What to do about BEE?

EconoBEE – Newsletter January 2009
Helping you and the Economy Grow

How big is your business?

Turnover below R5 million

You have an easy job – All businesses with a turnover below R5 million per annum do not need to produce a BEE Scorecard, they are exempt.

EconoBEE’s EME Pack is the ideal long term solution for your business.

Turnover between R5 and R35 million

You need to produce a BEE Scorecard but fortunately you only need to comply with 4 of the 7 elements. This makes your job much easier and will take less time.

EconoBEE V3 is a fantastic BEE Self rating tool. In addition a short workshop is all you need to get going!

Turnover above R35 million

Don’t panic! You might be the biggest type of company who needs a scorecard but with the right advice you can get your very own scorecard with minimal effort.

You need a combination of EconoBEE V3, workshops and EconoLog, implemented properly using our 10 Steps to BEE Approach.

What to do About BEE?

EME – Exempt Micro Enterprise
If your annual turnover is less than R5 million, you need to do no more than tell your customers that you are an EME (Exempt Micro Enterprise) and are level 4 or if your business is black owned, level 3. If you need help in phrasing the letter and explaining this to your customers then our EME Status Pack is the right product for you.

QSE – Qualifying Small Enterprise
If your annual turnover is between R5 million and R35 million then you need to produce a Scorecard.
It is however, very easy to become BEE compliant. You need to choose 4 of the 7 elements of BEE and earn points on those 4. An average QSE will probably be able to achieve more than 50 points – level 5 on the scorecard, which will help in getting more business and retaining existing business. To do this you may need to attend a workshop or you may need help with calculating your score with EconoBEE V3.

Generic – Large Company
If your company has a turnover of more than R35 million, then you will need to follow the generic scorecard and you will need to score points on all elements. To maximize your points, you may need training, consulting, help in calculating your initial scorecard and in collecting and storing the documents which will provide evidence of the scores you are claiming. EconoBEE’s 10 Step Process is a full service offering to ensure your business gets the BEE Score it deserves.

The Broad Based BEE Scorecard

In order to implement BEE successfully, one needs to do well on the entire Broad Based BEE Scorecard. I am often asked “why is the scorecard “Broad Based” – what does that actually mean to my business?” The concept of the broad based scorecard is quite clever, as it refers to the fact that it encompasses many different aspects of your business (the seven elements). One could do well in one element without becoming compliant, but if you do well in all seven elements, you will earn a very high score. The aim of the business is to earn points in each of the seven elements.

The Elements
Ownership – who owns the business?
Management – who is the senior/upper management?
Employment Equity – who works for the business?
Skills Development – how much money is spent on training staff?
Preferential Procurement – do your suppliers have a good BEE score?
Enterprise Development – do you invest time/money in developing small black businesses?
Socio-economic Development – do you invest time/money in social development?

The BEE Scoring Process
Each element has a number of points available as well as a target for various items. In order to earn points a company needs to meet targets in various items on each element on the BEE Scorecard. E.G. A company earns BEE points by spending 1% of their profit on Social contributions. If a company only spends 0.5% of their profit, then they only earn half of the allowed points.

Certificate or Scorecard with points?
This is a commonly misunderstood concept. The certificate is a final report that states the level achieved based on how many points have been earned. The certificate has value when the company has done well on their scorecard i.e. earned plenty points. The idea is to earn BEE points because the more points one has and the higher the level, the more likely one’s customers are to respond positively. It is pointless (excuse the pun) to have a certificate/final report that shows a low score.

In our business, our photocopier/printer supplier has supplied us with a certificate that has very few points. We do not benefit from this in any way but still need a photocopier/printer. However our contract is going to expire quite soon. I have received calls from other potential suppliers. I am far more likely to choose the next supplier based on his score. Obviously, the product has to be suitable as well.

It is clear that a certificate alone is not sufficient, to do well you need to earn more BEE Points.

BEE is Driven by Preferential Procurement – give your customers what they want
The point above ties in very well with this section. BEE works because your customers want to earn more points so they get a good score and therefore more business. Supplying them with a good BEE scorecard is essential and an easy way to “get in the good books” of your customer.
Sometimes the choice of getting a BEE Scorecard is made much easier by your customers. They insist upon it.
In summary, good customer service includes a good BEE Status.

BEE Points = Business

That’s it for the time being.

Keith and the EconoBEE Team

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