
Stakeholder
sessions
Responsible
Program
Manager(s)
Continuous
Responsible
Program
Manager(s)
Continuous
Unit ,
Units
Continuous
Policy All the four
Quarters
Organisational Resources
Workforce Profile according to Salary levels
Levels
Filled
Deputy
DirectorGeneral
Chief Director
0
Director
2
Deputy
Director
Assistant
Director
Personal
Assistant
Level 1-8
TOTAL
21/03/2016
Vaca
Total
nt
New Additional
0
1
0
2
2
6
0
6
4
6
1
6
8
0
0
0
1
29
2
30
15
43
3
46
31
33
Rationale for Co-operatives Development
Unit THE UNIT
KEY CHALLEGES FROM
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
21/03/2016
34
KEY PROJECTS
Description
project
of
the Total Budget
Budget for Period
R’000 (In case of 2015/16
multi-year projects R’000
Informal
Business R 50 000
Upliftment Scheme
- W& R Seta , MER Seta
Youth and Cooperatives R 30 000
Projects
- Installation of Solar
panels in EC
National
Youth
Venture
Capital
Support Program
Seda partnership and R 000
rollout CIS and YWBDS
IT Adaptation of IEMS R 000
Under DSBD
Micro Franchising Project 5 R2 000
projects
Isivande
Strategic R 000
Partnership
Sefa
Partnership
21/03/2016
R 000
R 000
R 000
June
/
July
2015/16 and no
end date
R 000
3rd
Quarter
2015/16
31 March 2016
R2 000
R 000
Strategic R 000
R 000
35
2nd
Quarter
2015/16 and on
going
2nd
Quarter
2015/16
July
2015
partnership
in
place
and
ongoing
July
2015
partnership
in
place
and
ongoing
THANK YOU
21/03/2016