Small businesses in South Africa account for over 98% of the total number of businesses. They provide over one-quarter of all private sector jobs and almost 40% of the country’s GDP. On top of that, 38% of SMEs in South Africa are owned by women, leaving little doubt that small business plays a big role in our economy and society. By supporting and nurturing small businesses, big business can create a pipeline of innovation and creativity into their own supply chain, and ultimately contribute toward ongoing economic growth and sustainable development for themselves and society.
According to Ravesha Govender, Programme Manager: Economic Development Unit at eThekwini Municipality, small businesses contribute further by bringing growth and innovation to the community in which the business is established. “Market access through localised transformation is one of the most effective ways we can empower communities. Big businesses inside these societies will automatically benefit on a number of levels.”
Here are four ways that big business and small business can support each other:
1. Mutually Beneficial Partnerships: Actively seek commercial opportunities with promising SMEs that will benefit both the large corporation and the smaller supplier.
2. Skills transfer: Whether in a partnership structure or running independently, mentorship and skills transfer is an invaluable aspect that will empower small businesses and, ultimately, benefit the economy as a whole. Furthermore, big business often overlooks the learning which comes through engaging with smaller businesses that are close to niche sets of customers and have unique solutions to problems.
3. Financial Support: Often all an SME needs is a financial leg-up. This needn’t be a hand-out; it could be an investment or loan with preferential terms. As opposed to commercial banks, big businesses in the same sector as the SME have specific insights and can apply this knowledge to secure an advantage for all parties involved.
4. Industry Innovation: Big business can tap into the vast creativity and innovation within SMEs by strategically developing and partnering with small businesses which are aligned with their growth strategy. In this way, big business remains on the cutting edge of innovations within their industry, and small businesses have the opportunity to demonstrate their potential and grow with larger role players in their sector.
Meghan King, representative of the Durban Chemicals Cluster that facilitates a Small Business Accelerator, has recently announced that applications for the 2022 intake are open. “This outstanding initiative is now in its fifth year and continues to effectively drive localisation and enable transformation with black industrialists. This is thanks to eThekwini Municipality and big business (FFS, H&R, NCS Resins, Sherwin-Williams and SAPREF) who support the programme and are the potential customers the SMEs will be pitching to.” She explains that whilst the development of small, black-owned enterprises is a primary goal, big businesses benefits equally and the current funders for this cluster are eager to engage with all promising entrepreneurs so that they can help them take their enterprises to the next level and become suppliers to normally inaccessible corporates.
SMEs in this industry are advised to apply before 30 September 2022 using this link: https://durbanchemicalscluster.org.za/business-accelerator-2/. Any queries can be directed to accelerators@bmanalysts.com.
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