What is Enterprise Development?
Enterprise development is a business to black business transaction, where the aim is to provide contributions to assist in the operating, financial and development towards business sustainability.
In the context of enterprise development, there are two definitions of a black business.
The first has a positive multiplier of 1.25 to the contributions and is defined as a 50% black business that is either an Exempt Micro Enterprise or a Qualifying Small Enterprise.
The second is defined as a 50% black business that is Generic, or a 25% black owned business that has a valid BEE certificate between Level 1 and 6.
What are Enterprise Development contributions?
Enterprise Development contributions take many forms. This is not the value of a contract given to a black business but the contributions towards technical help, transfer of knowledge and skills, operating cash flow, loans and/or investments.
The Codes of Good Practice Enterprise Development Matrix provides the framework to these contributions.
Examples of Enterprise Development
All examples should be read in conjunction with the Enterprise Development Matrix as each contribution type carries a specific percentage weighting.
Enterprise Development Agreements
All enterprise development claims for BEE verification require valid supporting documentation.
The start point is an Enterprise Development Agreement where there is a clear understanding between the company providing the contributions and the black business receiving.
Download an example of an Enterprise Development Agreement
An architect company provides professional services to an emerging black contractor. The professional services can be rendered at a discount or at no cost.
The above example can be applied for time of employees assisting the same emerging black contractor in human resources, administration and finance. The time of the employee has a rand value and is calculated using the following formula. Employee Cost to Company divided by 160 hours to equal an hourly rate.
The finance department ensures that payments made to a black service provider are within 10 days from date of invoice. The closer the gap the higher the percentage claimable on the total invoice value excluding VAT.
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