Seda Annual Report 2008/09

Presentation to Select Committee on Trade and International Relations

21 October 2009

Delegation details

Name Title Contact Details

Mr. L Mngomezulu

Board Chairperson 011 484 9990

Ms. H Lupuwana Chief Executive Officer 012 441 1011

Ms. H Hogendoorn

Chief Financial Officer 012 441 1004

Mr. S Kunene HOD: Provincial Affairs 012 441 1299

Mr. J Ravjee Acting Executive Manager: STP 012 441 1202

Mr. L Njenge Senior Manager: Strategy and Organizational Performance Management

012 441 1432

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Acronyms

CEO – Chief Executive Officer EIC – Enterprise Information Centre ENE – Estimates of National Expenditure GDP – Gross Domestic Product MTEF- Mid Term Expenditure Framework Seda – Small Enterprise Development Agency SMME – Small Micro and Medium Enterprises STP – Seda Technology Programme

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PART A: Seda Overview

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Contents

Background Seda’s mandate Mandate implications Target market Seda’s network Human Resources Seda’s key products and services

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Background

Seda established in December 2004 through the National Small Business Amendment Act, Act 29 of 2004

Formed through the merger of Ntsika Enterprise Promotion Agency, the National Manufacturing Advisory Centres (NAMAC) as well as the Community Public Private Partnership Programme (CPPP).

Godisa Incubation Programme, Technology Transfer Programme, and the South African Quality Institute (SAQI) later incorporated as a ringfenced programme - Seda Technology Programme (STP)

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Mandate

Implement national government small business strategy

Design and implement a standard and common national delivery network that must uniformly apply throughout the Republic in respect of small enterprise development

Integrate all government funded small enterprise support agencies across all tiers of government

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Mandate Implications

• National accountability• Shift from wholesale to retail model• Increase the footprint nationally including rural

communities• Seda as national integrator across the 3 tiers of

government• Create a national credible brand• Provide uniform quality products, services and

standards• Find win-win partnerships

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Small enterprises

Micro enterprises

Survivalist enterprises

•Less than 200 employees

•Developed technical & business skills

•Less than 50 employees

•Developed technical/limited business skills

•Less than 5 employees

•Limited technical and business skills

•Individual self employment

•Very limited technical and business skills

Opportunity-driven/

Entrepreneurial

Necessity-driven/

Survival

Medium

enterprises

Small enterprises

Micro enterprises

Survivalist enterprises

Characteristics20 %

80 %

Potential entrepreneurs

Target Market 9

Seda Network

National Office 8 Provincial Offices 42 branches 58 EICs 4 mobile units 21 co-location points at local municipalities 27 incubation centres under the STP

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Seda Network

Seda Branches

Contracted EICs

STP Incubators

Co-locations at local municipalities

Mobile Units

Eastern Cape 6 3 5 3 0

Free State 6 9 0 3 2

Gauteng 1 10 9 0 0

KwaZulu Natal 6 5 3 8 0

Limpopo 5 6 2 0 0

Mpumalanga 5 12 5 7 0

Northern Cape

5 7 0 0 2

North West 5 1 1 0 0

Western Cape 3 5 2 0 0

TOTAL 42 58 27 21 4

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Human Resources (as at 31 March 2009)

Location Number Percentage of Total Staff

National Office 128 22.9%

Provincial and branches

406 72.6%

STP 25 4.5%

TOTAL 559 100.0%

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Seda’s Key Products and Services

Seda Business Talk and Start (for start up clients) Entrepreneurship awareness events Business start-up training Franchise awareness Business planning Business registrations Cooperative development

Seda Growth and Build (for operational businesses) Access to local markets Access to export opportunities Access to technology Access to finance Sector programmes Business mentoring Hotline to assist with late payment of SMMEs

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Seda’s Key Products and Services

Seda Technology Programme Business Incubation Technology transfer Product quality and certification Technology for women in business

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PART B: Seda 2008/09 Annual Report

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Contents

Contextual considerations Performance Highlights Sustainability and Impact Survey Seda and STP Vote 32 funding Future plans

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Contextual Considerations

Moratorium for half of the year Organizational restructuring and impact on

performance Economic crisis impact on small business

environment 2008/09 period is first year of a longer term

organizational reengineering process

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Performance Highlights

Leadership

Appointment of CEO Appointment of additional board members Appointment of Executive Management

Financial Management

Implementation of Financial Management Improvement Plan

Unqualified audit

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Performance Highlights

Improved service provision

Repackaging of Seda programmes, products and services Partnerships with UNIZO (Belgium), SEBRAE (Brazil), NSIC

(India), Technonet Africa and TradePoint programme

Focus on performance

534 staff members at end March 2009 (75% in the delivery network)

Implementation of performance management system

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Performance Highlights

Service provision to SMMEs

199,830 potential and existing small businesses accessed Seda’s network (7.3% increase from 2007/08)

46,695 client needs assessed; 14,373 clients assisted Main interventions: business planning, business

registrations, cooperative support, access to markets Progress on national programmes adversely affected

by financial constraints Community Private Public Partnership (CPPP)

programme revived

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Provincial Analysis – key indicators 21

Provincial Analysis – key indicators 22

Provincial Analysis – key indicators 23

Provincial Breakdown – Key Services

EC FS GT KZN LMP MPU NC NW WC TOTAL Business Registration 14.2% 6.0% 0.0% 32.3% 13.3% 16.9% 7.8% 4.6% 5.0% 5643

Busines Plans 10.0% 7.9% 10.9% 24.7% 9.7% 11.1% 8.5% 9.8% 7.3% 1638Access to markets 12.6% 7.4% 10.5% 16.2% 14.0% 16.4% 5.5% 6.0% 11.4% 2502Cooperative support 10.3% 1.0% 0.0% 11.6% 37.0% 21.6% 12.4% 6.2% 0.0% 730

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Highlights

Seda technology programme

Two new incubators established 835 clients supported 224 new SMMEs created 1,318 direct jobs; 5,461 indirect jobs created Total turnover of assisted SMMEs – R129M

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Sustainability and Impact SurveySurvey Methodology: • Independent service provider randomly selected 902 clients,

approximately 100 per province, from population of 20,000 clients.

Survey Results:• Seda’s focus on new start-ups is clear – 40% of Seda’s clients

have never been operational; • Seda’s service offering focuses on business registrations;• For 80% of operational clients, Seda has had a positive impact

on their business, especially in the area of staff turn-over, sales and customers;

• Seda had the most impact when a variety of services were provided especially when offering training & mentoring and tender advice; and

• 59% of Seda’s clients are sustainable; 41% are vulnerable (need more customers & cash flow).

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Vote 32: Seda & Stp funding

2008/9 2009/10 2010/11 2011/12

R'000 R'000 R'000 R'000

Seda 408,031 331,177 376,718 384,668

STP 76,739 68,320 76,260 110,535

TOTAL 484,770 399,497 452,978 495,203

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Future Plans

Improved use of client feedback to improve service offerings Measurement of client performance in terms of graduation, growth and

sustainability Establishment of Seda Learning Academy Increased outreach and partnerships Integrated monitoring and evaluation system development Support systems improvement and development Pro-active communication strategy

Revenue = R559.4M (R384.8M for 2007/08) External earnings = R61.7M (R28.5M for 2007/08)

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Thank you

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Provincial Analysis – Absolute numbers

EC FS GTG KZN LP MP NC NW WC

Client walk-ins

27,617 24,559 9,492 38,287 19,324 19,303 13,948 28,576 18,744

Clients registered

5,314 5,888 2,045 11,095 5,727 5,160 2,339 4,744 4,833

Clients working with

2,065 1,498 566 2,780 2,531 1,821 641 474 1,997

Business registrations

801 389 - 1,823 751 954 440 203 282

Business Plans

169 129 179 406 159 182 139 161 117

Access to markets

315 185 546 405 350 410 138 150 285

Coop support

75 7 - 85 270 158 90 45 -