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4 ways big and small businesses can support each other
In South Africa, small businesses not only bring growth to the communities in which it operates. It also drives innovation. This is the view of Ravesha Govender, the eThekwini Municipality’s programme manager for the economic development unit.
She says, “Market access through localised transformation is one of the most effective ways we can empower communities. Big businesses inside these societies will automatically benefit on a number of levels.”
Her view comes amid the latest figures that small businesses in South Africa account for over 98% of the total number of businesses. They provide over one-quarter of all private sector jobs and almost 40% of the country’s GDP.
On top of that, 38% of SMEs in the country are owned by women, leaving little doubt that small business plays a big role in the economy and society. Govender believes that by supporting and nurturing small businesses, big business can create a pipeline of innovation and creativity into their own supply chains. Ultimately, they will contribute toward ongoing economic growth and sustainable development for themselves and society.
Furthermore, she believes that there are four practical ways in which big and small businesses can support each other.
1. Mutually beneficial partnerships
Actively seek commercial opportunities with promising SMEs that will benefit both the large corporation and the smaller supplier.
2. Skills transfer to small businesses
Whether in a partnership structure or running independently, mentorship and skills transfer is an invaluable aspect that will empower small businesses and, ultimately, benefit the economy as a whole. Furthermore, big business often overlooks the learning which comes through engaging with smaller businesses that are close to niche sets of customers and have unique solutions to problems.
3. Financial support
Often all an SME needs is a financial leg-up. This needn’t be a hand-out; it could be an investment or loan with preferential terms. As opposed to commercial banks, big businesses in the same sector as the SME have specific insights and can apply this knowledge to secure an advantage for all parties involved.
4. Industry innovation
Big business can tap into the vast creativity and innovation within SMEs by strategically developing and partnering with small businesses which are aligned with their growth strategy. In this way, big business remains on the cutting edge of innovations within their industry, and small businesses have the opportunity to demonstrate their potential and grow with larger role players in their sector.
Meanwhile, Meghan King, representative of the Durban Chemicals Cluster that facilitates a small business accelerator, has recently announced that applications for the 2022 intake are now open.
“This outstanding initiative is now in its fifth year and continues to effectively drive localisation and enable transformation with black industrialists. This is thanks to eThekwini Municipality and big business (including FFS, H&R, NCS Resins, Sherwin-Williams and SAPREF) who support the programme and are the potential customers the SMEs will be pitching to.”
She explains that whilst the development of small, black-owned enterprises is a primary goal, big businesses benefits equally and the current funders for this cluster are eager to engage with all promising entrepreneurs so that they can help them take their enterprises to the next level and become suppliers to normally inaccessible corporates.
SMEs in this industry must apply online before Friday, 30 September 2022.
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