Volkswagen’s boost for small businesses

As a subscriber to the press releases of large corporations I am often subjected to the best of the marketing world’s attempts to convince me of the brilliance of whatever new product they are launching or the longevity of some antiquated product they are trying to squeeze the last profits from before launching a replacement product a month after you finally succumbed to purchasing the item they were pushing. The press release below is completely different and that’s why I am sharing it.

I sincerely hope other large corporations follow the example and help develop SME as this is the only way to reduce unemployment in South Africa.

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Volkswagen Group South Africa’s (VWSA) multi-million rand project that is aimed at boosting local small businesses is yielding encouraging results.

The Uitenhage based Volkswagen Business Support Centre was established in April 2011 in partnership with small business incubator company Raizcorp and has 20 beneficiaries from Nelson Mandela Bay.

The small businesses receiving training and guidance from the centre have, on average, improved their turnover by almost 50% and grown their employee base by more than 30%.

VWSA has invested R10 million in the past two years and has further committed R5-million per annum for the first three years of the centre’s operation. The beneficiaries’ combined economic contribution stands at almost R35 million per annum.

VWSA Managing Director, David Powels said the success of the project was in keeping with the company’s Corporate Social Investment (CSI) goals.

“The key principles guiding us in deciding which projects to support are that they must be holistic, comprehensive and sustainable,” said Powels.  “The success of the businesses at the centre will have a broader benefit for the Eastern Cape province, which at the moment has the third highest rate of unemployment in South Africa.”

According to the Quarterly Labour Force Survey released by Statistics South Africa this month, unemployment in the Eastern Cape has risen from 29.8% to 30.2%. The businesses supported by the centre employ over 140 people. The employees – excluding the business directors – in turn support nearly 440 dependents.

Here are some of the businesses that are based at the Volkswagen Business Support Centre:

JAG’S QUALITY TREATS

Named after co-owner Jag Doolabh, Uitenhage’s only Indian cuisine take-away and spice store, approached the VW Business Support Centre for help in 2012. According to Jag’s husband Ashwin, when the couple ran the business they lacked the business acumen needed for the company to run efficiently.

After intervention by the centre and its experts, the couple has been able to train its employees, catalogue the recipes for its take-aways to ensure consistency in the food quality and focus on opening up a restaurant in the new VWSA employee sports facility.

“We first started in our kitchen, then operated out of a double garage, then moved to our premises along Caledon Street,” said Ashwin. “The guidance from the centre has also helped us to employ a manager for the store and become more efficient as a business. These things weren’t possible before.”

The business revenue has grown by nearly 75% and staff has increased from four to seven people.

BRAN SYSTEMS

The business, which provides companies like VWSA with IT and automation systems to keep production lines operating smoothly and efficiently, approached the support centre for assistance in 2011.

Strategic financial interventions helped the business’s managing member Jacob Abraham and his team to be adept at building their business brand, as well as managing and marketing the business.

The Bran Systems’ staff compliment grew from seven to nine, while its revenue improved by 70%.

“We have been able to grow by improving and expanding our existing product and service portfolio, retaining and growing our client base as well as investing in our people and systems,” said Abraham. “The programme has definitely helped us in our growth journey. We have experienced a 20% to 30% year-on-year growth in turnover. Our asset base year-on-year has increased by 40%.

“Already this year we are anticipating more opportunities, which will further contribute to growth and the expansion of our client base and product range.”

IKAMVA RECRUITMENT AND TRAINING

Recruitment, training and HR consultancy owner Nomsa Mazibuko applied to the VW Business Support Centre programme in 2012 and has been on the programme for six months.

Since joining, Mazibuko has focused on growing revenue from training at her offices in East London and Port Elizabeth. Already her involvement with the centre has seen profits for a traditionally quiet third quarter of the year exceed expectations.

“At this stage the biggest benefit is personal growth and development as well as understanding the business operations on a broader scale,” said Mazibuko. “I have also been exposed to other different business operations and networking opportunities.

“The assistance came at the time when Ikamva had to branch out from being a local to a national entity.  The business centre programme is what my business needs.

“The plan is to open and operate another Ikamva branch in Johannesburg to focus on recruitment and training. Gauteng offers better business opportunities than currently is the case in the Eastern Cape, but the Eastern Cape will remain our head office.”

KHANYISELA TRAINING

Khanyisela Training, a skills and training organisation based in Port Elizabeth, turned to the VW Business Support Centre for assistance in October 2011. While co-owner Tanya Kisten had considerable experience in education and training, her business and management abilities were limited – skills which she was able to grow at the centre.

“Our staff compliment has grown three-fold and our processes have become more efficient,” said Kisten. “We recently purchased a new building to accommodate more staff and more learners. The VW Business Support Centre has also trained me to integrate various processes regarding quality assurance and to implement more efficient strategies. It has also helped me with marketing of Khanyisela.”

Since receiving assistance for the centre, the business has grown its staff from 12 to 17 people and its turnover has increased 13% in spite of the poor state of the economy.

People who need more information or are interested in joining the programme, can contact Steve Reid (VW Business Support Centre) on 041 922 5119 or email him at [email protected]

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