The Craft + Design Institute (CDI) has raised R33 million to establish three funds to support SME growth – a Growth Fund, a Design Innovation Seed Fund and a Loan Book. These three funds will be managed by the investment arm, CDI Capital.
“In most countries, SMEs play a vital role as drivers of economic growth, innovation and job creation, but in South Africa this value is yet to be properly realised. To achieve this, the challenges experienced by SMEs need to be addressed, namely access to markets, finance and credit, infrastructure, resources for R&D, and access to adequately skilled and work ready labour,” explains Erica Elk, Executive Director of the CDI.
The funding’s aim is to create 60 growth-orientated SME’s and 20 innovation technological solutions, which in turn will create 600 permanent jobs over the course of three years.
“We have put a significant amount of work into developing these offerings, not only ensuring good governance and appropriate monitoring and evaluation measures, but realising real and sustainable impact with the businesses we support. We are excited to have raised R33 million to launch this new funding for SMEs, and we thank our funders and supporters – we look forward to making meaningful investments,” says Elk.
The Growth Fund
The Growth Fund is targeted at business with a turnover of assets of more than R1 million, with the ability to create permanent jobs. Applications for this fund open on the 27th November and close on the 31st of December 2017.
The Growth Fund invites SME’s that are experiencing growth or equipped for expansion and able to create sustainable quality jobs to apply for grant funding.
Criteria for the Growth Fund
- Controlling interest in the business (51%) must be a South African citizen with valid South African Identity Document or legal entities controlled by South African citizens with valid South African Identity Documents or permanent residents who hold a valid RSA ID document.
- All business operations must be conducted within the borders of South Africa.
- Must be an existing business, preference will be given to businesses that have been trading for two years or more. The business should operate in the craft, design and light manufacturing sectors, but other industries will also be considered.
- The business will need a turnover or assets of more than R1 million and a willingness to create permanent employment. It must demonstrate year-on-year growth and/or the potential for sufficient growth, while being tax compliant.
- The applicants business will need to create one permanent employee job per grant investment of R21 000 and prepared to contribute an additional 20% of the grant amount in cash to be used in the business.
For more information and further criteria visit here.
The Design Innovation Seed Fund
The Design Innovation Seed Fund is open to investors who have protectable innovative technological solutions that can impact specific sectors and create permanent employment. Applications for this fund open on the 27th of November and close on the 31st of December 2017.
This fund is available to individuals and SME’s with pre-revenue innovative technology and tech-enabled ideas and products within specific sectors to apply.
Criteria for the Design Innovation Seed Fund
- Western Cape based early-stage SME’s/entrepreneurs/researchers.
- Students at Western Cape tertiary institutions where the institution doesn’t have an Intellectual Property claim to the product/service. Please consult institution’s Intellectual Property policy.
- Pre-revenue businesses in incubation or entering incubation or existing SMEs with new products/innovation that is still pre-revenue.
Sector focus 2018/2019:
- Water Conservation
- Alternative Building Materials
- Wild Card* (*projects outside these sectors can be considered).
How to Apply for Funding
Click here for more on the criteria and further information visit here.
In addition to the grant funds, CDI Capital is also launching a R3.5 million working capital and term loan facility as reduced rates for the entire three year project. This will provide access to cash flow during the growth stages of SME’s that qualify for these funds and others.
For more information visit CDI Capital.
Improve Your Cash Flow: Manage Your VAT
Viresh Harduth, Vice President: New Customer Acquisition (Small & Medium Businesses) for Sage Africa & Middle East on the increase in VAT in South Africa and how it affects your business.
If you went shopping on 1 April, you likely encountered aisles and aisles of products with no price tags as retailers updated their shelf pricing to reflect the new VAT rate. As a consumer, this was probably a slight inconvenience because you didn’t know how much something cost until you had to pay.
Yet, as a small business owner, the VAT increase was more than a slight inconvenience. Not only did you have to update your systems and train your teams but you likely had to spend money printing new price tags and ensuring you were compliant – this was, after all, the biggest tax change in 25 years.
The VAT increase will also impact your cash flow because you will need to pay more money to SARS. But now that the dust has settled, Small & Medium Businesses have an opportunity to review their operations and uncover ways to improve their cash flow and offset the higher VAT payments.
Here are five ideas to free up cash that are easy to implement and don’t require major changes to your business:
- Negotiate extended payment terms with suppliers. When you receive an invoice, you generally have 30 days to pay. Try to negotiate longer payment terms with your suppliers – like 60 days – so that you have cash in the bank for longer.
- Enforce your own payment terms for customers. The time between issuing invoices and waiting to get paid is a danger zone for small businesses, especially when you need to pay VAT to SARS. Reduce your payment terms for customers from one month to 14 days, for example, and stick to it. Send regular reminders on overdue accounts and follow up on the phone.
- Incentivise customers to pay earlier. Offer various payment methods that make it easier for customers to settle their accounts sooner. Issue invoices promptly and offer discounts for early – and full – payment. This will also increase loyalty.
- Reduce stock on hand. If you have surplus stock, it means you haven’t aligned your stock with your sales, which ties up available cash. Stock management is as important as financial management. Knowing what’s in your stock room – and bank account – at all times, is crucial to maximise cash flow.
- Work with an accountant. While cloud-based accounting solutions like Sage can help you keep track of your cash flow and stay compliant, an accountant can identify areas to save money and cut costs, freeing up working and investment capital.
When you improve your cash flow, you reduce the need to rely on bank overdrafts and loans. The key to the success of any business is to free up as much cash as possible. And, with the VAT increase, you need more cash than you did yesterday.
*Remember, you have until 31 May to reflect the VAT increase in your product and service prices. Until then, you can apply the additional 1% at the till point, as long as you put up signs informing customers that you will be doing this.
R350 000 Worth Prizes To Help Boost Entrepreneurs’ Businesses
Find out more here.
Even more prizes to help entrepreneurs grow their businesses have boosted the entrepreneur competition being run by The Workspace and MiWay. These include communications strategy, responsive design website, a share portfolio worth R10 000 and estate planning.
The competition, launched in March to celebrate the collaboration between co-working and serviced office solutions company, The Workspace, and MiWay business insurance, is open to entrepreneurs based in South Africa, who have valid identification documents, who run a business with four or less employees and are making an impact in their industry.
The Workspace and MiWay have joined forces to launch an entrepreneurial hub and business development programme at the newly developed Village Road premises in Selby in Johannesburg’s central business district. MiWay’s presence at Village Road will afford The Workspace members the convenience of having business insurance and a host of other requirements fulfilled at their place of work whenever it suits them.
Entrepreneurship key to SA’s future
Mari Schourie, chief executive officer of The Workspace, says President Cyril Ramaphosa’s recent SONA reflected on how important small businesses and entrepreneurship is to South Africa’s future.
“I was thrilled that President Ramaphosa recognised how vitally important it is for everyone – business, government and citizens – to support entrepreneurs and small businesses. It is something that as a company, we’ve made a core part of our business. Being in the co-working and serviced office industry, we work with entrepreneurs and small businesses every day. They are the backbone of our business,” she said.
Schourie emphasised how the company had developed in-house programmes to support them. “When we can utilise their services ourselves, we do. We run workshops and knowledge hubs to encourage ongoing skills development and the joy of learning. We’ve even put some of our entrepreneurs at the centre of our marketing campaigns; we live and breathe the business lives of our entrepreneur members. And we learn from them too.”
Schourie said recognising entrepreneurs and small businesses sometimes means changing our thinking and looking a little bit further than our immediate surroundings. For this reason she believes the entrepreneur competition is so important to help give businesses a leg up.
Related: Register A Company In South Africa
The prizes – worth R350 000
The winning business will not only receive 12 months free office space for up to four people, free Wi-Fi, free phone rental, free business insurance and business advice, as well as all risk equipment insurance, free tea and coffee, free usage of meeting and board rooms, free security and 24-hour access, free parking and a new laptop, but even more valuable business prizes have been added too.
These include a brand new responsive design website and content management system, logo and corporate identity design, SEO and social media set up as well as training in how to keep digital collateral up to date worth R24 500.00 from Webartist.
Opulentus Wealth are offering the winner a bespoke share portfolio for the business worth R10 000, business life stage Risk Assessment, Estate plan for the Directors and shareholders valued at R15 000 per plan, Advice on managing and improving cash flow with the business (R10 000) and Tax advice for the business (R5000) Oxigen Communications will build the company a compelling brand communication strategy as well as offer two strategic sessions worth over R50 000.
“The entrepreneur competition is a call to action to those vibrant entrepreneurs out there. Start-ups always need a bit of a hand and the winner of this competition will have a serious advantage once the it has gone through its paces,” said Morné Stoltz, Head of Business Insurance at MiWay.
“We are looking for an entrepreneur who has created or is busy creating a special environment where employees can flourish, and in the process, potentially create more jobs. Stoltz adds, “An entrepreneur who makes an impression on the judges due to aspects such as the business’ social impact, attitude, positive entrepreneurial outlook and a good business mind will definitely stand a good chance of walking away with the prize.”.
The prize on offer – worth over R350 000 – will help set-up the winning entrepreneur for a period of 12 months, giving them a boost to help build their business.
Closing date: 15 May 2018
For details, click here.
For queries, please email email@example.com
Entries can be uploaded to the website, or delivered to One Chadwick Avenue, Wynberg, Sandton
Why Is It Important To Grow Manufacturing?
Manufacturing Indaba will take place at the Sandton Convention Centre in Johannesburg on the 19th and 20th of June, 2018 and will be facilitated with the collaborative backing and strategic partnership of the Department of Trade and Industry (the dti) and the Manufacturing Circle, a corporate association of manufacturers.
One of the aspects of the conference will be to focus on South Africa’s manufacturing as a fundamental driver of GDP growth and associated with direct employment, as many services sectors are likely to increase their employment capacity on the basis of an increased GDP.
Newly elected President Cyril Ramaphosa delivered his maiden State of the Nation Address (SONA 2018) and alluded to addressing the decline over many years of South Africa’s manufacturing capacity, which has deeply affected employment and exports. As a result, poverty levels have risen, economic growth has weakened, with the President stating that it has become imperative to re-industrialise on a scale and at a pace that draws millions of job seekers into the economy. Unemployment levels have risen due to looming investment downgrades; hence he emphasised the need for a focus on local manufacturing and production.
Nicholas Kaldor (Zalk, 2014) developed a set of hypotheses to explain the central role of manufacturing in the process of economic development. He contended that manufacturing reveals a unique characteristic: The capacity to generate ‘dynamic increasing returns’, displaying a positive correlation with GDP growth while other primary and tertiary sectors generally do not. That is, indicating that the faster the rate of growth of output in manufacturing, the faster the rate of growth of both manufacturing and economy-wide productivity (Thirlwall, 1983, as cited in Zalk, 2014). Thus, clarifying that manufacturing is the core driver of GDP growth and employment while other sectors, particularly many services sectors are only likely to grow on the basis of the growing demand derived and resulting from an increasing GDP. Therefore, growth and employment in most services sectors follow rather than lead growth in GDP (Zalk, 2014).
In accordance with the vital importance of this sector’s encouraged growth, the President undertook to promote greater investment in key manufacturing sectors through the strategic use of incentives and other measures. Accordingly, and further stimulating manufacturing by forging ahead with the localisation programme, through which products like textile, clothing, furniture, rail rolling stock and water meters will be designated for local procurement. Ramaphosa also reiterated that the country had spent more than R57 billion on locally-produced goods that otherwise might have been imported from other countries.
The Industrial Policy Action Plan (IPAP) 2017/18 – 2019/20 report as part of the National Development Plan (NDP) 2030 outlines sector specific goals and a vision for South Africa to be achieved by the year 2030 and referred to inherent structural challenges within the economy that remain difficult to overcome. These challenges include weak growth and domestic demand reflecting and contributing to persistent unemployment, resulting in unsustainable race and gender-based inequality and rural marginalisation. Value-add in manufacturing lagged behind the economy as a whole from 2008, and investment in manufacturing has declined since the global credit crisis. The IPAP report also indicated that investment as a share of GDP is also below the 25% level required for sustained economic expansion.
In light of this aspect, Ramaphosa at SONA referred to the special economic zones that will remain important instruments that SA will use to attract strategic foreign and domestic direct investment and build targeted industrial capabilities in order to establish new industrial hubs. He also emphasised that the process of industrialisation must be underpinned by transformation, and that through measures like preferential procurement and the black industrialists programme, a new generation of black and women producers will be able to build enterprises of significant scale and capability.
The objective industrial financing and incentive support has played a key role in supporting private sector investment and black economic empowerment in critical industrial areas. Another example and a high point of 2016/7 has been the Automotive Investment Scheme with R8.7bn on investment leveraged through 2 new projects with an estimated investment value of R548.9m, projected to create 1 140 jobs. Included in this buoyant mix is the Manufacturing Competitiveness Enhancement Programme (MCEP) which has reopened a R1bn loan component with 270 projects supported, and R8.24m disbursed thereby supporting R3.38b of investments & 62 2353 jobs.
Bearing these examples in mind, and Ramaphosa’s affirmation at SONA that, “…at the centre of our national agenda in 2018 is the creation of jobs, especially for the youth”, Philippa Rodseth, executive director, Manufacturing Circle (2016, in The importance of Manufacturing for SA’s economic growth), stated that in order to promote a resilient, sustainable manufacturing environment, three goals were identified in order to secure the long-term sustainability of South Africa’s manufacturing industry.
Hence, these following aspects will ultimately contribute to the economic growth of the country-: the achievement of a competitive manufacturing environment, the attainment of a supportive international trade position and the advancement of the reputation of SA manufactured goods.
These issues and other pertinent topics relating to Manufacturing in South Africa and the continent will be considered, evaluated and debated at the upcoming prestigious Manufacturing Indaba conference in June, in this year of “hope and renewal.”
Snapshots8 years ago
Habari Media: Adrian Hewlett
Start-up Industry Specific5 months ago
How Do I Start A Transport Or Logistics Business?
Snapshots10 months ago
27 Of The Richest People In South Africa
Types of Businesses to Start9 months ago
11 Uniquely South African Business Ideas
Entrepreneur Profiles5 months ago
10 SA Entrepreneurs Who Built Their Businesses From Nothing
Types of Businesses to Start6 months ago
10 Business Ideas Ready To Launch!
Lessons Learnt2 years ago
6 Of The Most Profitable Small Businesses In South Africa
Types of Businesses to Start7 months ago
The 10 Best New-Age Business Ideas You Haven’t Heard About Yet