Improving BBBEE Scorecard through Training and Entrepreneurship

BAYANDA BUSINESS ACADEMY

WWW.BAYANDA.ORG.ZA

INFO@BAYANDA.ORG.ZA

Presentation Outline• Introduction

• Purpose of presentation

•NEW BBBEE codes

• Skills Development

• Enterprise Development Proposal

Introduction

Ownership

Management

Skills Development

Enteprise and supplier

Development

Socie-economic development

IntroductionSkills Development Training accounts for 20% of the BBBEE score card

Enterprise Supplier Development accounts for 40%

These 2 element should be emphasised in an effort to improve your score card

Bayanda has what it takes to enable your company to have a comprehensive SD and ESD programme for maximum BBBEE points

BBBEE levelsThere are 118 possible points

Purpose of PresentationTo introduce Bayanda Business Consulting and Bayanda Business Academy as service provider for BBBEE Consulting and SETA Accredited Training Provider

To demystify BBBBEE codes as it relates to Skills Development (SD) and Enterprise Supplier Development (ESD)

To demonstrate how Bayanda Business Academy can enable your company to score maximum points on Skills Development points and Enterprise Supplier Development

Scoring Skills Development Points

BBBEE points

Compliance Target

Place EMPLOYEES in a learnership, apprenticeship or internship

4 2,5% of total employees

Train UNEMPLOYED black people 4 2,5% of total employees

Skills Development EXPENDITURE of black people learning programme

8 6% of leviable amount

Skills Development Expenditure of black people with disabilities learning programme

4 0.3% of leviable amount

An employee any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration (LRA)Excludes employees contracted under the Temporary Employment Services

Skills Expenditure Costs are refundable20% refund on Mandatory Grant from SETA of the TOTAL Annual Skills Development Levy paid to SARS. (Mandatory grants are a refund against all monies contributed towards the skills development levy and not on monies spent on training.

Discretionary Grant from SETA for employed black people on a learnership up to R18,000and R36,000 for unemployed learner per person

SARS rebates of up to R30,000 per learner

Terms and Conditions

Subject to the timeous receipt of a correct WSP/ATR by the SETA (30 April)

The learnership must be with an accredited service provider

The learnership must be registered with a SETA.

Skills Development ExpenditureTraining material

Trainers

Bursaries

Accommodation and Travel

Facilities, catering, venue hire

Course fees

Stipends (salaries) of black people on learnership

EXCLUDES sectoral training such as health and safety

Skills Development DocumentsWorkplace Skills Plan

Annual Training Programme

Pivotal report

Learning Programme Matrix

Training Tracking Tool

Accurate proof of expenditure

Bayanda Business Consulting: Skills Development

External Skills Development Facilitator

Develop a Workplace Skill Programme

Develop learning programme matrix

Design a learnership, apprenticeship or internship programme

Learning interventions for employed and unemployed black people including those with disabilities

Register your learnership with SETA

Track and monitoring report template

Conduct training in artisans and entrepreneurship

Assist you claim Mandatory Grant for doing training

Ensure you get minimum of 20 BBBEE points

Skills Development for Job Creation

70% of unemployed people are youth

600,000 of whom have a university degree

SMME employ 13,4 million South Africans

SMME contributed more than 2/3 of National GDP

Entrepreneurship is the main driver for job creation and economic growth

There is no college in South Africa which focuses only on teaching entrepreneurship, until now.

Training Programme

SETA Accredited

32 Unit Standards,

Marketing,

Managing Finance,

Business Plan,

Costing

MERSETA Accredited

in partnership with Majuba and

Welding

Carpentry

Plumbing

Brickmaking

◦ Entrepreneurship Training Pivotal Training.

Skills Programme 1.Entrepreneurship Course

Skills Programme: Procurement, Tendering and Costing

Skills Programme 3: Business Management and Leadership

Enterprise Supplier DevelopmentAccounts for 40 points

Minimum compliance target of 40%

Failure to reach 40% minimum results in score being dropped a notch below

It has 3 elements

a) Preferential procurement

b) Supplier Development

c) Enterprise Development

Enterprise Supplier Development•Supplier and Enterprise Development can only be done for 51% or more Black Owned Businesses;

•These 51% or more Black Owned Businesses must have a turnover of less than R50 million per annum;

•You cannot claim money spend on Supplier Development as money spend on Enterprise Development;

•Supplier and Enterprise Development can only be done on existing businesses;

•The spend on these two sub-elements must be quantifiable in a monetary value;

•There must be a formal written agreement between your business and the recipient of Supplier or Enterprise Development;

•The recipient must show its gratitude by means of a Letter of Appreciation

For Supplier Development you will have to spend 2% (1% QSE) of your nett profit after tax per annum and

For Enterprise Development you will have to spend 1% (1% QSE) of your nett profit after tax.

Amount Supplier Level Recognition Level

R25 000 1 1.35 * R25 000 = R33 750

R25 000 8 0.10 * R25 000 = R2 500

Total: R50 000 R36 250

Percentage of preferential procurement: R36 250/R50 000 = 72.5%

Value adding or Empowering SupplierRequirements for an empowering supplier are

• A “BBBEE compliant entity” (level 1-8)• Complying with all “regulatory requirements”;

and• A large enterprise (>R50 mil turnover) meeting

at least three of the following criteria or one if it is QSE(R10 mil to R50 mil turnover• At least 25% cost of sales (excl labour cost)

must be procured from local producers or suppliers in SA

• 50% of jobs created are for black people• At least 25% transformation of raw

material• Skills transfer-at least 12 days per annum

of productivity deployed in assisting Black EME and QSEs beneficiaries

Principles of ESD To strengthen local procurement in order to help South

Africa’s industrial base in critical sectors of production and value adding manufacturing which are labour intensive

To increase, strengthen and support procurement from black owned QSEs and EMEs allowing them an opportunity to participate in the mainstream economy

Increasing local procurement leads to job creation in South Africa

To promote the use of Black Suppliers and Professional Service Providers

To encourage measured entities to align their supply chain with enterprise development and supplier development

ESDThe measured Entity should develop a Enterprise and Supplier Development Plan that show

• Priority Intervention

• Key Performance Indicators

• Implementation Plan with milestones

• Bayanda Business Academy can assist you develop this plan

Examples of Enterprise Development• Provision of training or mentoring by suitably qualified

entities to beneficiary entities enabling them to increase their operational and financial capacity

Bayanda can be contracted to identify and train youth entrepreneurs

Maintenance of an Enterprise and Supplier Development Unit which focuses on support or beneficiary entities or candidates Bayanda to assist set it up

Payments made to suitably qualified and experience third parties to perform ED and SD on behalf of the entity

Bayanda is accredited and qualified to perform this

Other ESD costsLoans, discounts, credit facilities to beneficiary entities

Direct cost incurred in assisting development of beneficiary entities

Overhead costs attributable to ESD contributions

Preferential credit terms

Facilitating access to credit

etc

Short term Proposal for Enterprise Development•Bayanda has a SETA accredited course on entrepreneurship which

can be used to train unemployed black youth comprising of women and people with disabilities.

•The entrepreneurship course includes business registration, tax clearance certificate and BBBEE certificate

•The graduates from the course become suppliers to your company and create own jobs. Scoring 2 bonus point.

•They can supply groceries, PPE, stationery etc

Recommendations for ESD1. request all your suppliers for BBBEE

certificate.

2. Use my spreadsheet to audit your Procurement spend.

3. Calculate your 1% and 2% NPAT value

4. Outsource your ESD Programme for Bayanda to run and manage

GET ON WITH RUNNING YOUR BUSINESS!

80% of procurement should be on a VA supplier

Red Seal PlacementAccredited as a Temporary Employment Agent

Placement

Screening, vetting of candidates

Verification of Trade Certificates

Accredited by QCTO of SAQA

Thank you!