Current Edition >> Archive Section >> Special Features >> March 2009
Uniglobe New Dawn Travel based in Bloemfontein was recognised as one of the best emerging service providers in South Africa, when it was awarded early this year runner-up in the Free State leg of the 2008 national ETEYA competition.
The Emerging Tourism Entrepreneur of the Year Awards (ETEYA) is aiming at recognizing and promoting black-owned Small, Micro and Medium Enterprises (SMME’s) within the tourism industry.
In 2008, the ETEYA project was boosted by the addition of SA Breweries (SAB) as a primary partner, bringing injection of R1,9 million to the initiative.
According to Chris Meyiwa, Enterprise Development Manager at SAB, the aim of the ETEYA project is the creating of jobs and ensuring an authentic African experience to tourists.
To this end, the ETEYA competition is open not only to accommodation establishments, which have won most of the awards to date but also to cultural villages, game reserves, restaurants, tourist attractions (excluding community projects), adventure products, conference centres (not attached to accommodation), tour operators, travel agents, car rental companies, coach operators and tour wholesalers.
Says Hanneli Slabber, Manager: Product at SA Tourism: “The awards are not only a way of identifying some of the ‘unsung heroes’ in their efforts, but an excellent opportunity for them to get the support they need to transform their futures in the tourism industry”.
It is against this backdrop that in the 2008 finals of the ETEYA competition, Uniglobe New Dawn Travel headed by MD Tshebi Mofokeng was in the Free State runner-up in second place.
Pictured at the award ceremony for the 2008 ETEYA competition held on 21 January 2009 at OR Tambo International Airport, Tshebi Mofokeng of Uniglobe New Dawn Travel as runner-up, on the extreme right, together with, from left, Nolwandle Mashiane (Epozini Guest House), Moeketsi Mosola (CEO of SA Tourism), Mathoto Tlokotsi (De Home Ekhaya Guest House) and Chris Meyiwa (SAB).
During the tenure of office of the Board of Directors of the Free State Development Corporation, (FDC), serving from 2005 to 31 January 2009, a number of key cornerstones were put into place, ensuring a durable legacy as regards future development of the SMME sector in the Free State.
The highlight of the 2006/07 financial year was the amendment of the Free State Development Corporation Act, 1995 (“the FDCA”) with effect from 25 August 2006. Most significantly, Section 3 was amended to provide that the “main objects of the Corporation shall be the promotion and development of Small, Medium and Micro Enterprises” (SMME's)
The Board set about repositioning the FDC so that the corporation could focus on its core mandate of the promotion and development of SMME's. A comprehensive Strategic Plan effective from 2007 to 2010 was implemented, while an organizational structure was adopted to execute this mission.
Interventions done, included the appointment of senior and middle management personnel to steer the FDC through its repositioning processes, while offices in all five municipal districts of the Free State namely, Motheo, Thabo Mofutsanyana, Fezile Dabi, Lejweleputswa and Xhariep, were established in order to bring FDC services closer to communities.
The FDC furthermore made loans more accessible to small businesses by offering below prime interest rates, extending the repayment grace period, relaxing security, collateral and own contribution requirements and shortened loan approval period. Entrepreneurs who settle their accounts early, are rewarded with substantial discounts.
The SMME budget was increased from R33 million in the previous financial year to R78 million in the 2006/07 financial year. The SMME budget was exceeded by R40 million. As at end of the year, 179 loans to the value of R118 million were approved.
156 Loans were approved in the financial year 2008/09, which amounted to R133 million. Of the 156 loans, 75 were women owned projects and 67 loans were for youth owned projects.
A key policy instrument introduced by the FDC, was the relaxation of requirements for funding of SMME's, which sought to enable more entrepreneurs to join the economic mainstream of the country. Policies were put in place to ensure that SMME's with viable business plans were not unduly prejudiced by historical disadvantages relating to security and collateral. Equity funding was offered to address the above.
The result of these policy interventions was a significant increase in the number of new entrants in the small business sector. The FDC went into joint ventures with 14 small businesses which were unable to contribute the necessary collateral to establish their businesses.
Among the highlight of this Board's tenure, was the SMME Conference hosted by the FDC in Bloemfontein in 2007. The conference created a structured approach towards SMME development through commitment of budget allocations by development and finance institutions towards specific SMME programmes.
Subsequent to the conference, a number of strategic partnerships were struck between the FDC and ABSA, FDC and Umsobomvu, as well as working partnerships with the Small Enterprise Development Agency (SEDA) and the National Productivity Institute (NPI), which assist ailing enterprises through turn-around strategies.
During the current financial year 2008/09, the FDC has approved 54 SMME loans to the value of R61 million, of which 27 are women owned enterprises and 23 are youth owned businesses. One project funded to the tune of R5 million is for a disabled person.
In July 2008 the FDC launched the SMME Incubation Programme, marked by the signing of the historic Cooperation Agreement with the National Small Industries Corporation (NSIC) of India. The FDC Business Park Revitalization Programme, named Kganyang Project, was launched in support of this programme.
Six unemployed B Comm graduates were recruited from Thabo Mofutsanyana and Motheo Districts. They received Micro-MBA training in order to provide business skills training and support to FDC business park tenants.
FDC participated in the Enablis FNB 2008 Business Launch Pad Competition, through a special provincial competition that is linked to a National competition which had among other partners, the FNB, Business Times and SEDA. The FDC participation in the Free State leg brought specific added focus and opportunities to Free State entrepreneurs and SMMEs. The adjudication on the Enablis Business Plan Competition for the Free State was completed and 20 winners who are prospective SMMEs were awarded certificates. The winners also qualified to be entered into the National Competition, which took place on 22 January 2009 in Johannesburg.
The following three Free State SMMEs were awarded first prizes in the national leg of the competition and will receive financial support from FNB:
Agricultural sector:
Kabelo Tsimatsima, Thaba Nchu: Famadaus Dairy
Kabelo has 22 years of hand-on farming experience and serves as chairman of the Thaba Nchu Farmers ' Union and the Free State Rural Committee. As an enterprise Famadaus plans to produce a range of branded dairy products to the highest standards, while ensuring affordability to the local market. By employing and training local labour and practicing ecologically sound farming methods, Famdaus aims to set the standard in community-based dairy farming.
Personal services:
Steve Mahopo, Welkom: Daylight Vision Optometrists
The mission of Daylight Vision Optometrists is to provide optometry services and products to an under-serviced and neglected market through a mobile clinic. The services and products include diagnosis of visual problems, prescription and provision of spectacles, advise on proper eye care, prescription of eye drops as well as referral to specialists.
Tourism:
Mosidi Modise, Bloemfontein: Your Own World Properties.
This is a guesthouse situated in the upmarket suburb of Heuwelsig, offering luxury accommodation for up to 20 guests, a conference facility and hosting corporate events, like press conferences, year-end functions, product launches, etc.
The remaining 17 provincial winners will receive Business Development Service Support to prepare them for funding in the next financial year.
The term of the outgoing FDC Board was not without its fair share of challenges, which included two consecutive adverse audit reports. These were based on technicalities relating to the ever-changing financial reporting standards, GAAP, which saw the FDC receiving a qualified audit in the 2006/2007 financial year report. A disclaimer in the following year, 2007/2008, was as a result of subsidiaries of the FDC having their financial year-ends at different times to the FDC itself. Their audited financial statements could therefore, not be included in the annual financial statements of the FDC.
The FDC Board and Management nevertheless, came to an agreement with the auditors that a pre-audit will be conducted to ensure that these compliance issues will be addressed in time for the annual audit.
The leadership of the FDC wishes to express its gratitude to the Department of Tourism, Environmental and Economic Affairs for its unwavering support during the term of office of this Board. The Board also wishes, most importantly, to express appreciation to the people of the Free State for the opportunity to have served them.
On the photo: At the media briefing hosted by the FDC announcing the Enablis winners, pictured, from left, Messrs GEM Mapena (CEO of FDC), Thabo Khunyeli (HOD of Tourism, Environmental and Economic Affairs), Steve Mahopo (Enablis winner), TMS Matang (outgoing Chairperson of the FDC Board), Mss Trish Kabi (outgoing Deputy Chairperson of FDC) and Mosidi Modise and Mr Kabelo Tsimatsima (both Enablis winners).
In a series of special reviews in the Free State Business Bulletin, Seda Free State will feature its developmental role in each of the five districts. Xhariep, Thabo Mofutsanyana, Fezile Dabi, Lejweleputswa and Motheo. This first instalment kicks off with the Xhariep District.
Of the five districts in the Free State, the Xhariep District with 2.8 % contributes the lowest to the provincial GDP. In Xhariep. agriculture is the major contributor to the economy, followed by the government and service sectors. As the SMME sector in general contributes at least half of any developed or developing economy, also in Xhariep the SMME sector is regarded as holding the key to any meaningful economic growth and addressing the high levels of unemployment and poverty.
It is against this background that Seda Free State, through its provincial office in Bloemfontein and its district office at Trompsburg, has commissioned a baseline study into the SMME sector in the Xhariep District. The information obtained from this study may facilitate a collaborative approach towards SMME development programmes of municipalities and SMME support organizations in the district.
In conducting this study, a literature review was first done to put the Xhariep SMME sector into perspective . A questionnaire survey among 86 respondents was conducted during August and September 2008 to gain understanding of the extent and nature of the small-scale business sector in Xhariep and to identify areas of weakness. The outcome of this was utilized to analyze SMME needs and to make recommendations for promoting SMME growth and development in the district.
Profile identified
The study found that the highest concentration of small businesses in Xhariep is in the food and beverage, travel and leisure and retail sectors. Within these sectors, most SMMEs operated spaza shops, hairdressing or bed and breakfast establishments. More males than females run small businesses. Most of the respondents were in the 30–45 age group and more than half have matric. They commonly operate without dedicated business premises and/or trading licenses, but many indicate that they are registered.
Reasons for starting small businesses are either to generate an income or because entrepreneurs have a passion for a particular activity. They speak mostly Afrikaans, with English and Sotho as the other languages.
Skills levels
Presenting a tender, writing a business plan and using computers were indicated as the skills that the SMMEs do not possess and would most like to acquire. Financial management is a skill that some small-scale entrepreneurs possess, but nevertheless wish to improve. The three skills they regard as the most important in business are financial management, using computers and bookkeeping. Tendering is not high on the priority list of skills to be acquired, as they do not know how to tender or can not use it in their line of business.
Support
More than half of the respondents regard government's support for SMMEs as insufficient, and consider that government should consult more with small business owners and should take more 'concrete action' to support them. Many recommendations were forthcoming from the respondents, with the majority being a request for funding assistance, skills training and information sessions close to their place of residence or business about available support. A list of small business support organizations in the Free State was compiled from a desk study.
Advancing business
The respondents regard having a people-friendly personality and offering good service as the keys to keeping regular customers happy. Advertising and word of mouth are regarded as the best ways to attract new customers. Respondents regard talking to other people about their businesses as important, but having a matric qualification is not seen as contributing to business success. They find time management, negotiation, record keeping, planning and organizing easy and are not concerned about handling cash, dealing with employees or handling risks in their business.
Managerial aspects
The study found inter alia the following: Most stock is bought weekly or monthly and collected by the owners from the suppliers. Customers’ preferences determine which stock to buy and how much to buy. Stock is bought from the cheapest supplier.
Bed and breakfast establishments cater for tourists, while the other small businesses cater mainly for the local market, or rather the local community, which are the regular customers to which they give discount. They do not really display stock in a special way to attract customers. Damaged stock and theft are amongst the problems they experience. Stock counting takes place to see if it matches their daily sales or else this is done on a weekly basis.
Their premises are visible to customers. Signboards are favored as an advertising medium. More than half do not accept returns of goods. Most respondents use their savings to start their businesses and with the income they earn pay business expenses and try to save monthly to expand.
Some have a budget and keep sales records, but not much other record keeping is taking place. Few have staff, and if hiring staff, these have to meet requirements such as being honest, reliable and hardworking or having business skills specific to the industry. Tasks and responsibilities are delegated if the owner is absent or if minor decision is required. Staff gets trained for a specific job. Most of the respondents motivate staff with a bonus or simply by complimenting staff.
Less than half of the respondents plan daily. They do, however, have plans for expanding or growing the business within the next year. They keep up with business trends by reading newspapers or magazines or watching television. Only some of those that are computer illiterate use the Internet or e-mails. Money is either banked or put in a safe. Few of the respondents manufacture the products that they sell.
Training
Most respondents are able to leave their businesses to attend training. Most workshops previously attended were presented by Seda on business management, which assisted them to obtain information and knowledge and to become empowered in growing or managing their businesses.
Business management and marketing training was favored by respondents. They indicate that training should be related to the specific type of business and be practically applicable. Workshops should cost between R100 – R200 per day, last no longer than five days, with between 10 – 20 people per workshop. Their expectations are to obtain information and knowledge and to become empowered.
SMME implementation plan
The report discusses detailed actions that are required to implement a SMME capacity building strategy, with a focus on the facilitation of skills acquisition and contains recommendations for a realistic short- to medium-term implementation plan, linked to timeframes and budget requirements.
Concluding comments
The information contained in the report could assist the Xhariep District Municipality and the local municipalities in the district to develop realistic SMME development plans, which should include strategies to ensure that the municipality's line departments include SMME development and participation as core principles.
It was found in the study that a collaborative approach towards SMME development by the municipality and SMME support organizations is essential, as it will allow the strategic partners to set joint targets and to avoid duplication of efforts.
SMME database
A database of the respondents taking part in the study was compiled according to town and economic sectors.
Basothong Brickmaking
The owner of Basothong Brickmaking, Mr Motlalepula Mafa, operating from Zastron in Xhariep District, was using a manual machine to manufacture bricks and this negatively affected his output and profit.
Mafa then approached Seda Xhariep for assistance, which conducted an assessment with the relevant tools. The client was also given Basic Business Skills Training which was offered by Seda and IDC. Afterwards, a business plan was compiled and subsequently submitted to the FDC.
The result was the approval of a loan of R150 000, which enabled Basothong Brickmaking to purchase the necessary machinery and enter a new phase in the expansion of its business.
The contact numbers for Basothong Brickmaking is 051 673 1401 or 076 635 9310
Unique Hair Salon
Unique Hair Salon as the only structured hair salon in Trompsburg, came into being through the initiative of Ms Ethelin Mantshiyane. In order to penetrate its target market, the business was in need of effective promotional material.
Mantshiyane approached Seda Xhariep and a website and large window posters were created as marketing tools.
These proved to work well and the salon is steadily growing in popularity, generating an average income of R 1 150 per day. At present, mentorship, financial management system and technical training of staff are Seda interventions being taken up with the client.
The contact number for Unique Hair Salon is 083 461 3258.Unique Hair Salon
Unique Hair Salon as the only structured hair salon in Trompsburg, came into being through the initiative of Ms Ethelin Mantshiyane. In order to penetrate its target market, the business was in need of effective promotional material.
Mantshiyane approached Seda Xhariep and a website and large window posters were created as marketing tools.
These proved to work well and the salon is steadily growing in popularity, generating an average income of R 1 150 per day. At present, mentorship, financial management system and technical training of staff are Seda interventions being taken up with the client.
The contact number for Unique Hair Salon is 083 461 3258.
Uhlosi Guesthouse
Uhlosi Guesthouse, based at Trompsburg, is owned by Mr. Thabo and Ms. Nomakhosazana Panyane. As a start-up business, Uhlosi Guesthouse did not have anything in terms of ensuring visibility and attracting customers. Panyani approached Seda Xhariep for assistance, which subsequently conducted an assessment applying the relevant Seda tools.
The development of signboards was one of the recommendations. Seda Xhariep installed one full colour double-sided light box and three full colour double-sided signboards. These enhanced visibility of Uhlosi Guesthouse to the extent that Panyane reports the business is gradually growing in terms of sales.
Moreover, six jobs have been created for individuals from historically disadvantaged backgrounds.
The contact numbers for Uhlosi Guesthouse is 051 713 9329 or 083 382 4194
Nxqito Funeral Services
The owner of Nxqito Funeral Services based at Trompsburg, Ms. Suzan Nxqito, needed finance to stay in business. The enterprise did not have equipment of its own, though it was receiving premiums from existing clients.
Nxqito approached Seda Xhariep and was consequently assisted with a business plan using SBAT, while Seda facilitated funding from Jobs for Growth was obtained.
The client was then in a position to purchase the necessary equipment for her funeral services business and to proceed to develop it in accordance with the business plan.
The contact number for Nxqito Funeral Service is 071 108 6332.
Kwajola Trust Poultry Farming
This enterprise was established in 2004 on a farm in the Springfontein district presented by the SA government to Mr Petrus Bango and others as trustees under the name of the Kwajola Trust. These trustees planned and launched a poultry development project.
In order to enhance the corporate visibility of the project, the Kwajola Trust approached Seda Xhariep for guidance and assistance. The result was that after due investigation and consultations, professional signage was erected as one of the means to raise public awareness about the poultry project and its products on offer.
This has notably benefitted the poultry project in terms of increased turnover and profitability.
The contact number for Kwajola Trust Poultry Farming is 072 897 9395.
Kgatelopele Pottery
Kgatelopele Pottery, a co-operative operating at Smithfield led by Ms. Nthabeleng Tsatsi, was experiencing a challenge to access its target market.
The business then approached Seda Xhariep for assistance. An assessment was done with the client using the relevant Seda tools.
Subsequently Kgatelopele Pottery attended on invitation by Seda, the 2008 Macufe exhibition as well as the Asia + Expo in Bloemfontein. The result was that orders to the value of R 10 990 were received, while cash sales of R1 190 were generated. This put the business on a path towards sustainable viability.
The contact number for Kgatelopele Pottery is 051 683 0923.
Staff profile of Seda Xhariep
The Seda Xhariep District office is headed by Oupa Kale as Branch Manager, assisted by Matlakala Moshodi (PA/Receptionist), Lehlohonolo Thekiso (Business advisor / Mentor), Ramabilikoe Mosola (Billy) (Business advisor / Mentor), Mamosebi Molaodi (Data Capturer), Nomsa Ntulini (Information Officer) and Michelle Johannes (General assistant).
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