BEE RATING GOOD FOR BUSINESS'S CLIENTS

For the record - BEE is not as frightening as it appears at first glance. It's all about the numbers and it doesn't necessarily mean that you have to 'give' half of your business away to a previously disadvantaged person - there are other ways to make up the numbers.

So before you have a typical, 'knee jerk' re-action, take some time to do some research and find out what the requirements are and how you can make use of the points that assist you the most.

BEE rating good for business's clients
Network Reporter

17 January 2007 at 06h00

'The changing needs of the customer are important and, more importantly, how we respond to their changing needs determines our success or failure", asserts Delia Biljon. Biljon, a Durban-based businesswoman was commenting after her company, Delbi Promotions, a supplier of branded promotional items was announced as one of the first micro enterprises to be awarded a Level 4 BEE Empowerdex Rating in KwaZulu-Natal. The rating, she said, would not only be beneficial to her clientele, but also act as a gateway to additional business opportunities for the company.

Empowerdex, she added, was all about points: Companies are required to ask if the specified transaction will have an impact on BEE points. The scorecard takes into account the following factors: direct empowerment, equity ownership, management, human resource development, employment equity, skills development, indirect empowerment, preferential procurement, enterprise development, residual (corporate social investment) and preferential procurement. Additional points are scored if you purchase from companies that have a high BEE score. This preferential procurement, she said was added pressure on all companies to transform in terms of their supply. Enterprise development, an investment in another organisation, is designed to stimulate and promote entrepreneurship. This is also an indirect empowerment where companies will score points by using micro enterprises.

Biljon said: "As SMMEs, it isn't always possible to apply all the aspects of the scorecard. For instance, there are many small companies that do not employ any staff at all, so it has been suggested that they should be given their own scorecard." Government is suggesting a small enterprise scorecard, hinting at the possible exemption of the scorecard for micro enterprises. This indicates that an SMME scorecard will soon be implemented and that enterprises falling below the minimum in the National Small Business Act may be exempt from any form of BEE compliance.

There is even talk of exempting certain types of enterprises from parts of the scorecard. To qualify for the rating local micro enterprises must have an annual turnover of less than R300 000 per year. "This sector, however, is growing significantly. The Department of Trade and Industry is looking at increasing the annual turnover amount from R300 000 to R5-million, which means that many more companies will now be eligible for the rating," Biljon said. "Rated as a Level 4 Contributor by the Department of Trade and Industry, in fact, enables Delbi Promotions to obtain procurement opportunities," Biljon said. Gaining the BEE compliance, she added, further signifies a voluntary commitment that coincides with the objectives of the Department of Trade and Industry.

"Essentially, government now recognises that so many small businesses fail within the first two years of business, making it unfair in terms of the partnership with a "black" person as a mere compliance for the previous requirements. We are exempted until such time as we reach the soon to be R5-million mark where you are no longer categorised a micro enterprise," she added. Biljon has expressed relief on government's stance on those companies who are found guilty of "fronting", with several being handed over to the National Prosecuting Authority for a forensic audit. In addition to juggling motherhood and the daily activities of running her company, Biljon is proactive in several community social investment projects. Among them "Love the Babies" and a fundraising initiative for aged and underprivileged people. Funds were generated towards "Gogo bags" and little hampers created for first time moms and their new, respectively. Future projects include the donation of items for the Durban Children's home.