During these strange and difficult times with the worldwide pandemic, most business owners are trying to tighten the purse strings on the business as the pandemic has had a massive negative impact on all businesses across all industries. The last thing people want to hear is that they have to spend money to maintain or promote the BEE level of the business.
Unfortunately, the BEE mechanism requires continuous attention not to be caught off-guard when financial year-end comes knocking. This is a hazard that business owners must stay aware of in the back of their minds to adhere to the targets set for their business according to their BEE plan and to actively execute on this, even during these challenging times.
As we have seen in these past 12 months, things can change overnight, for better or worse, and business owners must try to be in a position to benefit from a good BEE rating when things start taking a positive turn. These businesses will then be in a great position to attain work and contracts that others missed out on when the time comes.
Many business owners feel they do not need a BEE rating. This does not impact their business and clientele, however, there is an important element to remember and this is called “Procurement”.
The element of procurement, in most industries, is structured in such a way that your business benefits from obtaining products or services from certain suppliers, and conversely, your business can suffer due to this.
When calculating this element, your business can score more points, or less, depending on who your suppliers are.
So with this in mind, you might think that you do not need a BEE rating as you do not work with the government or tender for projects. If you do not have a good BEE rating, they (your client) will not be scoring as high on their procurement element scorecard, and subsequently, they might decide to replace you with an alternative supplier.
In the same breath, you can improve your BEE rating by using suppliers who are BEE compliant and have already obtained a good rating.
Conclusion
As a business owner, you need to strongly consider whether you can risk losing business in a time where it is already an economic bloodbath because your BEE rating was low or not done at all.
You might find that you can easily score a decent rating without changing much in how your business operates or who you do business with, and this might just boost your business out from underneath this dark COVID-19-economic-climate.
SEESA will guide our clients to strategic B-BBEE Compliance with expert insights and guidance.
About The Author:
Leonard Nieuwoudt is a BEE and Labour Legal Advisor in the Polokwane Office. He is an Admitted Attorney with an LLB degree & BCom Business Management degree, obtained from the University of North-West.
References:
The Amended B-BBEE Codes of Good Practise.