Current Edition >> Archives Section >> Spot Coverage >> November 2004
The Department of Trade and Industry is in a process of creating
a single small business agency which is to incorporate the national manufacturing
Advisory Centre Trust (Namac), under which Brain falls, and the Ntsika Enterprise
Promotions Agency. According to Lionel October, dti deputy director general,
“Better integration of small business support activity will be achieved,
and small businesses will have a single point of access for services on a local
level".
The new institution, the Small Enterprise Development Agency (Seda), is to be
fully operational by the end of this year. With a budget of R120 million, Seda
is to provide non-financial support to small, micro and medium-sized enterprises.
During the recent World Conference of the International Council for Small Business
in Johannesburg, October also gave a glimpse of government thinking about small
business finance. Three organisations are being groomed to provide different
kinds of finance for businesses:
* The Apex Fund will be tasked to provide micro businesses with loans of between
R300 and R10 000.
* Khula Enterprise Finance Ltd will cater for the range of between R10 000 and
R250 000, and
* The National Empowerment Fund will concentrate on loans of more than R250
000, up to the R1 million cut-off before the Industrial Development Corporation
starts looking at finance applications.
A survey done by the SA Internet Economic Study (SAIES) shows
that although the majority of companies surveyed are connected to the Internet,
the use of the Internet for e-commerce was still in its infancy in South Africa.
The most significant constraints are the cost of bandwith and a lack of knowledge,
as 89% of respondents had no Internet training.
The survey examined to what extent the SMME sector used the Internet to promote
its business, whether it was helping the sector to lower costs and operate more
effeciently, to what extent e-commerce was being implemented in business and
what needed to be done in future to make the Internet a more effective business
tool.
For purposes of the survey, the SMME sector was defined as having a yearly turnover
of less than R5 million and fewer than 200 employees.
Some 46,5% of SMME's surveyed had been operating for longer than 10 years and
30,7% had been in business between five and 10 years. SMME's employing fewer
than five employees accounted for 32,7% of the survey, while 24,5% employed
between five and 10 employees and 30,6% had between 11 and 50 employees.
On paper, the concept of using the Internet as a powerful tool of communication
and promotion seems logical. However, the survey results show a rather different
reality. There is an ever-increasing digital divide between established large
businesses and the SMME sector, which includes lack of knowledge, affordability,
especially with regard to the cost of bandwith and access to problem-free connectivity.
The survey showed that, contrary to the Internet levelling the playing field,
the SMME sector is being marginalised due to its lack of knowledge, high Internet
bandwith requirements and operating costs and not knowing who to contact for
assistance.
When companies were asked how dependent their business and its activities were
on the Internet as measured by turnover, the majority, 57% said they were less
than 10% dependent on the Interet and only 4% were more than 90% dependent on
the Internet.
Although 62% of respondents had websites, these websites were not being used
effectively as many were not updated on a regular basis, had no hit counter
and more than half were designed by the owners or friends. The data regarding
websites show that a minority of websites have a company profile (33%), information
on products (31%) and graphics (16%).
50% of companies said they had added more graphics, while only 4% said they
had changed, updated or added customer support on their websites. Websites should
be seen as one of many marketing tools to be used in promoting goods or services
and enabling e-commerce where necessary. Just as a company would not use the
same brochure every year, so too should the website be changed or updated regularly,
the survey suggests.
Part of the problem was highlighted earlier when respondents said that 37% of
them designed their own websites, while 14% had their websites designed by friends
or family. Some of the reasons given during the case studies for not updating
websites, were price and lack of time.
Recent reports that changes in the Companies Act will lead
to the scrapping of CC's has caused a marked decline in the number of CC's registered
by business owners, who are now registering more expensive (Pty) Ltd companies.
However, experts believe this is a mistake. Business owners should continue
to register CC's where appropriate. When the law is changed and CC's are scrapped,
existing CC's will simply be converted to the equivalent new entity, at minimal
cost to the business owner.
Says Douglas van der Merwe, manager of Swiftreg, a company that helps business
owners to register new businesses: "I would definitely still go for a CC.
It is never set in stone and you can always update it to a (Pty) company."
Chris Gouws, whose firm Shelf Company Warehouse registers just over half of
all companies in South Africa, agrees that business owners should continue registering
as CC's. When the law changes, CC's will automatically be converted to the new
entity.
Recently, a set of guidelines has been published for a major overhaul of the
Companies Act, under which (Pty) Ltd companies and CC's can be formed. Although
the guidelines are vague at this stage, it is likely that South Africa will
do away with CC's and have a single legal business entity, a (Pty) Ltd company.
South Africa is one of the few countries in the world that has two separate
legal entities for businesses: (Pty) Ltd companies for substantial businesses
and CC's for smaller ones. The advantage is that it is cheaper for an entrepreneur
to start off with a CC. A (Pty) registration is at least three times more expensive
than a CC registration. Unusually it costs about R360 to register as a CC and
R950 for a (Pty). On top of this, businesses who register as a (Pty) have to
pay annual auditors fees of more than R5 000.
The reason for doing away with CC's seem to be a need to simplify the enormous
Companies Act. The guidelines seem to recommend that, although South Africa
should end up with a single (Pty) Ltd entity, that business owners will be able
to choose different "levels". Cheaper (Pty) Ltd's will probably provide
the entrepreneur with less protection, and will also be less onerous to administrate.
Deputy Minister for Trade and Industry, Lindiwe Hendricks, says the new Companies
Act will be finalised "by the turn of the year". Van der Merwe believes
the process will take at least two or three more years, while Gouws says he
expects it only to make law in 2006.
The Financial Advisory and Intermediary Services (FAIS) Act
that recently came into effect had most business advisors and consultants worried
that they would be badly affected, having to requalify, write an exam and keep
all sorts of records and advice. However, the FAIS only applies to advice given
on investment products, such as insurance policies, endowment policies and investments.
Dawne Jefferson-Green, chair of the Institute of Business Advisors in South
Africa, says that if you are advising businesses on their operations and business
strategy, then you are largely unaffected by FAIS at this stage. However, once
you start to products being purchased, based on your advice, then you become
liable and accountable under the FAIS Act.
Thus, while there is some delineation, this can become very grey especially
if the role of the business adviser extends beyond the normal business and operational
advice. For example, if you come across clients with excess cash in their businesses
and you start advising them to put it into a money-market account, you could
be seen to fall under the obligations of the FAIS Act.
It is recommended that if you are unsure of your standing, it is best to consider
outsourcing that part of your consultation to someone who you know is suitably
qualified under the FAIS Act.
Die Kroonstad Besigheidskamer en die Moqhaka Plaaslike Munisipalitiet
het onlangs op 'n vergadering formeel besluit om 'n samewerkingsforum te stig.
Een van die projekte waarop besluit is, is om 'n inligtingsentrum vir Kroonstad
en omgewing, maar ook vir Viljoenskroon en Steynsrus, op die been te bring.
Dit sal as die “Kroonstad Chamber of Business, Tourism and Info”
bekend staan. 'n Kaart van Kroonstad en omliggende gebiede asook brosjures en
inligting oor gastehuise en ondernemings is van die produkte en dienste wat
die inligtingsentrum sal bied.
Daar word ook beoog om die webwerf www.kroonstad.city.co.za drasties op te gradeer.
Oor die algemeen is die gevoel dat die partye mekaar nodig het om werklike vordering
te maak in die ontwikkelings van die dorp en streek ten einde broodnodige ekonomiese
groei en werkskepping te bewerkstellig.
Deciding that the only way to overcome poverty and joblessness,
is to pull themselves up on their own bootstrings, the rural community of Klipfontein
outside Thaba Nchu has come up with an innovative land rehabilitation project.
After seeing rising unemployment within the small community of about 500 families,
the community of Klipfontein decided to take care of their land and get basic
training in preventing natural disasters like veld fires as well as problems
such as soil erosion. More than 250 community members in this village are depending
on farming.
Their efforts have been noticed by Free State Dept. of Agriculture and Land
Affairs, which entered into a partnership project with the community. The programme
launched by the Department aims to educate rural communities to manage their
resources and to empower and capacitate people with information and training
on how to face their challenges. An amount of R300 000 has been allocated over
the next three years for the project.
Great concern is being reported about the potential devastating effect on the
clothing manufacturing industry in the Free State and Northern Cape should arbitration
orders for enforcement of minimum wages and benefits be implemented. Both the
National Bargaining Council for the Clothing Industry and the Regional Employers
Organization of SA (REOSA) are favouring negotiations between all parties with
a view to arriving at a realistic solution.
Should arbitration orders be summarily executed, it could lead to more than
4000 job losses in the two provinces alone. Countrywide some 948 clothing factories
are registered with the Bargaining Council, all of which do not meet with the
stipulations of the Council. At Bloemfontein five factories are registered with
the Council, in Botshabelo, Thaba Nchu, Ladybrand and Ficksburg are altogether
45 factories and at Kimberley seven. Just about 99% of them do not comply with
statuary requirements.
One way out being taken by factories, many of which are Chinese, is to relocate
their businesses to Lesotho and Swaziland. Reportedly the industrial area at
Maseru has grown 300% the past year.
A new service from the Business Referral and Information Network
(Brain) for business consultants and business support organisations promises
to develop into the biggest online portal of business advisors in South Africa.
Brain is offering each of its more than 450 affiliated business development
organisations a website hosted on Brain's www.brain.org.za.
Each simple, brochure-type website can contain information such as services
offered, contact details, testimonials from satisfied clients, and the latest
news from the organisation. Brain is also offering training on how to maintain
and update a website to those affiliates who do not have the capacity yet.
Organisations that already have their own websites can link their brochure-website
on the Brain portal with their existing one, and so increase the traffic to
their site, while clearly associating themselves with the Brain-family of support
organisations.
Some of the Brain affiliates have already registered up to 3 000 visits on their
new websites.
Die Sentrum vir Ontwikkelingsteun aan die Universiteit van die Vrystaat (UV)
het onlangs 'n navorsingsverslag vrygestel oor die ekonomiese impak van die
internasionale sokker- en rugbywedstryde wat vroeër vanjaar in Bloemfontein
gespeel is, nl. Bafana Bafana teen die Kaap Verdiese Eilande en die Springbokke
teen Ierland.
Van die navorsingsbevindinge is die volgende :
• 'n Beraamde 10 800 sokkerondersteuners en 27 000 rugby-ondersteuners
was van buite Bloemfontein afkomstig. 14,4% van die rugby-ondersteuners was
vroulik en 85,6% was manlik. Vir die internasionale sokkerwedstryd was die persentasie
33% vroulik en 67% manlik.
• Die meeste sokkerondersteuners (35,8%) wat na die wedstryd in Bloemfontein
kom kyk het, was afkomstig van die Noord-Kaap. Die rugby-ondersteuners was meestal
afkomstig van Gauteng (21,8%) en die Vrystaat (18%).
• Wanneer sokkerondersteuners Bloemfontein besoek, spandeer hulle ongeveer
R912 per huishouding, terwyl rugby-ondersteuners dieper in hulle sakke delf
en ongeveer R1 807 per huishouding spandeer.
• Met die twee internasionale wedstryde is ongeveer R58 miljoen in Bloemfontein
spandeer. Rugby-ondersteuners was verantwoordelik vir die grootste gedeelte
van die spandering (R48 787 205). Die grootste gedeelte van hierdie geld is
op akkommodasie spandeer (R14 593 279). Sokkerondersteuners van buite Bloemfontein
het gemiddeld 1,4 nagte spandeer en rugby-ondersteuners 1,9 nagte.
• Die sokker- en rugby-ondersteuners is ook gevra om die kwaliteit van
diens te beoordeel wat hulle by hotelle, gastehuise, restaurante, vervoer- en
vermaakfasiliteite ontvang het. Die rugby-ondersteuners het die diens van hotelle
'n 3,9-toekenning uit 5 punte gegee, terwyl sokkerondersteuners 'n toekenning
van 4,6 gegee het.
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