Enterprise Development Template 

A model enterprise development policy should contain the following elements: Introduction Definitions Policy Procedure Responsibility Policy Review Each one of these sections will be explained individually. The explanation will be followed by a model example using Dream Holidays as the name of the fictitious company for whom the policy applies. 1) Introduction The introduction defines why the policy is necessary and what the company hopes to achieve through the use of the policy. To steer the economy towards a stable environment that nurtures growth and increases the country's economic competitiveness. To foster a synergistic relationship between private and public sector to embrace social investment as a common vision. To develop a wider economic base and maintain profitable business standards. To broaden the tax base. To enlarge the supplier base to reflect the dynamics of the consumer/customer base. To indirectly create jobs and raise the standard of living. To assist with the transfer of skills and technology to previously disadvantaged individuals. To foster an entrepreneurship culture amongst previously disadvantaged groups. To create a climate where diversity is valued and regarded as strength. Dream Holidays will employ the guiding principles outlined in the Tourism Charter to assist entrepreneurs through enterprise development which supports the creation and enhancement of the entrepreneur's operational and financial capacity. This incorporated with preference to enterprises with higher broadbased BEE contributions during the procurement process, is an effective way of creating market access for black entrepreneurs. The role of SMMEs is critical in South Africa for job creation and economic growth. Back to Top 2) Definitions Definitions should clearly and unambiguously define terms and abbreviations that are used in the document. BEE: Black Economic Empowerment Black Empowered SMME: means a small, medium or micro enterprise (with a turnover of up to R10 million per annum) which has between 25 percent and 50 percent direct ownership and management by black people. Black Owned SMME: means a small, medium or micro enterprise (with a turnover of up to R10 million per annum) which has more than 50 percent direct ownership and management by black people. Black people: refer to African, Indian and Coloured South African citizens. BSMME: Black Small Medium and Micro Enterprise Enterprise Development Initiatives: these may take a variety of forms including: Direct investment in Black Owned and Black Empowered SMMEs; Joint ventures with Black Owned and Black Empowered SMMEs that result in "substantive" skills transfer; Support and funding for the grading of emerging tourism companies, as well as providing mentorship, business relationships and linkages which, in turn, provide business opportunities to these enterprises; and Twinning initiatives with Black Owned and Black Empowered SMME's which result in cost savings or revenue generation for those SMMEs. Indicators: represent the key measurement yardsticks included to determine the BEE contribution made by tourism enterprises within each broad-based BEE factor of Ownership, Strategic Representation, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development, Social Development and Industry Specific. SMME: Small Medium and Micro Enterprise Targets: represent the ideal scenario at which the tourism enterprise will score full points for the respective indicator. Tourism enterprises under measurement may score proportional points on each indicator, according to the proportion of the relevant target achieved for that particular indicator. Two targets were set for each indicator, namely: a 2009 milestone to be used during the first five years of implementation, ending on 31 December 2009 and a 2014 target, ending on 31 December 2014. The 2009 targets should be used by all companies measuring the BEE status of a tourism enterprise until 31 December 2009. The overall BEE targets for 2014 should be used when one measures the BEE status of a tourism enterprise in the five-year period between 1 January 2010 and 31 December 2014. Total Employee Time:refers to the total working hours calculated as the product of the total number of employees and their standard working hours. TEP: Tourism Enterprise Programme Weightings of each factor: these reflect the relative importance that the Sector places thereon. The seven core factors of BEE are weighted to bring the Scorecard to a maximum of 100 percent. Back to Top 3) Policy The Policy should clearly and unambiguously outline what the exact enterprise development policy of the company is. Additionally, the policy will clarify the motivation for and merits of adopting it. Dream Holidays has developed an enterprise development policy and guidelines that we believe will contribute towards overall economic growth and transformation of the country. Enterprise Development contributions (whether by spend or management time contribution) relate solely to initiatives targeted for the benefit of Black Owned tourism companies as specified under the indicator of Preferential Procurement. It needs to be noted that only benefits flowing to Black Owned and Black Empowered SMMEs will be considered. Initiatives which are considered in Enterprise Development specifically include, amongst others, the support and funding provided for the grading of emerging tourism companies, as well as various business linkage initiatives that provide business opportunities to these enterprises. Enterprise Development can be measured through three related indicators. A tourism enterprise can elect to contribute through one or all of the indicators provided. These indicators are as follows: The first indicator measures the percentage of post-tax profits that a tourism enterprise contributes toward any Enterprise Development or related initiative; The second indicator measures total management time contributed to Enterprise Development initiatives, as a percentage of total management time; The third indicator measures the outcome of Enterprise Development initiatives, measured as the total revenue generated or costs saved by Black Owned SMMEs; For tourism enterprises that contribute through all three elements, the sum of the three indicators will be applied as a measure of its Enterprise Development contribution. Enterprise Development aims at assisting and accelerating the development of the operational and financial capacity of entrepreneurial enterprises that are BEE compliant. Back to Top 4) Procedures Procedures will outline the method that the company will implement in order for it to realise the aims as outlined in the policy. In order to apply the company's enterprise development policy, Dream Holidays will need to identify black-owned and black-empowered enterprises. The following sources may be utilised to identify enterprise development beneficiaries: Supplier database TEP or other databases Outsourcing of internal processes Direct solicitation Enterprise development initiatives and developmental assistance could take on the following forms: Support and funding for grading of emerging tourism companies. On request, training may be given. Dream Holidays may conduct a competency assessment after training to certify the supplier's competency. Assistance may be given to secure goods and services where labour only tracts are undertaken. Additional help may be provided to the suppliers' procurement function when requested. Business linkages and mentorships to provide business opportunities to SMMEs Joint ventures with black-owned and black-empowered SMMEs which result in substantive skills transfer Twinning initiatives with black-owned and black-empowered SMMEs which result in cost savings or revenue generation for the entities In the Tourism Scorecard, Enterprise Development is weighted at 14 percent during the five years ending 31 December 2009, with its weighting reduced to 10 percent during the five years ending 31 December 2014. By the Scorecard, Enterprise Development can be measured through three related indicators. These indicators and the relevant targets are as follows: The first indicator measures the percentage of post-tax profits that a tourism enterprise contributes toward any Enterprise Development or related initiative. The target set remains constant over the entire ten year period ending 31 December 2014, at 1 percent of post tax profits; The second indicator measures total management time contributed to Enterprise Development initiatives, as a percentage of total management time. The target set remains constant over the entire ten year period ending 31 December 2014, at 1 percent of the total management time; The third indicator measures the outcome of Enterprise Development initiatives, measured as the total revenue generated or costs saved by Black Owned SMMEs; and For tourism enterprises that contribute through all three elements, the sum of the three indicators will be applied as a measure of its Enterprise Development contribution. Calculating the Enterprise Development Score of Dream Holidays: Enterprise Development Information Enterprise Development Spend R 400 Post-tax Profit R 100 000 Before calculating raw scores to discover whether targets have been met or not, first calculate the actual percentages, as described by each indicator to measure BEE achievement: Sub-Indicator Calculations % Spend of Post-Tax profits on Enterprise Development: = Enterprise Development Spend/ Post-tax profits = R400/ R100 000 = 0.4% Target % Enterprise Development Spend 1% Calculating Enterprise Development Enterprise Development Spend Calculation Raw Score = % enterprise development spend/ enterprise development target 2009 = 0.4%/ 1% = 40% Target has not been met in full. BEE Score = raw score X indicator weighting = 40% X 14% = 5.6% There is no need to calculate the overall BEE score for Enterprise Development, since there are no sub-indicators. Dream Holidays simply scored 5.6% for Enterprise Development out of a possible maximum score of 14%, since they did not reach the Enterprise Development target. Back to Top 5) Responsibility Responsibility outlines the person who is responsible for ensuring that policies are abided by. It is the responsibility of departmental heads and the document owner to ensure that the Enterprise Development Policy and Procedure is adhered to and all employees are fully briefed and acquainted with the procedure. Back to Top 6) Policy Review The section outlines if and when a reassessment of the policy will take place. This policy will be reviewed as and when business dictates such a review. Back to Top