Expanding your business through Supplier Development
As per procurement, the BEE level of your supplier impacts your BEE certificate, particularly your procurement points. Supplier development works with a supplier to your business, but not in a way that increase your purchases from that supplier, rather to ensure that the supplier is able to grow, through increased productivity, improved processes, or a cashflow injection.
Supplier development can be in the form of:
- A grant
- An interest free loan
- Interest bearing loans
- Services rendered
- Some others
For a supplier to qualify as beneficiary for BBBEE purposes, the following criteria has to be met:
- Supplier must be at least 51% black owned
- You must procure from this supplier
- You should spend 2% of net profit after tax with the supplier (over and above your actual purchases)
- Actual payment should be made in the correct financial year
In utopia you should work with a supplier that migrated from you enterprise development program (read here), who became a supplier to your business later on.
Further benefits to this include:
- Marketing angles for your business
- Community and local supplier buy-in
- Loyalty from suppliers
Watch the presentation regarding SD here:
B-BBEE Certification – Part 9
Watch the video on B-BBEE Certification. In this video, we will explore Supplier Development towards your B-BBEE certification.
To continue with the training, please continue below.