Corporate Interest, Enterprise Development

Seek social returns on enterprise development investments

29 August 2011

The focus on enterprise development (ED) is given impetus by the fact that companies can earn points on their BBBEE scorecard by supporting such initiatives.  But, says Jane Woodhouse, Business Development Manager at Tshikululu Social Investments, becoming involved in ED for the right reasons is more important than the pure financial contribution.

The BBBEE Codes are intended to benefit the country as a whole and not just the company being measured. Thus Code 600 seeks to incentivise companies that assist in reducing the high failure rate amongst black-owned businesses and that assist in job creation by supporting SME’s.

Compliance with the spirit of ED within BBBEE is then to look beyond the narrow confines of your own company and supply chain relationships into the broader communities that are impacted by the activities of your company.

This means taking an imaginative approach to ED and identifying organisations providing services to businesses in whole communities  or groups of entrepreneurs as opposed to just those in its own supply chain.  Such ED support organisations may, for example:

1. Operate as walk-in centres, providing basic business facilities and training to unemployed people with business ideas;
2. Provide intensive support and training to “˜high-potential’ entrepreneurs who are identified through a rigorous selection process;
3. Operate as business hubs focussed on facilitate business plans for enterprises looking for financing at the micro level, or
4. Be a hybrid of the above models looking to handhold a business from micro stage through to full self-sustainability through intensive support plus access to funding.

There is space within the ED arena for all these approaches as they target different needs of SMEs.  Companies are at liberty to select the models they are most comfortable with and which have the best philosophical “œfit” with their business.  It similarly makes sense for companies to take a broad-based view of ED as a method of complimenting the targeted ED initiatives within their supply chains.

Let’s use this flexibility by remembering that ED support does not have to be limited to the usual commercially-focussed enterprises.  In a sense, the holy grail of ED from a social development perspective is to identify, fund and grow social businesses that are conceptualised with the primary purpose of delivering a social need and a secondary purpose of rewarding the business owners.

True social businesses and few and far between and should be nurtured and supported as fully as possible via the ED facilities that are available.  We can choose to let ED be empowering for many people and for its knock-on positive effects to reach through society. That’s a rewarding way to go.