SME owners must fulfil all compliance requirements for their businesses, especially if they are in the process of accessing funding or seeking business opportunities, says Rapelang Motsumi, chief consulting officer of DB Business Consultants, a business consultancy company.
Referring to funders, corporates and supplier enterprise development programmes, Motsumi says many of these stakeholders want to know your business is compliant with all the relevant regulatory requirements.
“This is so that they see that there is a legitimate business that they can trade with or do business with,” he says.
Here are some of the compliance and regulatory issues that every business needs to keep abreast of:
– Register with SARS as a provisional taxpayer, you must collect and pay VAT if your business has an annual turnover in excess of R1 million.
– Familiarise yourself with the Basic Conditions of Employment Act.
– Keep up to date with municipal bylaws, zoning schemes, noise levels, hygiene standards, and so on because it will have impact on your business.
– Investigate what the Consumer Protection Act and the laws on consumer rights in South Africa have to say about how you should advertise your goods, structure your contracts with consumers, handle customer data and deal with merchandise returns under warranty.
Motsumi is seen presenting a masterclass on business compliance and ESD on the 67CEOs initiative’s YouTube channel.
Here are some of the advice he shares in this masterclass.
1. Do your research
Motsumi says when applying for funding, familiarise yourself with the options available. Depending on the type of funding you are looking for, find out the compliance requirements for that particular funder.
There are many types of finance options available including: asset finance, contract finance, equity, export finance, import finance, invoice discounting and factoring, mortgage loans, overdrafts, property finance, supplier finance and term loans.
He advises you do the same if you pursuing other business opportunities like applying for a tender – first research what regulations you need to comply with.
2. Get expert help
Experts like a corporate finance specialist, who specialises in structured finance, are some of the funding experts that entrepreneurs can make use of.
The corporate finance specialist helps put together an investment proposal and would then tell the client what the compliance requirements are.
There are also niche consulting firms which specialise in helping entrepreneurs access development funding in the form of government grants, incentives or loans from institutions like the Department of Trade and Industry (DTI), Industrial Development Corporation (IDC), National Empowerment Fund (NEF), and Small Enterprise Finance Agency (SEFA).
For each business they work with, they would identify the funds applicable to their company and their growth plans. They also help with developing business plans and financial models as well as advising their clients throughout the application, approval and claims process.
3. Get into an incubation or acceleration programme
Most accelerator and incubator programmes, as part of their business development initiatives, help entrepreneurs to ensure their businesses are compliant.
These programmes are also helpful with opening up entrepreneurs to business opportunities from corporates.
“It then becomes easier to be adopted into a corporate’s enterprise supplier development programme, for example.”