It’s fantastic news for small businesses that some of the country’s largest firms have committed to paying SMEs on 30 days. It’s really great. As any small business owner will tell you, managing cashflow is your biggest headache, caused usually by a bigger company with lumbering, painfully slow internal processes and scant regard for the impact on suppliers.
Called the #PayIn30 campaign, it was launched by Business for South Africa (B4SA), the South African SME Fund and Business Leadership South Africa (BLSA); and also involves Business Unity South Africa (Busa), the Small Business Institute (SBI) and the Black Business Council (BBC).
That is a lot of acronyms which will hopefully help South Africa’s 2.5m SMEs, which employ about 10.8m people – incidentally the same number of unemployed people before the lockdown.
Expecting the number of companies to increase, BLSA CEO Busi Mavuso said #PayIn30 is aimed at “institutionalising a culture of early payments of SMEs”.
Discovery Group CEO Adrian Gore, a brilliant entrepreneur himself who is also chair of the SA SME Fund, added: “As a society, we need to start implementing bold actions to grow our economy and preserve and create jobs. I believe entrepreneurs are a powerful force and an integral part of this rebuilding”.
From a small business owner who often has to fight through the unnecessary long and complicated internal processes of big business, it’s music to one’s ears.
To thank them, I will name the companies and CEOs or executives in the press release. Often these names appear in this magazine for quarterly results or bad news. Today, they are deservedly in the news for their “ethical leadership” as one CEO called it. They are, in alphabetical order: AngloGold Ashanti interim CEO Christine Ramon; Aspen Pharmacare senior executive Stavros Nicoloau; bp Southern Africa CEO Taelo Mojapelo; Clientèle MD Basil Reekie; Coronation Fund Managers’ Anton Pillay; ENSafrica chair Michael Katz; Gold Fields CEO Nick Holland; Investec; Liberty Holdings; JSE CEO Leila Fourie; Kele Mining CEO Jomo Khomo; Massmart CEO Mitch Slape; Jeanette Marais, deputy CEO of Momentum Metropolitan and CEO of Momentum Investments; Multichoice CEO Calvo Mawela; Naspers CEO Phuthi Mahanyele-Dabengwa; Nedbank CEO Mike Brown; OUTsurance CEO Danie Matthee; RCL FOODS CEO Miles Dally; Redefine Properties CEO Andrew Konig; Remgro CEO Jannie Durand; Sanlam Group CEO Paul Hanratty (who should also be thanked for his organisations ongoing support for financial journalism through its awards); Sasol EO Fleetwood Grobler; Sibanye-Stillwater CEO Neal Froneman; Sabine Dall’Omo, Siemens CEO for Southern and Eastern Africa; and Telesure Investment Holdings CEO Tom Creamer.
This kind of sea change is frankly long overdue. Big companies have often behaved like bullies with smaller firms, the world over, and expect the smaller businesses to put up with it or risk losing the work. Big businesses tend to have much more cash in the bank, so they can wait two or three months for their invoice to be settled. Not many small businesses can stomach a three-month delay on all invoices, but are forced to by the slowness of payment mechanisms of those big firms.
As Kele Mining CEO Jomo Khomo said: “this is the type of ethical leadership we need in a crisis.” Indeed we do.
This article first appeared in the Financial Mail.