Or does it not perhaps highlight the harsh realities of small business as being an extremely competitive environment where only a few really achieve success and the majority only survive? Read the rest of this entry »
It is substantially more difficult to prove that a business, which is about to be started, will in fact be successful. Such a venture has no historical audited financial statements reflecting a good profit history. Funders of such ventures are by nature extremely suspicious, and always look for some form of concrete evidence that a start-up business venture will succeed. Read the rest of this entry »
With this view of your value-based strategy, and an ‘as-is’ assessment of the seven key dimensions of transformation, you are now equipped to consider three core questions in order to bring transformation into your strategy. Read the rest of this entry »
From a business perspective, it is useful to focus the efforts of all employees around these value drivers. Every employee should know how their role contributes to the overall value of the business and how they can increase this value while containing or reducing costs. The resulting focus of the company’s resources around these simple (but not simplistic) issues allows the business to have a constant dialogue on how to achieve their goals, and strategy becomes a living reality rather than a dead document in the CEO’s filing cabinet. Read the rest of this entry »
One of the biggest problems with BEE initiatives is that they become one person’s responsibility, and one person cannot change an organisation. Read the rest of this entry »
Again this is a principle that applies exclusively to measuring ownership contributions. The principle has many different names, such as “one time all time”, “high water mark” and “continuing consequences”. When companies first started engaging in BEE, before there were standard measurement principles, they made the assumption that once they had sold a BEE stake, they would be able to recognise this contribution to BEE regardless of whether the BEE party remained in the investment or not. Read the rest of this entry »
A common misperception of ownership is that it relates to economic return exclusively. When ownership is broken down it includes two primary rights. The one is economic return and the other is control, or influence, over decision making, which is exercised through voting rights. Read the rest of this entry »
The net value calculation is broken down into two formulae and draws from the deemed net value result above. The first, Formula A, calculates the debt-free ownership as calculated above, as a percentage of the targeted debt-free ownership for the year, measured as a pro-rata score against the allocated points. Read the rest of this entry »
The net value is determined by calculating the current market value of the asset in relation to the current market value of the acquisition debt. Where the value of the asset increases in relation to the debt, the net value points will increase. Read the rest of this entry »
A broad-based group that meets the definition of a general broad-based ownership scheme, but wants recognition as a special broad-based ownership scheme may do so where it meets the additional criteria as per Section 5 of Annexure 100B of Statement 100. The primary difference between a special and general broad-based ownership scheme is that there is no limitation on recognition of percentage owned by the special scheme. Read the rest of this entry »
There are three answers to this question. A Black-owned business would obviously take the points. A white-owned business needs to consider how much benefit it can derive through incorporating Black ownership. Businesses contracting directly with government are going to receive benefit from having Black ownership. Apart from direct dealing with government, where a Black party can bring new value to a business, it then makes economic sense to sell to a Black participant and score on the ownership points. Read the rest of this entry »
There is much detail in this section. It is, arguably, one of the most important issues in the context of BEE. BEE, and particularly ownership, has developed a bad name because the wrong partners have been sought. It is all very well to have a paternalistic approach and give ownership to staff members or some unfortunate person, but is this a sound business principle? It may be, but normally it is not. The point is, if an empowerment deal is not based on sound business principles, then a sustainable relationship is unlikely. Read the rest of this entry »
Once the type of partner required has been established, the source of that partner is more easily identified. Determine who you want and consider the areas such a person would frequent. A question that small business owners may wish to consider in sourcing empowerment partners is, “Who is my target market and who can bring me closer to that market?” Read the rest of this entry »
As a result of historical circumstances, Black people wanting to get involved in business usually have limited access to finance.
There are relatively few empowerment companies who want to buy equity stakes in small business. It is also unlikely that a business owner or employee has the knowledge to obtain empowerment funding to buy the equity. Read the rest of this entry »
The QSE Codes make no specific mention of the sale of assets. However, they do provide that unless otherwise stated, all the Statements under Codes 000 — 700 are applicable. The sale of assets was not developed with QSEs in mind as it developed from pressure from large mining concerns. Read the rest of this entry »
How much credit does the seller warrant in terms of ownership? It is not real ownership but amounts to quasi, or representative, ownership. This is addressed in Section 4 of Statement 102.
The Codes term the measured business that sells the asset as the “Seller” and the BEE entity that buys the asset as the “Associated Enterprise“. They do not refer to the BEE party because often the sale is made to a business that is not exclusively owned by a Black party. I will use these terms to explain the calculation. Read the rest of this entry »
Section 3.2 of Statement 102 provides the criteria for the sale of assets to qualify for recognition as an ownership alternative and achieve ownership points. The transaction must adhere to all the following criteria:
Welcome to 2009. We are very much looking forward to this coming year. We have many new projects planned, great ideas that are set to work extremely well and fantastic prospects for 2009.
In addition to all the exciting plans we have, we believe this year is going to be a very exciting BEE year with many aspects changing, not to mention all the political action.
BEE Implementation in 2009
