Blindly donating a portion of your business’s hard-earned profits toward maintaining a glowing B-BBEE scorecard might ensure compliance on paper, but no contributor should be satisfied with simply ticking all the boxes. Your ESD contribution, representing the largest chunk of a business’s B-BBEE rating, is not meant to be a handout. It is set aside to help grow and develop potential suppliers into strong competitors that stimulate the economy and provide employment opportunities, and as any entrepreneur knows, cash-flow is just one ingredient to a successful business.
It is for this reason that Edge Growth has always maintained a commitment to the spirit of ESD, and not merely its requirements, as the approach that yields the best results. Any ESD supplier that your business chooses to work with must therefore have industry-specific experience and a firm knowledge of business incubation and development, if your funds are to create lasting and meaningful impact for your beneficiaries.
At Edge Growth, we ensure one of the industry’s highest ESD success rates through carefully planned alignment and synergy between our contributors and their beneficiaries. By pairing industry heavyweights with small suppliers in similar or adjacent sectors, our contributors can offer business development guidance and support – not just funding – that will ideally develop the supplier into a key part of the enterprise’s value-chain. For example, a software enterprise has little to teach a farmer or artisan about how to run their business, and even less to gain from their success. Small businesses fail, or fail to grow at the rate they would like, for many different reasons – lack of funds is only one among them.
In our years of experience in the South African SME market, we have identified four primary factors that lead to wasted B-BBEE budgets, that achieve little in the way of national development and entrepreneurial upliftment.