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Government Funding

Help With Accessing Enterprise Development Funding

Entrepreneurs develop simple business models for people with no access to finance.

Juliet Pitman

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It was while undergoing a BBBEE accreditation process for his marketing company, Leegra, that Lee Grant first hit upon the idea for Innovative Franchise Concepts (IFC). “I realised that so many companies struggle to spend their enterprise development funds, because they don’t have access to suitable beneficiaries and they lack the resources to mentor the development of sustainable small businesses,” he says.

Seeing a Gap

At the same time, he knew that there were thousands of small black-owned start-ups that desperately needed funding to help make their businesses sustainable. “There’s a guy across the road from our offices called Philemon Shusa who’d been running a small food stall from a gazebo, and we’d become friends. It seemed crazy that funds existed to help people like him, but he couldn’t access them and companies couldn’t access him,” says Grant.

Devising the model

He and IFC co-founder Shawn de Bruyn hit upon a solution that would help people like Shusa to grow their small businesses, while helping companies of all sizes to earn BBBEE points for enterprise development (ED).
IFC tailors a range of small business franchise solutions, and matches ED funding up with black entrepreneurs who become franchisees. Funds are channelled and managed independently by NEDA (National Enterprise Development Administrators), a non-profit organisation established for that purpose.

“Thanks to the inspiration provided by Philemon, the first of these franchise brands, Fast Forward Cafe, targets food street vendors,” says De Bruyn. Informal vending stalls are transformed into branded outlets in specially-designed movable units. Each vendor receives two daily deliveries from a distribution centre, courtesy of a driver who in turn owns his own business.

Win-win situation

“Fast Forward Cafe vendors benefit from strong infrastructural support, the power of a professionally marketed brand and access to all-important bulk buying power which they can never achieve as independent operators. This, together with a month-long business basics training course that teaches them to manage finances, stock, costing, staff and customers, can turn their businesses around,” says Grant. He’s been piloting the model with Philemon, whose business has seen a significant jump in turnover.

In turn, businesses benefit from being able to invest their ED funds in sustainable small businesses, run by hand-picked beneficiaries, with the back-up support of IFC. They receive monthly progress reports outlining their return on investment. “And because the funds are pooled, no amount of investment is too small. The opportunity applies to large and small business alike,” Grant concludes.

Landing a tender

The model has piqued the interest of the Metropolitan Trading Company (MTC), which recently awarded IFC a tender to help to formalise the street vending sector in the City of Johannesburg and upgrade the city streets in preparation for the 2010 FIFA World Cup.

Grant and De Bruyn are already planning the launch of other franchise concepts that will meet the ED investment needs of a range of industries and sectors. “There are no limits to the opportunities available,” Grant concludes.

For more information call +27 11 781 4502 or +27 83 379 1242, or go to
www.franchiseconcepts.co.za

Juliet Pitman is a features writer at Entrepreneur Magazine.

Government Funding

Government Funding And Grants For Small Businesses

Your much needed capital investment could come from government funding and grants. Here is a comprehensive guide to government funding available in South Africa.

Nicole Crampton

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Many new small businesses go through the struggle of finding capital to start-up of expand their businesses. Government funding and grants can be a worthwhile way to get the funds that you need.

There are a lot of important things you need to be aware of such as: Strict criteria, a lot of paperwork and maybe even a very long wait. It is worth it in the end so have a look and see which government funding and grants you qualify for.

What are government grants?

This is when a project or initiative is awarded government funding for some or all of its financial support. The business grants do not need to be repaid or accrue interest and have strict guidelines for application. Government funding is linked with efforts such as black economic empowerment, job creation and developing the economy.

Here is a list of some of the government grants available for business funding in South Africa:

Contents:

  1. Automotive Investment Scheme (AIS)
  2. Black Business Supplier Development Programme (BBSDP)
  3. Clothing and Textile Competitiveness Improvement Programme (CTCIP)
  4. Critical Infrastructure Programme (CIP)
  5. Film Incentive Programme
  6. Business Process Services (BPS)
  7. Capital Projects Feasibility Programme (CPFP)
  8. Support Programme for Industrial Innovation (SPII)
  9. National Youth Development Agency (NYDA)
  10. National Empowerment Fund (NEF)
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Government Funding

The Definitive List Of South African Business Incubators For Start-Ups

Are you looking for an incubator to ensure the sustainability of your start-up? This comprehensive list of South African incubators will set you in the right direction.

Nicole Crampton

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70-80% of small businesses don’t survive their first year, says Proudly South African CEO, Eustace Mashimbye, with only 9% surviving 10 years. Incubators were developed to reduce the chances of failure of start-ups by offering sustainable and fundamental entrepreneurial support.

Incubators enable entrepreneurs and innovators to find the necessary support and resources to build and maintain a successful start-up. An incubator can offer you:

  • A creative space to work out and discuss every aspect of your business
  • More resources and experience than you have when starting out
  • The opportunity to develop a network of other entrepreneurs and start-ups to sustain your business in the future.

“Getting involved with an incubator requires more than simply filling out an application. You need to get clear about which type of incubator would be the best fit. One of the most damaging mistakes a brand-new company can make is choosing one that doesn’t thoroughly meet its needs,” explains Nav Athwal, founder and CEO of RealtyShares.

Here are 58 South African business incubators for start-ups and what they can offer you:

  1. Global Cleantech Innovation Programme for SMEs
  2. Red Bull Amaphiko Academy
  3. Aurik Business Accelerator
  4. Transnet Enterprise Development Hub
  5. Injini
  6. The Techstars Foundation
  7. Anglo’s Zimele
  8. Shanduka Black Umbrellas
  9. SEDA Ekurhuleni Base Metals Incubation Programme
  10. BizQube
  11. Silulo Business Incubator
  12. Sw7
  13. Maxum Business Incubators
  14. Mpumalanga Stainless Initiative
  15. Edge Growth
  16. Smorgasbord
  17. MASDT
  18. Ignitor
  19. Timbali Technology Incubator
  20. Raizcorp
  21. OneBio
  22. SABizHub
  23. 88mph
  24. Enterpriseroom
  25. Chemin
  26. eKasiLabs
  27. New Ventures Studio
  28. Thomson Reuters Labs
  29. Seda Automotive Technology Centre
  30. eGoliBIO
  31. Meltwater Entrepreneurial School of Technology
  32. Seda – Agricultural & Mining Tooling Incubator
  33. Spark* South Africa
  34. Garden Route ICT Incubator
  35. Seda
  36. The Khayelitsha Bandwidth Barn
  37. Furntech
  38. Biofuels Business Incubator
  39. French Tech
  40. BioPark Business Incubator
  41. The Founder Institute
  42. Seda NMB ICT Incubator
  43. Tshimologong Precinct
  44. LaunchLab
  45. Softstart BTI
  46. RLabs
  47. African Rose
  48. The Grindstone Accelerator
  49. Riversands Incubation Hub
  50. mLab Southern Africa
  51. South African Renewable Energy Business Incubator
  52. Enterprise Elevator
  53. The Cape Innovation and Technology Initiative
  54. Endeavor
  55. The Awethu Project
  56. DACT
  57. The Creative Counsel incubator programme
  58. Green Pioneer Accelerator
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Government Funding

Investment Support For Black Business

Business development services to improve core competencies, managerial capabilities and competitiveness.

Monique Verduyn

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The department of trade and industry’s Black Business Supplier Development Programme is a cost-sharing grant, which offers support to black-owned enterprises in South Africa. The DTI contributes 90% of the cost of a project and the applicant 10%.

Objectives

The programme aims to fast-track existing SMMEs that exhibit good potential for growth, grow black-owned enterprises by fostering linkages between black SMMEs and corporate and public sector enterprises, complement current affirmative procurement and outsourcing initiatives of corporate and public sector enterprises, and enhance the capacity of grant recipient enterprises to successfully compete for corporate and public sector tenders and outsourcing opportunities.

Qualifying criteria

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The business must be majority black-owned (50 plus one share) and have a significant representation of black managers on the management team. The maximum annual turnover is R12 million per annum, and the business must have a trading history of least one year. Businesses can qualify for a grant to the maximum amount of R100 000. The requested amount should not exceed 25% of the entity’s previous year’s turnover.

To apply

Applications must include a detailed business plan, financial statements, turnover projections and a tax clearance certificate.

Contact

Go to www.dti.gov.za

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