The development and growth of small, micro and medium enterprises (SMME) is essential for the alleviation of the current unemployment crisis. This concept is accepted worldwide. However, knowing that something is the right thing to do and actually doing the right thing are two very different notions, especially in the corporate world.
Although most companies are started with profit making in mind, it is important to remember where one started and, once a success has been made of your enterprise, to assist those smaller businesses as much as possible. When Phase 2 Computers was started in 2001, my partners and I had no start-up capital and had to take a R150 000 loan on 14 days repayment terms just to purchase stock. As a small business, Phase 2 was greatly assisted by the suppliers that it did business with; suppliers gave extended terms for payment, marketing assistance was received through the supply of signage, assistance was given with regards to Phase 2’s shop-fitting, while product training and back-up support was also received.
Yet, despite the critical importance of small businesses, many companies remain ‘ín it for themselves’ – whether it be suppliers not allowing small businesses terms for payment or clients not making payment for work delivered on, this is a mind-set which needs to change. However, although there is a need for all able businesses to assist in small business development, a balance is absolutely critical. One needs to be aware of the fact that, in certain cases, giving too much leniency or assistance can put ones’ own business at risk. There needs to be a balance between giving back by helping small businesses in their growth and protecting your own business’ interests – operation at the middle of the spectrum and not at either extreme is essential.
Some businesses may in fact actually be negatively affecting the growth of small businesses – whether knowingly or without realising that they are doing so. In the IT industry, for example, Phase 2 has distributors that it purchases products from in order to resell to the end users in its target market. However, some time ago, these distributors sold directly to the target market, cutting Phase 2 out of the loop and therefore negatively affected business in a severe way.
When considering whether or not small business development is of value, perhaps it is worth pointing out the incredibly difficult economic environment all business owners face. Although Government is passionate about small business development, non-BEE companies are often left out of the loop when it comes to benefitting from this passion. In addition to this, banks are quick to penalise small companies, pulling the rug out from under their feet when they need the banks’ assistance the most and, in light of the current economic crisis, this is crippling. Had Phase 2 not been assisted by those companies that it did business with, who knows where the company would be today; with the limited help supplied by Government and the lack of assistance from the banks, it is only really business itself that can help small businesses in their growth.
The benefits of assisting small businesses are endless. Aside from the possible enterprise development points one can gain from such activity, being a part of assisting another person in making a success of their business, and in turn for them to be able to create employment opportunities is benefit enough. In addition, through assisting small businesses, close relationships can be built based on mutual trust and respect, resulting in a more amicable working environment for all involved. It is also, in many cases, much easier to work with small businesses as this usually involves a more personal relationship with the business, where one is often dealing with the managing director or CEO of the company. There is also less corporate red-tape to navigate your way through.
There are many ways in which to empower small businesses. Perhaps the most obvious form of empowerment is in the financial realm. For example, when big corporate suppliers provide small companies with price assistance when these small companies purchase goods from them for re-sale, this allows the small companies to make a better profit margin on the resale of those goods. Although this doesn’t necessarily apply to a great extent in the IT industry, mentorship can also be an invaluable tool in small business empowerment.
As a grateful once-small-business, Phase 2 considers small business development a necessity and it has become part of its company ethos. Phase 2 endeavours to assist small businesses through donations, such as supplying computer equipment to small start-up businesses free of charge and by offering add on services such as free delivery. Phase 2 is also happy to take on any and all clients without having a preferential customer policy in place.
The benefits which Phase 2 endeavours to provide all companies which it works with, especially the small businesses, are; a personal touch, a strong focus on service delivery, flexible terms and conditions and personal relationships while operating under the motto of ‘small enough to care, big enough to deliver’. If all businesses could provide such and other forms of assistance to small businesses, together a better economy and the reduction of unemployment can be achieved.