Statistics reveal that five out of seven of South Africa’s new small businesses fail within the first year. This is one of the highest failure rates in the world, and indicates that something is fundamentally wrong with our entrepreneurial landscape. The impact of this on the country’s economy is massive.
Chief among the reasons for this high failure rate is that many individuals have limited education and training in the basic financial literacy skills it takes to make a business successful.
Without adequate financial knowledge, reaching the level where a business is both profitable and sustainable is near impossible. It means that business owners cannot devise proper plans that include budgets and timelines, battle to attract the right investors and adequate funding, cannot appropriately cost their products and/or services, and often do not comply with the rules and requirements of regulatory authorities such as SARS and CIPC. Unless someone helps them navigate these matters, most SMEs fail.
Enter the Enterprisation J.P. Morgan flagship project
Through the J.P. Morgan Enterprisation flagship project, 100 Gauteng SMEs will be selected to receive partially subsidised back office accounting support and financial training for a period of 18 months. The aim is to help them become sustainable businesses, and also to drive economic growth.
In addition, thanks to this project 50 unemployed, accounting graduates from disadvantaged backgrounds are currently receiving six months’ work readiness training through Guarantee Trust Corporate Support Services (PTY) Ltd. The training is aimed at helping graduates develop the soft skills, professionalism and technical know-how needed in an office environment. On completion of this training, the top 13 graduates will be selected to join the J.P. Morgan-Enterprisation project team for the duration of the project to service the accounting needs of the selected SMEs. The remaining graduates will be assisted with placement in other projects.
Mandisi Nombembe, Project Manager for Nation Building at SAICA, explains SAICA’s enterprise development and graduate employment model in more detail: “Since launching in 2013, Enterprisation has trained 270 graduates through the Guarantee Trust training programme – an initiative that has seen 95% of graduates placed in positions of employment upon leaving the training programme.
“The graduates who are retained by Enterprisation have gone on to support 121 SMEs around the country with crucial back office accounting support. We provide our clients with accounting, bookkeeping, taxation, business finance consulting, and company secretarial and registration services, so that the SMEs can focus on becoming sustainable businesses and creating jobs for others.
“With the assistance of J.P. Morgan, Enterprisation will now be able to help another 100 SMEs to do the same thing. In this way, our efforts to help eliminate poverty by creating employment opportunities and ensuring that from a financial management perspective small businesses are able to turn into real players in the South African economy, are really beginning to bear fruit.’
Hang Ho, Head of Global Philanthropy in Europe, Middle-East and Africa at J.P. Morgan adds: “At J.P. Morgan, we are committed to supporting small businesses and economic growth in the countries where we work. We believe SAICA is in a good position to do this owing to their role as a standard-setter for businesses in South Africa, and we are delighted to be working with them as part of our global efforts to help entrepreneurs access the support they need to grow and create well-paying jobs in their communities.”
Who can apply?
The key objective of the J.P. Morgan Enterprisation flagship project is to help SMEs reach the level of sustainability that allows them to drive economic growth and create employment. For this reason, SMEs accepted into this project will be measured against four key goals: compliance, revenue growth, profitability and employability.
To apply to be a part of the project, SMEs must:
- be owned by a SA citizen
- be successfully operating for a minimum of three years
- have an annual turnover of between R500 000 and R10-million
- be at least 51% black owned
- operate only in South Africa
- have valid tax clearance
- have a valid BEE certificate/affidavit
- be registered with the Companies and Intellectual Property Commission (CIPC) and have valid CIPC documentation
- have an active business bank account
- employ a minimum of two people (excluding directors and owners)
- not have an accountant at present
- not currently be a client of SAICA’s enterprise development entities
- be willing to attend SAICA-hosted training and workshops.
SMEs that operate in the top-performing industries in South Africa – namely ICT, tourism, infrastructure, agriculture, transport & logistics, manufacturing, media and entertainment, and education – will be given preference for entry onto the project’s shortlist.
How to apply
The application consists of two steps: an initial online application and, should the SME be shortlisted, a 15-minute pitch presentation to a panel of judges who will select the 100 SMEs that will take part in the project.
To submit your application, visit www.saica.co.za, click on the Enterprisation J.P. Morgan project banner, and fill in the online application form.
Online applications close at midnight on 15 January 2017. SMEs shortlisted for the project will be contacted by 18 January 2017 to set up a presentation to the panel during February.