19th March 2013

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

BBSDP PRESENTATION @ SITA House, Observatory: Vuyo Zitha

INCENTIVE SCHEMES CLUSTER INCENTIVE SCHEME

BROADENING PARTICIPATION

• Black Business Supplier Development Programme (BBSDP)• Co-operative Incentive Scheme (CIS) • Incubator Support Programme (ISP)

COMPETITIVENESS INVESTMENT

• Sector Specific Assistance Scheme (SSAS)• Export Marketing & Investment Assistance (EMIA)

MANUFACTURING INVESTMENT

• Manufacturing Investment Programme (MIP)• Capital Projects Feasibility Programme (CPFP) • 12i Tax Incentive• Automotive Incentive Scheme (AIS)• Manufacturing Competitiveness Enhancement Programme

SERVICES INVESTMENT

• Film & Television Production • Business Process Services (BPS) • Tourism Support Programme (TSP)

INFRASTRUCTURE INVESTMENT

• Critical Infrastructure Programme (CIP) • IDZs (SEZ)

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Programme Overview

1 .BBSDP Objective

2 .Guidelines

3 .Contact Details

4 .Questions and Answers

Contents

OBJECTIVE:

To leverage the competitiveness of black owned enterprises and to broaden their economic participation by affording them access to affordable, quality business development services, on a cost sharing basis which are aimed at improvements in corporate governance, management, marketing, productivity and use of modern technology ( tools , machinery or equipments )

FOCUS:

The focus is on formal black owned enterprises, that have the potential or capacity to supply goods and services to public and private sector corporate, on a sustainable basis.

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

1. BBSDP Objective

To be eligible, enterprises should satisfy the following criteria:

• 51% majority shareholding• R250,000 to R35 million turnover per year• 1 year in operation & trading as a business• 50% management positions held by blacks

• VAT registered compulsory only for companies with annual turnover

+R1m

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

BBSDP Guidelines

• Qualifying enterprises are eligble to receive a maximum of up to R1m grant

• Enterprises will receive grant value of 30% for the previous year turnover

Cost Structure is as follows: • Max R800 000 being ring fenced for tools, equipment and machinery) –

50: 50 % cost sharing • Max R200 000 being ring fenced for business development services and

training – 80: 20 % cost sharing

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

GUIDELINES

ENTERPRISE SUPPORT SERVICES (ESS) &COST SHARING • Company diagnostics;• Business Plan to raise finance • Management information systems (including

production, sales, accounting software);• Quality management system and assurance (e.g.

International Organisation for Standardisation (ISO), certification, accreditation, grading costs);

• Patenting and intellectual property rights;• Production and productivity improvements;• Product improvements;• BEE rating and certification.

TRAINING SUPPORT (TS) &COST SHARING

• Business management (including planning, organising, finance, industrial relations, Human Resource (HR), business writing, business Information Technology (IT));

• Corporate governance (including roles/responsibilities of directors, line functions, conducting meetings, business ethics, compliance);

• Negotiating skills and techniques;• Tendering and contracting;• Mentorship and coaching.

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

GUIDELINES

Enterprises may apply for support in acquiring equipment under one of the following options :

Examples Illustrated

• Introducing a tool, machinery or equipment that will improve the entities productivity and competitiveness (eg. Deep Fryer, Grass Cutter Machine , Oven etc)

• To introduce a clean production process. • To secure a contract or tender for which the equipment is essential.• To attain a grading to qualify the enterprise for new or bigger work• To enhance growth or efficiency through the use of IT for business.

GUIDELINES

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

Excluded Interventions

• Office equipment, furniture and computer hardware costs, except for Business Process Services (BPS) applications;

• Land and buildings;• Working capital;• Training programmes that exceed five (5) weeks or one-hundred and sixty (160) notional hours;• Long-term formal training (e.g. a Master of Business Administration), including training at

accredited institutions such as universities;• Interventions that are already funded by another government scheme or parastatal;• Any other costs that the Adjudication Committee, in its sole discretion, deems as non-qualifying;

and • Design and printing of marketing material• Vehicles (sedan, combies, panel vans ,bakkies, trucks and trailers)

GUIDELINES

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

ISP

Incubator Support Programme

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Incubation Support Programme

 

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MARKET FAILURE• Low entrepreneurial base and start-up activities• Access to finance• Survivalist and informal sector• Youth unemployment

OBJECTIVES • Encourage private sector partnership with government to:• support incubators in order to develop SMMEs• nurture SMMEs into sustainable enterprises that can

provide employment and contribute to economic growth

ELIGIBILITY CRITERIA

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The applicant must either be a:

• South African registered legal entity • registered higher education or further education institution• licensed and/or registered science council. Qualifying incubators• New incubator / expansion of existing incubator• Offer physical and/or virtual incubation support services• A corporate incubator; a private investors’ incubator; an academic

or research institution incubator in partnership with industry• Incubators focused on establishing and/or growing enterprises that

will graduate to sustainable enterprises.

GRANT SUPPORT

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• 50:50 cost-sharing support for large private sector investors• 60:40 cost-sharing support for SMMEs• Capped at a maximum of R10 million per financial year over a 3

year period.

QUALIFYING COSTS (infrastructure and business development services)

• Business development services• Machinery, equipment and tools• Infrastructure linked to incubator (buildings, furniture)• Feasibility studies for establishing and expanding incubators• Product or service development• Information and Communication Technology• Market access• Operational costs

Framework for Proposal

• Executive Summary

• Business model of the incubator, target market & services

• Operational plan, including intake & exit strategies for incubatees

• Processes for monitoring & evaluating performance of incubatees

• Details of resources required to deliver on the services & control systems in place

• Financial information outlining funding structure & sources of funding

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Evaluation Criteria

• Management competency with business background

• Comprehensive project proposal

• Sustainability of revenue model proposed

• Extent to which partners are committed to & create market access opportunities for project arising out of the incubator

• Realistic exit strategy & post-incubation plan

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Contact Details

1. Kgolane Thulare: Director kthulare@thedti.gov.za

012 394 1794

3. Vuyo Zitha Assistant Director vzitha@thedti.gov.za 021 480 8059

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP)

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