How many black businesses fell victim to the government, rest in peace black business. There is a heaven for BEE (Black Economic Empowerment). It would be a lie if I told you that I never thought of failure in business, if you are reading this as an entrepreneur: we are the last ones left.
Thobile (*not her real name) is a young Black Female Entrepreneur from Rustenburg. I came across Thobile earlier in the year when she enquired about a quote for some business services. She qualifies as “youth” and had been pre-approved for a grant from NYDA (National Youth Development Agency) of South Africa for her business.
There was a certain hope in her voice, excitement on starting this new journey of entrepreneurship. To cut a long story short, today is over three months since that initial introduction. I have revised her quote twice and she is still waiting on the NYDA, nothing is happening.
As a small business, 3-4 months awaiting payment can mean the end of your business. Small businesses do not have a lot of financial resources, they are usually living on the edge of extinction. Our recent entrepreneur in the spotlight told us about, how it took 3 months just to receive a response from the NYDA. She applied for COVID relief funds in April/May and did not even get a response, until a few days ago. The response simply read “we acknowledge receipt of your application”.
Inefficiencies costing us our Businesses
Why does it take 3 months to process an APPROVED payment? Especially when you claim to prioritise Black Female Youth owned businesses as a government. What is the challenge, what is the problem? If I got a loan approved at the bank, it would be wired in my account within 48hours.
We hear so many rumours “unproven” allegations of corruption and how monies are paid within days to irregular tenders. However legitimate Black Female Youth Owned Business, asking for less that R10 000, must wait over 3 months to receive payment (At the time of writing this, this wait will probably be much longer if she gets paid at all).
Thobile’s business is now in its last legs, rest in peace black business, there is a heaven for BEE.
Jay (*not his real name) is a close friend and business partner. He had a business venture a couple of years ago. He partnered with some friends to start a mining venture. The business venture required a couple of millions of rands in investment. They managed to put up a fraction of the start up costs, and applied to the Black Industrialist Scheme (BIS) for the rest of the funds required. They were approved and received their first payout – started their business and all was going well.
When it was time for the second payout, instead of a payment in their bank account, they received a call. They received a call from an official requesting a bribe before they can make the payment.
To cut a long story short, many years later, their company is dead. They refused to pay the bribe and never received their payouts. As a small business with squeezed profits, how can you afford to pay for all your business expenses and still budget for government bribes. It is well known, allegedly that as a small business, you need to have a line item for government bribes.
As a small business, you need to have a line item for government bribes.
Rest in peace black business, there is a heaven for BEE.
Challenges facing Black Female Owned Businesses
There are a lot of challenges entrepreneurs face in general when starting a business. However Black Female Entrepreneurs have an added set of challenges, unique to them being black and female.
Here is a list of the top 5:
- Access to funding and mentorship
- Access to resources, employees and assets.
- Systemic barriers to entry. Policy and written rules that require companies to have: (1) over 5 years of experience, (1) an office, (3) employees just to bid for projects.
- Credibility issues, convincing your clients that you are capable to deliver.
- Sexual harassment, being expected to deliver sexual favours in return for an opportunity
Black females have been more disadvantaged than any population group. This articles lists just some of the few challenges faced by small businesses and black businesses in general.
Rest in peace black Business
There are many Black Businesses that have fallen away because of our inefficient practices. Entrepreneurs are not asking for special treatment, handouts? Is it too much to ask for, to just get paid on time for services already offered and products already delivered?
Is it too much to ask for to deal with a government institution, get paid for services delivered and not be forced to pay bribes?
As an entrepreneur who deals with a lot of Black businesses, it is disappointing to see so many of them headed for extinction as a direct result of out government practices. We are not asking for much, just for government to do what a government is supposed to do.