SMME NEWS 4 18 July 2016 Nonto’s Business Corner Always go local Women making a difference We visit Zama Phakathi Foundation – Support South African products Recently there was a decision made by Sabc to play 90% local music, which has already helped people within the music industry by widening the gap for new artists to enter into the market. That decision was well received by South Africans. Is there also a need for a similar situation within other markets such as clothing, produce and technology to increase local buying? Take a look at your shoes, now your watch, then think back to what you had for breakfast. How many of those things do you know are produced locally ? Supporting Proudly South African products is something we all know we should do, but very Funding few people make a conscious effort to do. We have all heard of the benefits of buying locally it creates jobs which helps boost the local market, it also has a lower impact on the environment. Yet despite these positives there is still a shortage of consumers who buy only local. That may be drastic, the decision to buy local shouldn’t be forced onto the consumer. It should be decision made by the customer unconsciously realizing that the product has more value. The advantage that local businesses have is that they are on the ground and more in touch with the needs of the local consumers. Local producers should be meeting those needs at the right price. A majority of South Africans are not aware of the importance of where the item is made so they are decisions are based on practicality and affordability. So in order to encourage local buying you as an entrepreneur must pay attention to the competitors and understand the needs of the South African buyer, so that they buy a local product not out of patriotism but because it is the best option. Survey question ? Do you try to buy strictly local products ? • Yes • No • I don’t even pay attention Like our Facebook page Smme News. Ms Zama Phakathi is a woman with a diverse set of skills, yet despite all her high ranking positions from CEO of a media firm to director of an infrastructure and commodities company, she still has at her well heeled feet on the ground. She is the founder of Zama Phakathi Foundation. The purpose of the foundation is to instil the same enthusiasm and drive that made her a success in to the youth of South Africa. Zama is passionate about youth empowerment and development. The foundation provides mentorship programmes for youth and women in business. Some of the mentors that are on board to provide mentorship, include CEO of Sjadu Entertainment Mlondi Mzizi and Futhi Dladla from the KZN Department of Arts & Culture. Youth development takes place through motivational talks that are held at various schools. They are also entrepreneurship programmes that help young people develop a business sense to grow themselves and their nation. Then there is a poverty alleviation initiative that assists underprivileged households. To be a part of this initiative get on to the Zama Phakathi Foundation website. Industrial Development Corporation (IDC) IDC provides funding to people who want to start a business or already have one, specifically businesses with the aim of creating jobs for previously disadvantaged communities. It finances industrial projects, especially those that are supporting B-BBEE. It aims at developing the skills of black employees and business owners, by supporting local, regional, provincial and national government projects. Types of IDC Funding 1. Development Funds. These funds support projects with long-term impacts on the economy through growth. With an aim to bring projects out of the informal sector and into the economic mainstream. 2. Agro-Processing Competitiveness Fund This government fund provides support and helps businesses to achieve increased competitiveness, business growth, job creation and development in the agro-processing and beverages industries. This is secondary agriculture. 3. Product Process Development Scheme (PPD) This fund provides financial support to micro and small enterprises where the total assets are below R5 million, annual turnover is less than R13 million, and the business employs less than 50 people. Its aim is to promote innovation and technology development via financial support. 4. Risk Capital Facility Programme Provides risk finance to businesses owned by previously disadvantaged individuals that have the potential to create sustainable job creation. This programme provides three channels of funding: 5. Transformation and Entrepreneurship Scheme This fund finances marginalised groups of South Africans such as women and the disabled. Giving finance that will help to develop and grow your business as a startup or through expansions. 6. Green Energy Efficiency Fund In an effort to improve energy efficiency and help South Africa become a low-carbon economy, IDC created a fund to drive down energy related costs, improve production capacity, operational effectiveness and competitiveness, with an aim to aid in job creation. To apply for funding contact the IDC. Visit www.idc.co.za, click on “Online Funding” and follow the prompts.You can also phone the IDC call centre on 0860 69 38 88 Or email firstname.lastname@example.org. The woman in construction business THE main purpose of Build Awards South Africa (BASA) is not only to recognize excellence within the construction and contractors field, but also to provide a platform for knowledge sharing , performance improvement, financing and skills development through the incubator. Ms Zandile Ncala, the founder of BASA elaborates further on the purpose of this initiative and why it works. She said, “this programme doesn’t just focus on building simply with bricks and mortar but it also builds SMMEs through our incubation programme and community development programme Siyavuselela. The Siyavuselela social development programme rebuilds schools, tertiary buildings, churches, hospitals and the townships. The aim is to make sure that when we go into a community to work we not only construct a building and but to leave the area in a better position then they were be before we arrived.” Ncala also emphasizes the importance of having your paper work in order even if it’s to help in the community make sure you have a ‘social licence’ bring on board the relevant stakeholders and constituents so they are able to empower the masses. Bringing on board the relevant stakeholders is exactly what makes BASA more than just an awards show for construction. The other half of BASA also provides builders workshops and an R&D unit with various topics under the theme of build a better tomorrow while celebrating today’s success. “We have achieved a lot as a nation we now have black construction at a grade 6 level, women and youth, that is success. But we still have gaps people at construction sites are hired and fired at will with no contracts or letters of appointment so they get no benefits, issues of foreplan ,and occupational health and safety etc we can’t sit around and point at who is doing what wrong but we can find the gaps and work on them.” Bass hopes to get the ball rolling in doing just that To find out more and how to get involved visit www.buildawardssa.co.zs
18 July 2016 SMME, what you should know SMME NEWS 5 Understanding Costing and Pricing By Phumelela Projects One way to prepare for this is to save any profit you make so that have some ‘spare’ money to see you through these difficult times or that you can use to pay someone else to keep your business running when you can’t do it yourself. Costs Remember – the basic materials you need to make a product, for example, cotton, fabric, needles, are called the raw materials for making clothes. The goods you sell are your stock. Think of a day in your business, from the time you get up in the morning, to catching the bus or taxi to your business, then making your product or selling your goods or service, until when you finally return home. All businesses have three main kinds of costs: Startup costs, changing costs and fixed costs. Start-up costs Start-up costs are all the costs you will incur when you start your business. They include items you buy only once, like equipment or machinery, as well as raw materials or stock. They also include things like licenses and deposits which are not part of your monthly costs. Some businesses need more money to start than others, but you will always need some money to invest in your new business. Ask yourself the following questions: • How much money do I have to put into the business? • Do I need to get a loan to cover my startup costs? • Where would I get such a loan? • What interest would I pay on a loan, over what period of time? Changing / variable costs The costs that go directly into making or growing your product, offering your service or selling your goods, are called changing or variable costs. They are called variable costs because they change each month, depending on how many products you make or goods or services you sell. A dressmaker’ variable costs could include needles, cotton and fabric. While a vegetable farmer’s variable costs would include seed, fertilizer and pest control products. And the builder’s changing costs would include bricks, concrete, nails and paint. Fixed costs All the other costs of running the business, such as rent, salaries and wages and loan repayments, are called fixed costs. These costs do not go directly into making the product or offering the service but are as important for running the whole business. They are sometimes called the running costs or overheads. Most of your running costs are fixed costs which stay the same each month. A farmer’s fixed costs could include time and labor, salary, and loan repayment. While a builder’s fixed costs would include rent, time and labor, salary and rent. Pricing It is very important when we are starting our business that we understand all the costs involved so that we can charge the right price for our goods or service and still make a profit. It I important that we also consider the salary we need to pay ourselves. Although we are working for ourselves, we still need to earn a salary so that we can live and pay our own expenses that we had when we used to work for a boss. Even though we work for ourselves we still have to pay rent for our home and buy food for our family. So, it is important that you remember to include a salary in your fixed costs. You need to be practical about how much you pay yourself, especially at the beginning. It may be that you have to pay yourself a lower salary to start off with and then when your business gets going, you can increase your salary little by little. Budgeting is very important when we start our own business. Let’s look at these examples: Thandi mzini wants to start selling sweets and cold drinks at the market near the bus station. She has heard that there is good money to be made in this business. Thandi estimated how much she will need to start up her stall. Her startup period is 3 months and then she believes she will be making enough money (profit) for the business to support itself. Thandi has R1500 of her own. She manages to get a loan of another R1500. She must pay back the loan over 12 months with 20% interest. 20% of R1500 = R300 R1500 + R300 = R1800 R1800 divided by 12 months = R150.00 This means that Thandi must budget (allow for) R150 each month that she has to pay to repay her loan. In addition, she needs to take into account all other costs as well as the salary she wants to earn from her business. Is she wanted to earn R800 per month to start and she need to buy a table to put into her stall and some stock then she needs to work out what her costs would be: Repay loan = R150 Salary = R800 Tressle table = 80 Stock = R250 Total costs would be: R150+R800+R80+R250 = R1280.00 (To be continued). OPPORTUNITIES Sebezokuba nama bakery abesifazane bakwa Maphumulo Malusi is Ilembe’s Young Media Mogul Amalungu amabikawozi (bakeries) omphakathi wakwa Maphumulo angawabesifazane, ethokozile ukuqala kokwakhiwa kwawo. Yi Ntatheli ye SMME News eKwaMaphumulo BATHI bese beyinhlekisa nasezinganeni zabo uma bebuya emihlanganweni bezixoxela ukuthi uhulumeni uzobasiza bakhe ama bakery amabili angawabo njengabesifazane, babhake izinkwa namakhekhe endaweni yase Mphumulo, kwaMaphumulo. Nakuba zazingakukholwa lokhu izingane ngokusho kukaSihlalo we T.T. Ntuli Bakery, uNkk. T. Q. Magubane, kodwa nazo seziyajabula manje sezibona uHulumeni eseqalile ukwakha izakhiwo zala ma bakery amabili kule ndawo. Lezi zakhiwo ziwuhlelo lwentuthuko olwaqalwa nguNdunankulu waKwaZulu-Natal osanda kuhoxa uMnu. Senzo Mchunu i-Poverty Eradication Programme. Ziyi Siyanotha Bakery ne T.T. Ntuli Bakery. Kulindeleke ukuba zivule amathuba omsebenzi kubantu abasha. Kuqale enyangeni ka June, uNhlangulana, kophezulu ukwakha. UMasipala waKwaMaphumulo ungomunye kwabayisihlanu abahlonzwa njengababhekene nobubha phakathi kwabangama 61 baKwaZulu- Natal. Yingakho iMeya yalo masipala uNkk. Happy Ngcobo ibizimazise lo mcimbi. UNkk. Magubane uthi bagiya baqephuza sebebona sekuqaliwe ukwakha. Uthi kwaqalwa ngowezi 2013 ukukhulunywa ngalolu hlelo kungenzeki lutho. Bephawula ngslolu hlelo abasha abango Hlengiwe Maphumulo no Zamambo Mkhize benhlangano iSiyanotha, bathi bathokoze kakhulu ngokuqala kwalo msebenzi. ” Siyabonga kakhulu kuHulumeni wesifundazwe njengoba eqhamuke nalolu hlelo lokufukula amabhizinisi amancane. “Buka nje njengoba kwakhiwa nje abantu abakha lapha, abantu ngabendawo”, kusho uHlengiwe. Marvellous Zondi MALUSI Zungu is one of the most sought after voices flying the banner of Nongoma FM, the Mandeni born and bred radio personality is not only wowing the crowds with his voice he is also a business minded young person. When he is not doing his show, ‘Love Devotion’ which hits the airwaves at 20h00-23h00 on Monday to Thursday he is working on his media company ‘Ubuntu Media & Publications’. Speaking to SMME News, Malusi shared the secret to his success and also spoke about his ambition of trying to help young people. “Ubuntu focuses on Sales, Marketing, Advertising as well as promotions” said the God fearing motivational speaker. “Currently we are working on establishing a newspaper that will cater for the people of KwaZulu- Natal. From then on we will go into broadcasting and establish Radio KZN and Kingdom TV” further commented Zungu. The future Linda Sibiya dedicated his growth in the industry to his parents whom he said raised his in a Godly manner. Despite having setbacks in his schooling as he had to drop out of University due to financial problems that did not stop him from leading a successful career. “I completed my matric at Impoqabulungu, then I went on to do my Bachelor’s Degree in Education which was incomplete due to financial situations then I dropped out” concluded Zungu. The soft spoken media personality concluded by urging all young people to follow their dreams.