Enterprise Development is worth 10 points on the generic scorecard and 20 points on the QSE scorecard. Enterprise develoment refers to your company assisting a black owned company with a high BEE score is some way.
What form can this assistance take?
Assistance can take the form of a monetary contribution, or non-monetary contribution – as long as it can be measured – and must offer some value to the beneficiary.
It can be money, in the form of:
- Cash payment
- Discounts or no charge on products of services
- Better credit terms or better payment terms
Non-Monetary in the form of:
- Assistance like coaching/mentoring
- Loan of equipment or facilities – e.g. warehouse or machinery or vehicles
Who is a potential beneficiary?
The beneficiary organisation can be:
- an EME
- a QSE or generic company that is more than 50% black owned AND is a level 1-6 BEE contributor
- a QSE or generic that is not black owned, butis a level 1-3 BEE contributor
This implies that before you decide on an enterprise development project you must clearly identify the beneficiary, even including obtaining a BEE scorecard from them.
(A possible enterprise development activity could even be to help the company produce its scorecard showing that it is a valid enterprise development entity.)
The QSE scorecard has set a target of 2% of EBITDA (earnings before interest, tax, depreciation, amortisation). This number is usualy close to your net profit before tax. The target is to spend 2% of EBITDA on enterprise development activities.
Proof and Documentation:
Documentatry proof of all spend must be kept – items like thank you letters or email. Proof would also include documents showing how the company has benefitted via the assistance given.
In addition, financial statements should be kept showing how the business has improved since the assistance was given.