One of the populated areas in Alexandra. With 55% of SA youth unemployed and the economy labouring, the country badly needs small businesses to work their magic writes Dylan Baxter. Picture: Zintle Mahlati
JOHANNESBURG - With 55% of South African youth unemployed and the economy labouring, the country badly needs small businesses to work their magic - and big business connections can be the game-changer that South Africa's small business sector needs. 

Major corporations currently spend billions of rand a year on suppliers, buying everything from tyres and software to catering and marketing services. 

This is a massive potential market for small businesses as breaking into the supply chain of a large company is often a springboard for exponential, sustained growth. 

We've got to do a better job of linking suppliers to enterprises, and increasing the number of small firms acting as suppliers to South Africa's biggest corporations. Lots of big businesses have enterprise and supplier development and inclusive procurement programmes. 

We need to step this up if we're going to get close to creating the job opportunities and economic growth we desperately need. A good starting point for big corporations is to look at which items can be sourced locally with little risk to the business. Likewise, for small businesses, the aim is to become a contractor first, focus on up-skilling, and prove their quality and reliability before they look to grow their presence in a corporate supply chain. 

Three steps to transform supplier development: 

  • First, identify candidate businesses with the potential to be included in your supply chain and groom these businesses for supply chain partnerships with you.
  • Second, address the need and benefit from the B-BBEE focus on supplier development, allowing you to increase the number and quality of existing and potential new black-owned companies in your supply chain. 
  • Finally, distinguish between non-performing or under-performing suppliers currently on your supplier database, and identify performing suppliers who have specific growth needs. 

It’s only when corporates start to actually engage with small businesses that they will realise the true benefits and value.

According to National Treasury figures, there are around 1million formally registered small businesses in South Africa. It’s estimated that small businesses provide about 60percent of the country's jobs. In this tough economic environment, it’s about time we viewed small businesses as a serious catalyst for progress and growth, and find ways of giving them more access to markets and opportunities for growth.

Dylan Baxter is the Raizcorp director. 

BUSINESS REPORT