A RECENT article in Business Day reported that government has set aside a portion of its R300bn infrastructure expenditure over the next decade for small, medium and micro enterprises.

This money is aimed at establishing and sustaining 100000 new small businesses each year. It is naive to believe government will create enough work for these new enterprises to sustain themselves, so these new companies will need to look to the private sector for work.

The fact that smaller companies will be supported by larger companies does not automatically guarantee them business. They will face the same challenges every new business has to confront — marketing themselves and overcoming the fact that they may lack experience in their field.

There are scorecard incentives to buy from new black-owned businesses but their mere ownership does not guarantee them business at the outset either.

Almost every established company has either developed and published an empowerment procurement policy or they will within the next year. Most procurement policies I have read have a clause along the lines of: “We will set aside certain aspects of procurement to black suppliers, but in no way will we compromise on price, quality, delivery and other commercial criteria.” Principles like these reinforce the need for a competitive and quality-orientated economy but they may not take into account the lack of experience of newcomers to an industry.

Professional associations and industry institutes are perfectly placed to address this issue. By working with the purchasing organisations they can influence the transformation process of their members and encourage the introduction of new players into the industry. This process should be accompanied by education on standards, perhaps even accrediting companies in their industry and promoting members that are accredited.

The generic scorecard of the trade and industry department provides a points-based incentive for established companies to mentor new entrants. These points can be claimed under provisions for enterprise development (indirect empowerment).

Associations and institutes should implement a scheme of matchmaking new entrants and larger companies. Many companies are still at a loose end when it comes to making head or tail of enterprise development and would welcome this initiative.

Other alternatives could be a matchmaking scheme for joint-venture partners, or identifying new entrants that must be used in fulfilling a contract.

The upshot of these initiatives would be that the new entrants gain experience in a controlled environment and will come to terms with doing business with larger customers.

Many professional associations and industry institutes benefit because, being nonprofit organisations, they are not able to spend members’ money on corporate social investment or enterprise development, but by creating viable business opportunities for new entrants they will be able to claim points for both.

Janisch is the CEO of BEE consultancy Caird Consulting.