MAKE SURE YOUR BUSINESS IS BBBEE FRIENDLY

This was Thursday's post.

Although most of us as SMME's are 'automatically' BEE compliant, it would be a good idea to have a look at this story and also perhaps get a copy of the Free download. For those of us who do not understand how to calculate the scorecard, this is valuable information.

Make sure your business is BBBEE-friendly
Jonathan Goldberg22 March 2007 at 06h00

The Broad-Based Black Economic Empowerment (BBBEE) Codes of Good Practice became law on February 9. They are designed to guide organisations in implementing the original Employment Equity Act (EEA) in their workplaces and they differ from the original Act. While the EEA requires organisations to set reasonable and achievable targets, the BBBEE Code sets the actual targets to be achieved by 2017. Organisations will need to synergise their strategic approaches to comply with Employment Equity and the implementation of BBBEE. Five- and 10-year targets have been set of which black women should make up 50 percent.

Along with the lack of finance, the lack of skills is most often cited as a primary barrier to BBBEE. The BBBEE Codes of Good Practice focus on the measurement of two components of skills development that are critical in ensuring sustainability - spend on skills development measured; and on the total number of learnerships and in-service training programmes. The targeted 3 percent spend on skills development excludes the 1 percent skills levy that organisations already pay over as part of the Skills Development Levies Act.'And, when arriving at the 3 percent, it must be remembered that the beneficiaries of skills development must be black persons. In respect of learnerships, these could be learners taken on formally through a Sector Educational Training Authority (Seta) or learners on in-service training programmes.

The target is to have 5 percent of the workforce on these programmes. There are also targets for preferential procurement. 50 percent (40 percent for Qualifying Small Enterprises) of the procurement budget must go to black-empowered suppliers in the first five years.' The BBBEE status of a supplier (and of your organisation) can be graded at one of the eight levels. This status will determine what percentage of the spend will be recognised as BBBEE spend. So, organisations will have to seriously embark on establishing the BBBEE status of their primary suppliers in order to gain an idea of their scores in this element.

The element of Enterprise Development on the scorecard generally refers to the financial and operational support that is provided to qualifying BBBEE organisations. The assistance must be quantified and is classified as either recoverable or non-recoverable spend. Enterprise development activities that create jobs and establish new business in South Africa will attract the most points. Many organisations have implemented excellent strategies in this regard that drive business value upwards. An example would be an organisation that outsourced the repairs of its hospital beds (once sold) to a black entrepreneur.

Socio-economic development refers to donations to predominantly (75 percent) black beneficiaries. Organisations are going to have to refocus their donations to ensure that they are directed at the right beneficiaries if they are to count for BBBEE score.

Jonathan Goldberg, is the CEO of Global Business Solutions. Contact him on 083-281-957 or johnny@iafrica.com

Organisations can gauge their levels of BBBEE compliance using an innovative programme called FreeBEE. It is a BBBEE pre-verification measurement tool developed by Global Business Solutions (GBS) in association with CB4 Business Resource Centre. FreeBEE will provide companies with a simple yet effective tool to conduct pre-verification calculations and produce reports based on the promulgated Codes of Good Practice for BBBEE. FreeBEE offers both the generic scorecard as well as the QSE (qualifying small enterprise) scorecard. FreeBEE is available for free download. Go to www.globalbusiness.co.za and follow the FreeBEE link. FreeBEE is also available on CD. Call 043-721-1030 for information.