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ESD Funds
- 1. 1 ESD FUNDS 04 September 2018
- 2. 2 What is ESD? Enterprise and Supplier Development (“ESD”) is not a South African concept, but rather a global movement that has proven its ability to stimulate economies, diversify supplier chains and create jobs In SA, it is the fifth and most significant element of the BBB- EE Codes and accompanying scorecards Its aim is to uplift EME’s (turnover <10mil) and QSE’s (Turnover 10-50mil) in corporate supply chains (SD) and general (ED) through financial and non financial support Effective ESD comprises of Growth Support and Programs as well as ESD Funding Corporates (measured entities) are required to achieve a minimum of 40% of the total targets of the 3 subcategories of ESD i.e Enterprise Development (ED), Preferential Procurement (PP) and Supplier Development (SD)
- 3. 3 ESD – Programs and Growth Support Consists of specific programs as well as generalist and specialist support Customised solutions (through individual diagnostics) are key to an effective Growth support strategy and Program Can be used as a spring board to investment readiness through interactive mentorship and planning Entrepreneurs should use this non financial support as a mean for developing a differentiated business model
- 4. 4 HEADERESD – Funding Access to Finance • Catalytic Funding (terms, collateral requirements, Support) • Catering to the missing middle • Growth business that are able to absorb gearing • Strong informed Teams with track record Access to Market • Corporate Supply chain integration • Preferential procurement from investee companies • Networking opportunity with corporates as well as peer investees Access to Skills • Rigorous post investment support strategies • Upskilling of entrepreneur and organisation through specific projects • Appointment of industry specific mentors and coaches
- 5. 5 Your Game Plan EDUCATE PREPARE EXECUTE • Identify ESD Service providers • Understand your business needs (Financial or Non financial) • Align yourself to applicable charters and accompanying corporates • Practice your Pitch • Understand your numbers and your differentiator • Get your pricing right • Make your list • Check your compliance and ensure your house is in order • Be and Think investment ready • Identify and approach the right stakeholders • Reach out to ESD Providers that are aligned to the corporate you want to or currently have access to • Ask questions and feedback to the ESD Funder and the corporate
- 6. 6 THANKYOU
Editor's Notes
- Where/how does what you do on a daily basis, fit into the broader ESD Framework? We work with SMEs to get them contract ready and skills ready. Our business is called Access and we aim to improve access to market and finance for SMEs. We do this by running ESD programmes for corporates. On a daily basis I manage a team of business coaches and specialists that are SME facing, also report back to corporate sponsors on the status of each of their programs. The challenge of the new codes is to get SMEs into corporate supply chains, the shift from ED to SD. It is difficult for an SME to: Find the right entry point into a corporate, Know when tenders are sent out, Register as a vendor, Price correctly, Pitch, Meet key requirements like SHEQ, A program can help with all of these. If you were an entrepreneur, knowing what you know about the Programmes and Growth support space: How would you use what’s on offer to benefit your business? I would use the programme to gain insights and skills on areas that I am weak at. If I am strong I can use the program to upskill my next level of management. The programme allows to network with other business owners Access to supply chain people from corporates. Other SMEs are potential customers. Through the people profiling I get to understand myself and my team better. SMEs can get feedback on why their proposals failed. What would you consider the 2 main challenges to successfully accessing the support offered? Capacity: As a small business I am stretched between sales and delivery and don’t feel like I have the capacity to grow myself, I am too busy working in the business rather than working on the business. Cashflow: I have a constant pressure to earn cash, and wonder if I will survive the next few months. This affects my mindset and energy levels and makes it difficult to focus on learning to be a better entrepreneur -the conflict between urgent and important. What are the practical solutions to these challenges? Capacity: Unfortunately no easy fix here, except for better prioritisation to focus on the activities that give you more bang for your buck-sometimes this means saying no to some tendering opportunities, and firing clients where margins are too low. If you understand your personality profile, you can also ensure that your next hire can help debottleneck you. Cashflow: The basics here-most entrepreneurs think that sales will take care of this. This is not true. You have to focus on invoicing, and collections as well. As an SME as corporates if they have a 7 day settlement for SMEs, make sure you have invoice details and format correct the first time. Once you submit and invoice, follow up whether it was received and whether it is correct. And follow up 7 days later on when payment will be done.