In the final edition of our Enterprise Supplier Development (ESD) series (See Part 1 and Part 2), Vivian Reddy, head of the access business unit for Edge Growth, an ESD specialist firm, shares how SMEs can land a spot in a competitive ESD Programme. She takes us through the following:
– What corporates are looking for in an ESD partner
– What a good proposal should look like
– Where to find programmes
At what stage of a business should entrepreneurs start considering applying for an ESD programme?
The “E” in Enterprise Supplier Development stands for enterprise development – which refers to smaller earlier stage business. These businesses should look for Enterprise Development programmes and incubators.
The “S” in ESD stands for supplier development – which typically refers to later stage businesses with at least 3 years in operation, these businesses have existing corporate contracts or have the potential to supply a corporate. Any business can benefit from ESD, but earlier stage businesses stand to benefit more.
Why are we seeing increased interest from SMEs in ESD programmes?
The primary reason is they [entrepreneurs] think that entering a program means getting a supply contract with the programme sponsor. The secondary reason is access to expertise and or facilities if the [programme] offers an incubation space. Thirdly some programmes offer some kind of grant capital.
How difficult is it to get into a popular programme?
It is moderately difficult. It depends on the life cycle stage and size (in terms of turnover) of the SME. Startups and early stage businesses may find it harder to get into a programme, however, there are so many programmes on the market now, so the chances are higher.
SMEs that have a track record and have been in existence for at least 3 years stand a better chance of getting into a programme.
The chances are significantly improved if the corporate sponsors buys the goods or service that the SME supplies. SMEs should first determine whether there is a demand for their goods and services by the corporate.
How does a good application for an ESD programme look like?
Usually SMEs have to complete an application to access an Enterprise Supplier Development programme, they should look out in the media for adverts. Usually the intake periods are a few weeks to a month, and occur annually.
Outside of an intake period, SMEs can send their profile to corporate to indicate interest in participating in the corporate’s programme.
- Write a 2-3 page document
- Start with what the business can do – products and services
- Show your track record
- Indicate what makes you different
- End with your BEE credentials
- A tip, first say why you are good at what you do, then say that you are also black, not the other way around.
How can SMEs find out about programmes available?
Like most things today, you can start with Google, however, you can get misled by Google’s algorithm – not all the best programmes end up on the first page of the Google search results page.
A good starting point would be the ANDE site. They have a report on SA’s entrepreneurial ecosystem, incubators, accelerators and funders.
Also see: SME South Africa’s Full List of SA’s Biggest ESD Programmes.