FINDING AND DEVELOPING YOUR COMPANY’S FUTURE LOCAL SUPPLIERS How a Business Accelerator programme can drive your growth strategy

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Any leading industrial enterprise in South Africa knows firsthand the struggle of finding and developing new local suppliers efficiently and effectively, especially small and medium enterprises (SMEs). How to “cast a wide enough net” to find potential vendors outside of known networks and rapidly identify “promising candidates” to avoid wasting resources on vendors that do not offer long-term growth potential. How to establish if potential vendors are committed to you as a customer, capable of delivering, competitive (on price, quality, reliability, etc.), compliant, have the capacity to handle your required volumes, and can manage typical cash constraints.

Yet, finding and developing the “right” suppliers has the potential to set your growth strategy up for success and this is where a Business Accelerator programme comes into play.

How a Business Accelerator can help your business
“If designed using a tested methodology, a Business Accelerator programme should be able to find and develop your future, local suppliers, whilst simultaneously optimising B-BBEE outcomes. It must be able to identify high potential, committed suppliers, connect them with customers and unlock clear, scalable commercial opportunities through robust upgrading interventions,” says Kyle Ballard, Head of Accelerators at BMA.

Ballard lists six key differentiators that a leading industrial enterprise should consider when selecting a Business Accelerator that is right for them.

Selection driven by customer needs
An Accelerator should first seek to understand what the customer’s needs are, with all subsequent phases of the programme then geared towards delivering on those confirmed requirements. This is distinct from many other SME development programmes which seek to identify what is deemed to be “a good business” without clarity on what the ultimate customer wants.

Competitive placement of SMEs
An Accelerator needs to be structured to identify high-quality SMEs who are prepared to demonstrate their potential to customers, as opposed to simply identifying SMEs needing support. A large volume of applicants should be solicited through several networks and media channels, efficiently screened to identify high-potential candidates, supported to put their best foot forward, and ultimately selected by the customers themselves.

Customised upgrading
Many SME programmes improve SMEs according to a generic methodology and then try to match them with customers (if at all), with mixed results at best. Instead, a Business Accelerator should customise upgrading based on the nature of the identified commercial opportunity thereby bridging the often challenging and frustrating gap between high-potential enterprises and purchase orders being placed.

Maximise B-BBEE spend within the value chain
B-BBEE points can be secured through various mechanisms, often tangential to the core business of a corporate. An Accelerator, however, should provide an opportunity to direct B-BBEE spend towards capacitating and aligning a lead enterprise’s value chain to directly support its growth strategy. This ultimately results in a far more strategic use of B-BBEE expenditure as an enabler of its own growth as opposed to distracting from it.

The Durban Chemicals Cluster (DCC) Accelerator is one such programme that since 2019 has successfully unlocked 33 new commercial commitments between leading corporates and SMEs, adding up to more than R24.5 million in new revenue created in the first year (typically growing beyond this in subsequent years) and creating more than 150 new jobs.

“Companies operating in South Africa’s chemical sector are always on the lookout for high potential SMMEs to work with and the DCC Accelerator makes it so easy to identify potential partners. We’ve met some high-calibre talent with brilliant business cases through the Accelerator.” Rudi van Niekerk, Regional General Manager of H&R Africa.

Another example is the KwaZulu-Natal Clothing & Textile Custer Accelerator which has, since its inception, unlocked 14 new commercial commitments between leading retailers in the local clothing and textile sector, resulting in over R10.4 million in new revenue and creating over 120 new jobs.

“It’s been an unbelievable experience to see the calibre of local supply, the potential opportunities and how Mr Price can partner with these SMEs for future growth and reach our localisation targets,” shares Paulina Urban, Sourcing Director at Mr Price Sport.

Lead enterprises and other stakeholders interested in partnering with the Accelerator can visit https://bmanalysts.com/our-services/accelerators/ or contact Accelerators@bmanalysts.com for more information.