GrowSA_Newsletter_April_2020

NEWSLETTER EDITION 2 | APRIL 2020

Monthly GrowSA
Stakeholder Publication

Read about how to utilize Loving Thy Neighbour ON THE PAGES
a special benefit under the tells us more about Crowd
Unemployment Insurance Funding Page 2
Fund (UIF) as per the TERS Editorial

Melanie Veness, CEO Chris Hart unlocks Page 3
of PMCB, advocates for investment incentives! We shall be stronger: Old
development in alignment Mutual assisting business and
with the Digital Age more to deal with COVID-19

Page 4
Assistance from the government
available to SMEs

Page 6
The Pietermaritzburg and
Midlands Chamber of Business

Page 8
Changing your organisation from
good to great during lockdown!

Page 9
Unlocking incentives: 12J and
Employment Tax Incentives

Page 11
Love thy neighbour: Bridging the
giver-receiver gap

Page 12
Family owned business:
The original business structure

Page 14
A view from the top:
GrowSA gains momentum!

Page 15
Chamber Funding Models
Lessons from Durban Chamber

EDITORIAL DO YOU HAVE A
STORY TO TELL?
How times have changed! It appears that social distancing not
only drove us into our “shelters”, but also initiated a process The GrowSA editorial team would like to
for us to connect on a deeper and more personal way. Until a hear from our readers, how they overcame
month ago I did not know my professional colleague in Denver challenges and what they did to grow their
had a conservatory, overlooking a park, where they have businesses.
been feeding all kinds of wild animals for the past ten years.
Neither did I know that my neighbour’s mother is fading away If you have a story to tell, send us an email
alone in the frail care unit of the nursing home down the road. to [email protected] and we
But most of all I did not know of the intense concern we will all shall contact you for more information.
share about our country, our businesses and above all about
the health of our people. WOULD YOU LIKE
We are currently connected in a strange and unusual way. TO ADVERTISE?
In this edition of GrowSA News, we are providing you with
information to encourage you, to help you build your business GrowSA News will be published monthly
for the post COVID-19 economy and be stronger and wiser on the second Wednesday in an electronic
after of all this. format by BusinessDNA, the communication
Chris Hart, CEO of Impact Investment Africa, shares partner of GrowSA.
information about the Section 12J incentives with us – an
initiative that will benefit not only the less fortunate of the To place your advertisement in the GrowSA
country, but also your business. In a similar vein, Hutech shares Newsletter, contact Kamilla Venter at:
information about the assistance government made available +27 (0) 76 966 9032
to business owners and how to apply for that - a must-read in
the current situation. The article on family-owned business is Or send her an email at:
interesting and it also provides useful guidelines to enable you [email protected]
to test the strength of your family business and ensure that it can
survive for centuries – as some have! EDITORIAL
Very few of our readers probably know that the CONTACT DETAILS
Pietermaritzburg and Midlands Chamber of Business is a 170
years old. Learn more about the longevity of this chamber and BusinessDNA
its CEO, Melanie Veness, on page 6.
Our educational article for SME’s deals with building a high- T +27 (0) 76 966 9032
performance organisation during the lock-down – does it E [email protected]
sound crazy? As I said before – when the going gets tough,
the tough gets going! We can grow our businesses and, in the www. businessdna.co.za
process, GrowSA!
Enjoy the read, and please give us feedback!

Dr Amanda Hamilton-Attwell, Executive Editor

02 GROWSA MONTHLY NEWS | APRIL 2020

BUSINESS REPORT

WE SHALL BE STRONGER
OLD MUTUAL ASSISTING BUSINESS AND
MORE TO DEAL WITH COVID-19

As a founding member of GrowSA, Old Mutual has been playing a vital role in assisting small businesses in South
Africa, identifying needs and providing helpful solutions.

Thamini Sewbran, Regional General Manager • A R50 million pledge towards relief efforts In certain instances, we have partnered with
at Old Mutual Personal Financial Advice, that address immediate educational local hospitals to provide infrastructure to meet
a mother of 3 Pugs, 4 rescued fish and 2 needs, hygiene awareness, and nutritional the growing demand and to support frontline
toddlers that are 18 months apart, gives us support across several sectors. healthcare workers with basic amenities.
some insight on Old Mutual’s response to the Through our partnership with the Department
pandemic and elaborates on their partnership • Old Mutual Insure has pledged R40 of Basic Education, we are also supporting the
with GrowSA. million towards SME support during this provision of educational content to learners
period. These interest-free loans will be throughout the country via national television
WHAT IS YOUR TAKE ON HOW granted to qualifying businesses and and radio.
SOUTH AFRICA RESPONDED TO will be administered by the Old Mutual HOW DO YOU SEE GROWSA
COVID-19? Masisizane Fund. In addition, Old Mutual AS A SUPPORTIVE PARTNER TO
Insure set aside R10 million for its suppliers CHAMBERS?
This is a very complex conundrum, with upsides and service providers to help them survive Joy Page, a famous American actress, once
and downsides to every possible response. the impact of the COVID-19 disruption. said that “Information can bring you choices
There is no perfect solution, only calculated and choices bring power.” I believe this is
risk-based decisions, with necessary trade-offs. • The inclusion of the Solidarity Fund as the powerful impact GrowSA has in a fast-
I am encouraged by the decisive action of our a beneficiary on its staff payroll Giving paced world, where one can ill afford to be
President and optimistic, given the resilience of Programme in which employees, including left in the dark. Old Mutual is proud to be
the South African people, where despite the senior leaders and the Executive Team, a founding partner of GrowSA, an initiative
known losses, we continue to recognise that have already donated more than R2m. assisting business chambers via a collaboration
we are, in fact, stronger together. platform, to bring stakeholders together to
• The provision of secure space adjacent share information, identify innovative solutions
WHAT NEW INITIATIVES HAVE BEEN to its Pinelands office in Cape Town, for and pursue activities to support enterprise
IMPLEMENTED? a COVID-19 testing centre, in partnership development and economic growth.
with Lancet Laboratories.
Old Mutual recognises that COVID-19 has Thamini Sewbran,
a significant impact on our customers, service • The provision of ongoing customer relief, KZN Regional Manager Old Mutual
providers, and communities. The organisation premium payment holidays and interest-
has undertaken to contribute to the overall free loans to qualifying cash-strapped
management of the pandemic through these SME customers.
initiatives:
• Supporting national initiatives to access • Old Mutual’s executives have decided
to take a pay cut for the remainder of this
personal protective equipment for essential year and redirect that money towards the
service workers such as face masks, gloves Solidarity Fund.
and hand sanitiser to the amount of R5
million. We believe this will go a long way ANY AREA-SPECIFIC
in protecting the lives of essential service COLLABORATIONS THAT EMERGED
workers. IN RESPONSE TO THE PANDEMIC?
• R4 billion worth of life cover available to
qualifying categories of approximately The Old Mutual Provincial Management
430 000 registered healthcare workers Boards have partnered with Local Government
across South Africa. Unlike with traditional to ensure regional nuances are understood
cover offered, this is neither a product and supported. I have seen dialogue and
nor a policy, and no premiums will collaboration like never before as government
be recovered on it. No registration is and businesses pull together to make the best
required but claimants must produce possible difference to as many people as
identification, proof of family relationship possible. The areas that Old Mutual prioritised
with the deceased and confirmation of for relief efforts are health and sanitation, food
the deceased registration as a healthcare security and education. Working through
worker. initiatives such as Soap for Hope, Food
Forward, Thandanani Children’s Foundatio and
several others, we have been able to reach
vulnerable communities.

APRIL 2020 | GROWSA MONTHLY NEWS 03

GOVERMENT ASSISTANCE

ASSISTANCE FROM THE GOVERNMENT
AVAILABLE TO SMES

Small and medium enterprises (SMEs) are vital for keeping the lights on in South Africa
and it is time for business owners to take note of the impact that COVID-19 can have
on their operations and implement ways to weather the storm. Regrettably, there is no
textbook available; being able to retain forward motion can be the sole differentiator
between the drivers and survivors, and the objective remains to take control.

Small and medium enterprises (SMEs) are vital for keeping the lights • The salary benefits will be capped to a maximum amount of R17,712
on in South Africa and it is time for business owners to take note of the per month per employee and an employee will be paid in terms of
impact that COVID-19 can have on their operations and implement ways the income replacement rate sliding scale (38%-60%) as provided in
to weather the storm. Regrettably, there is no textbook available; being the Unemployment Insurance Act.
able to retain forward motion can be the sole differentiator between the
drivers and survivors, and the objective remains to take control. • Should an employee’s income as determined in terms of the income
Due to the unpredictable nature of the situation and the severity of the replacement sliding scale fall below the minimum wage of the sector
potential consequences, business leaders need to put themselves in the concerned, the employee will be paid a replacement income equal
driver seat. With the benefit of hindsight, this will be the moment they went to the minimum wage of the sector concerned.
from a victim to victor. We have the opportunity and the responsibility to
prevent this. • For the company to qualify for the temporary financial relief scheme
it must be registered with the UIF, must comply with the application
THE LEGAL PROCEDURE FOR EMPLOYEE procedure for the financial relief scheme and the company’s closure
PAYMENT COVID-19 DURING LOCKDOWN must be directly linked to the COVID-19 pandemic.

The Department of Labour has published new regulations outlining THE FOLLOWING OPTIONS WILL BE
South Africa’s new COVID-19 Temporary Employee/Employer Relief AVAILABLE IN TERMS OF EMPLOYEES
Scheme (TERS). The regulations noted that during the country’s lockdown, QUALIFYING FOR TERS:
companies will have to shut down and may have to lay employees off
temporarily. This implicates that employees are advised to take leave and PROCEDURE FOR CLAIMING UNDER COIDA
are likely to lose income. While employers are encouraged to continue
to pay employees, this may not be economically possible. To alleviate • There are a few key components to being able to claim under this
the impact, the Department of Labour created a special benefit scheme system. The following are the required elements:
under the Unemployment Insurance Fund (UIF) referred to as TERS. a. The employee must test positive for the COVID-19 virus (as
defined in COIDA).
HOW THE SCHEME WORKS b. The contraction of the virus must arise out of and happen in the
course of employment.
• Should an employer, as a direct result of COVID-19 pandemic, close c. There must be a realistic and logical explanation for the
its operations for three months or lesser period and suffer financial exposure to COVID-19, which occurred in the course of
distress, the company shall qualify for a COVID-19 Temporary Relief employment.
Benefit.
• If the above statements apply to an employee, they could be entitled
• The benefit shall be delinked from the UIF’s regular benefits and to claim under COIDA.
therefore the standard rule that, for every four days worked, the
employee accumulates a one day credit. The maximum credit days OCCUPATIONAL HEALTH AND SAFETY
payable, 365 for every four years, will not apply.
Section 8 of the Occupational Health and Safety Act, 1993 (OHSA),
• The benefits will only pay for the cost of salaries for the employees requires every employer to provide and maintain, as far as reasonably
during the temporary closure of the business operations. practicable, a working environment that is safe and without risks to the
health of its employees.

04 GROWSA MONTHLY NEWS | APRIL 2020

This duty includes: LEGAL IMPLICATIONS

• taking steps to eliminate or mitigate any hazard or potential hazard, The Compensation for Occupational Injuries and Diseases Act, 1993
before resorting to personal protective equipment; (COIDA) protects the employer from delictual liability in respect of
employees who contract illness during the course and scope of her/ his
• roviding information, instructions, training and supervision that may be employment.
necessary to ensure the health and safety of employees at work; and
• An employee, who contracts an occupational disease, can claim
• enforcing such measures as may be necessary in the interests of from the Compensation Fund without having to prove the employer’s
health and safety. Section 9 extends these duties towards persons negligence.
other than those in employment affected by the employer’s activities.
• However, if the employer was in fact negligent, the employee may
The General Safety Regulations published under OHSA prohibit an receive increased compensation, and the cost of such increased
employer from permitting a person to enter a workplace where the health compensation may be passed on to the employer in the form of
and safety of such a person are at risk. increased assessment rates.

Employers may accordingly impose rules on their employees to ensure • COIDA also only protects employers against claims arising out of
a safe working environment and, in addition, it may place conditions injuries or diseases contracted by their employees in the course and
on entry into its premises. Employers may exclude persons from their scope of employment.
premises if they do not abide by those rules. It is on this basis that entry
to building sites may be subject to the wearing of hard hats and other • Customers or clients who contract an infection due to their interaction
protective clothing. with the workplace would have to institute a civil claim, and the
standard delictual principles will apply.
In the light of COVID-19, a legitimate entry requirement may be requiring
the disclosure of recent international travel and subjecting individuals to a • Employers will need to strike the correct balance in implementing
temperature test, if necessary. The temperature test itself should be as un- measures that are appropriate for managing the health and safety of
invasive as possible, and screeners, as opposed to thermometers placed the workplace.
in the ear or mouth, are advisable.
• In anticipation of work stoppages, employers are advised to
consult affected employees in terms of short time agreements as
a retrenchment avoidance strategy. Consider alternative financial
alleviation such as halting retirement fund contributions (except for
death and disability).

The changing business landscape Hutech also introduced the following
with specific reference to the post-
lockdown phase to revive and build consulting packages:
a new economy will necessitate
companies to realign and identify • COVID-19 retrenchment assistant
creative, cost effective ways in this
challenging phase. programme and UIF facilitation

Hutech International Group, in conjunction with • Online assessment and verification
GrowSA, is proud to introduce the following
initiatives in support to member companies on Services
a national basis.
• Online training development software
The current state of affairs do not imply that
statutory compliance is irrelevant. Stay compliant with • COVID-19 temporary employee and
the Hutech HRFIN Audit Software programme (free)
designed to assess your compliance, risk areas and to employee relief scheme
prioritise these interventions! Furthermore, Hutech’s
HRFIN Wallet which offers Recruitment & Selection, • Business Strategy development and It is important to view
Industrial Relations (step-by-step guide), Training and restructuring the serious impact of
Development (online training academy) and Policy lockdown on your business
Library will be made available at a minimal monthly • Facilitation of Retrenchments
subscription. CollectNet (Time2Pay) integrated payroll
pre-paid debit cards, linked to time and attendance The following options are also available and employees so that you
and access to HR & Financial Consulting Specialist at to assist employees: are able to decide on the
additional cost when and if required. Clients can utilise
the HRFIN wallet inter-alia to address non-compliance • Healthy employees impacted by best option to utilise.
as per HRFIN audit and 80% of the day to day Human
Resources maintenance. reduced hours or temporary closure

“GrowSA” HRFIN Audit link: [email protected] • Procedure for healthy employees Hutech International
impacted by reduced hours or is able to assist your
temporary closure to claim UIF benefits business during this

• Employees who are suspected or difficult time.
diagnosed with COVID-19

• Employees who are suspected or

diagnosed with COVID-19 to claim UIF

• benefits impacAtePdRILby20a20 | GROWSA MONTHLY NEWS 05
Healthy employees

permanent closure of business

CHAMBER FEATURE

THE PIETERMARITZBURG AND MIDLANDS
CHAMBER OF BUSINESS
AN OVERVIEW OF THE THIRD LARGEST
BUSINESS CHAMBER IN SOUTH AFRICA

Collaboration, intentional intervention and a purpose-driven passion are the keys to the success of the
Pietermaritzburg and Midlands Chamber of Business (PMCB’s) over the past 170 years.

PMCB Chamber House The Chamber also collaborates on a national level with other chambers,
via membership of the Association of South African Chambers (ASAC),
to share best practice, to collectively advocate on issues of mutual
interest to members and to spread the workload for collaborative
initiatives. Affiliated chambers include the Cape Chamber, Durban
Chamber, Johannesburg Chamber, Nelson Mandela Bay Chamber (Port
Elizabeth), the Border Kei Chamber (East London) and the Middelburg
Chamber of Commerce and Industry.

The Chamber’s focus for 2020 is to stand united and its heeds a call for
ethical leadership to ensure proper community services and to identify
sustainable business and economic growth initiatives that will result in
greater equity.

They aim to implement their focus through cultivating an appreciation for
diversity and by facilitating initiatives that encourage the development of
responsive and agile businesses.

The CEO of the chamber, Melanie Veness, considers South Africa’s
diversity to be a competitive advantage. Her view is that if only like-
minded people address a need, they might miss opportunities that a
360-degree perspective that a diverse group would have unveiled.

WHERE WE COME FROM AND WHAT WE DO This chamber has been very active
during the pandemic to provide their
Pietermaritzburg and Midlands Chamber of Business (PMCB), the third members with the necessary support.
largest chamber in South Africa, originated in the 1850’s. In 2019 an Their aim is to keep business going
agreement was reached to amalgamate the ‘Afrikaanse Sakekamer’ through guidance on handling the
and the Midlands Black Business with the Pietermaritzburg Chamber current economy and acting as a
of Business. The ‘Midlands’ was officially included in the name to form liaison between the government and
what is today known as the Pietermaritzburg and Midlands Chamber of the private sector. One of their initiatives
Business. is to assist businesses to register as
essential services and to apply for
The Chamber has over 800 members and the biggest business sectors government funding opportunities.
for this chamber are commerce, industry, tourism and agriculture. Metal
processing is a focus area of the chamber, and they are in the process of
acquiring utilization of an existing gas pipe system.

PMCB, together with other large chambers in surrounding areas (known
as the KZN Business Chambers Council), have a weekly online meeting
with the KZN MEC for Department of Economic Development, Tourism
and Environmental Affairs to ensure business needs are addressed in
these challenging times.

06 GROWSA MONTHLY NEWS | APRIL 2020

DEVELOPING YOUTH TO BE READY FOR THE Melanie Veness, PMCB CEO
NEW DIGITAL ECONOMY
Melanie Veness joined the Chamber team
According to a research project initiated by Melanie, the biggest in 2011 and was the first women in this
challenge for young people in communities surrounding Pietermaritzburg position since the Chamber was established
is access to the economy., a 170 years ago. She regards it her duty
to represent her members wherever she
In view of the high youth unemployment in the area, the PMBC can, to their benefit. She is not scared
developed interventions to address the need. to move boundaries to achieve this! The
first thing she realised in this role was that
The Chamber’s first response to this challenge was to create opportunities nothing is impossible if you take the time to
for the unemployed youth to acquire technical skills and, secondly, to understand the process.
work on a sustainable training model to keep this initiative running!
Their goal is to open a fully equipped training centre for training these
“You can take everything away from a person, but you cannot take away skills, technicians for additive manufacturing and even teaching different
their skills, says Ms. Venness. languages.

They have successfully trained 60 young people. The next step was Another exciting project that they are currently working on in
to provide these young people with entrepreneurial training and to collaboration with five other big chambers is to open foreign markets
introduce them to the labour force through contractors who committed to for emergent SMME’s. Each chamber is responsible to introduce 40
employing them. businesses to the export incubator. More about this in the future.

The Chamber is not only concerned with current needs, but also CHAMBER CEO HAS WHAT IT TAKES TO
identified opportunities for young people to acquire skills for upcoming DEVELOP SMALL BUSINESSES
high-demand jobs. In pursuit of this, they got funding to train 20
unemployed agricultural graduates to become drone pilots. About five years ago, Melanie met Mishack who wanted to start a small
business. She helped him to start his sand business, which resulted in him
Their goal is to open a fully equipped training centre for training these supplying sand to all the ‘Build It’s’ in the area and he currently has a fleet
skills, technicians for additive manufacturing and even teaching different of 42 trucks.
languages.
She feels that she is extremely blessed to have the ability and know-
Another exciting project that they are currently working on in how to help people, to be creative in attending to their needs and to
collaboration with five other big chambers is to open foreign markets build customized programmes for the communities. However, the most
for emergent SMME’s. Each chamber is responsible to introduce 40 important part is the opportunities that collaboration brings! The support
businesses to the export incubator. More about this in the future. she gets from the community made it easy and a privilege to implement.

CHAMBER CEO HAS WHAT IT TAKES TO
DEVELOP SMALL BUSINESSES

About five years ago, Melanie met Mishack who wanted to start a small
business. She helped him to start his sand business, which resulted in him
supplying sand to all the ‘Build It’s’ in the area and he currently has a fleet
of 42 trucks.

She feels that she is extremely blessed to have the ability and know-
how to help people, to be creative in attending to their needs and to
build customized programmes for the communities. However, the most
important part is the opportunities that collaboration brings! The support
she gets from the community made it easy and a privilege to implement.

“If a community feels that your
intentions are pure and your
whole heart is into helping
them, you will never lack
support!”

APRIL 2020 | GROWSA MONTHLY NEWS 07

EDUCATION REPORT

CHANGING YOUR ORGANISATION FROM
GOOD TO GREAT DURING LOCKDOWN!

“Good is the enemy of great’” says Jim Collins, the author of From Good to Great (www.academia.
edu/17471551/Good_to_Great_by_Jim_Collins). The reason is that most organisations are just fine with being
“good,” but it is possible to become “great” if you focus on the right things. And the best news is that you can
achieve “greatness” during lockdown. It is not as daunting as it sounds. Are you game? Let’s go!

LEVEL 5 LEADERSHIP A CULTURE OF DISCIPLINE
A Level 5 leader has two profound characteristics – a person with The real question is if you have the discipline to do the right thing once
extreme personal humility and intense professional will. They are you know what it is (and to stop doing the wrong things). A culture of
incredibly ambitious, not for themselves to be recognized, but for the discipline is based on a duality – to adhere to a system identified using
institution or the business to be successful. To succeed on this level, you the hedgehog principle, yet the freedom and responsibility to work
will define the results you want to achieve in clear terms and you will within that framework to achieve greatness. It is about disciplined people
know what must be done to achieve it. When the results are achieved, engaging in disciplined thoughts about what must be done and then to
the Level 5 leader will look through the window to see who made this take disciplined action.
happen and not in the mirror to take the credit themselves.
TECHNOLOGY ACCELERATORS.
FIRST THE WHO THEN THE WHAT COVID-19 forced us to use technology on a level that we have never
This is a fascinating concept for the current time – first ensure that you done before. The key question you need to ask is: Which technology
have the right people on the bus, in the right seats, then decide where to supports your hedgehog concept? What do you need to use to become
drive to. Having the right people on the bus is the answer to the question the best in the world?
– What type of people do I want to surround me with on this journey? If
you have the right people, you will not have to motivate them to join your To conclude, it is possible the take your organisation from being good
journey. to being great – it all starts with that decision to do it and then take the
disciplined steps to get there. You have two weeks ahead of you…
CONFRONT THE BRUTAL FACTS
The Stockdale Principle is the core of this element. The principle This report is based on “From Good to Great” by Jim Collins, 2001, Random House
originated in a prisoner-of-war camp in Vietnam. The Stockdale Principle
is that you must never lose faith that you will prevail in the end, but you BREAKTHROUGH!
must have the discipline to confront the most brutal facts of your current
reality. BUILDUP...

HOW APPROPRIATE THIS IS FOR OUR CURRENT LEVEL 5 FIRST WHO, THEN CONFRONT THE HEDGEHOG CULTURE OF TECHNOLOGY
SITUATION? BRUTAL FACTS CONCEPT DISCIPLINE ACCELERATORS
Ask the questions, engage in dialogue and debate, conduct autopsies LEADERSHIP WHAT
without blame, find the red flags that cannot be ignored, but face reality.
Your leadership role is not to focus people on the vision of greatness; DISCIPLINED PEOPLE DISCIPLINED THOUGHT DISCIPLINED ACTION
it begins with confronting the brutal facts, acting on the implications,
knowing that you will survive. FLYWHEEL

THE HEDGEHOG CONCEPT “Breakthrough results come about by
The hedgehog simplifies a complex world into one overall concept. They a series of good decisions, diligently
see what is essential and ignores the rest. Great companies use a very executed and accumulated one on top of
simple idea and use that as the frame of reference for all their decisions - another” Jim Collins
and this got them to break-through results. The hedgehog concept flows
from a deep understanding of the following three things:

• What can this organisation be the best at in the world?
• What drives your cash flow and profitability?
• What are you deeply passionate about?

08 GROWSA MONTHLY NEWS | APRIL 2020

GOVERNMENT INCENTIVES

UNLOCKING INCENTIVES
12J AND EMPLOYMENT TAX INCENTIVES

Helping the small business owners in townships and rural areas not only boosts the economy, but enable them to
become part of the formal sector!

MAKE YOUR TAX WORK The South African economy and its business Chris Hart, CEO of Impact Investment Africa
FOR YOU, SARS SUPPORTED community were already in a weakened
INVESTING - S 12J state before the COVID-19 pandemic shut the The incentive can be accessed through the
economy down. But there is a ray of hope in numerous S12J-registered service providers –
lntroducing Section 12J a SARS approved the form of Section 12J of the Income Tax Act. of which there are more than 100 – each with
Investment Opportunity that allow Tax Payers The Section 12J tax incentive can be used to their own unique structure. The S12J provider
to divert their Tax Payable into a 100% Tax inject capital into small businesses.. that considers financing all types of SARS-
deductible Investment. approved businesses is Impact Investment
The net effect of using the incentive is that a Management.
This section allows an investor to deduct the small business can be placed on a sustainable
full cost of their investment into an approved growth path and at the same time, create In addition to the S12J incentive, the
S12J company against their taxable Income. much needed jobs. Employment Tax Incentive is another powerful
This benefit is available to individuals, tool that businesses can harness in order to
companies and trusts, and can be utilised The Section 12J Tax Incentive is proving to be help dent the massive youth unemployment
against normal income as well as Capital an effective measure to raise capital. It is also problem South Africa faces. This allocates
Gains Tax. long-term capital for the company and capital tax money towards youth training initiatives
raised can be substantial. It is not limited to the ,geared to help lift our youth into becoming
THERE IS ALWAYS A SILVER relief funds that have been set up, which have economically active. This comes at no cost or
LINING! been quickly depleted. obligations to the sponsoring company. This is
an incentive that could significantly decrease
The COVID-19 pandemic might open up S12J is essentially a SARS approved tax youth unemployment if more companies
opportunities that could help South Africa incentive mechanism, which allows the investor would use it.
and its business community to recover quickly to deduct the investment amount from their
and actually thrive, according to Chris Hart, income for income tax purposes, resulting in a Both these incentives have greater potential
executive chairman and CEO of Impact drastical reduction in the cost of the investment. to get South Africa back on its feet than any
Investment Africa. The investment cash flow implications can be of the rescue measures that have so far been
virtually eliminated through a geared structure, placed on the table.
further enhancing the S12J incentive.

DIRECT REGULARY BENEFITS DIRECT FINANCIAL BENEFITS

B-BBEE Scoreboard Employment Tax Back Claim
Ownership Incentives Skills Development Levy Claim

Skills Development Section 12J Tax Reduction
Enterprise Development Enhancement Building Balance Sheet
Enhancing Cash Flow
Supplier Development Cash Management Fund Lifting Profits
Socio Economic Development
PROCESS Incentive Driven
CSI No Cost To Company
SDL CLAIM
Meeting Compliance Improving S12J INVESTMENT
Outcomes Minimal Disruption

ETI CONTRACT

APRIL 2020 | GROWSA MONTHLY NEWS 09

Creating Africa solutions
for Africa problems
through Impact Investing.

As an impact investment company, We have designed various
Impact Investment Africa focuses on Funds which align to our unique
investments that, along with generating Impact Investing strategy:
healthy returns for investors, seek to
achieve a positive and measurable socio- 1. Cash Management Fund
economic and environmental impact. This fund has been set up to trade

Africa’s financial markets are characterized by Capital Markets to generate a yield gain
their high costs, lack of investment channels, exceeding traditional Money Market
low investment ratings, low liquidity, limited Yields. The fund will invest in tradable
access to appropriate financial instruments and money and capital market instruments
a limited understanding of true impact investing. along with bank fixed deposits with a
We aim to address these shortcomings by short maturity date where appropriate.
creating a listings pipeline, generating additional The fund will seek to take advantage of
investment channels that provide liquidity trading opportunities in both South Africa
and capacity. We aim to facilitate economic and Botswana.
expansion through innovative structuring and
the use of the latest technology and product 2. Section12J Investment Strategy
design. The Income Tax Act in South Africa

PLEASE CONTACT US FOR ANY FURTHER provides an attractive tax break for
INFORMATION: high net worth individuals as well
as medium sized businesses. This
Office: (011) 480 8634 encourages investment into approved
E-mail: [email protected] Venture Capital Companies (VCC’s) such
www.impactinafrica.com as ours. Apart from the enormous tax
incentive companies who invest with us
Chris Hart, Marinda Shekleton, Dave Humphrey will receive; benefit via their Enterprise
Development and Corporate Social
Investment Allocation, also improving
their BBBEE scores.

3. Supplier Development Fund
Enterprise Supplier Development is a

combination of Preferential Procurement,
Supplier Diversity, Supplier Development
and Enterprise Development programs
to service business needs. It is part
of the Broad-Based Black Economic
Empowerment policy to advance
economic transformation in South Africa.
We have created an ESD Fund to ensure
investments are done appropriately.

CROWD FUNDING

LOVE THY NEIGHBOUR
BRIDGING THE GIVER-RECEIVER GAP

Even though the South African government plays a vital role in assisting
underprivileged communities and households, businesses need to get more involved
and help to make a difference!

Businesses have always had budgets for community projects, but spend your CSI budget. Loving Thy Neighbour believes in creating a
how and where to invest the available funds is often a problem. They sustainable impact and value for the communities in which they operate.
often have no proper procedures to provide intentional, strategic and They use an integrated community engagement approach that includes
sustainable assistance. On the other side of the equation, those in need ongoing engagement with and assessment of the needs of communities,
often do not know how to access funding. Loving Thy Neighbour was which is significantly more effective than making once-off contributions
established to address this giving-receiving gap. and donations to projects in isolation.

In December 2019, there were 210 662+ registered non-profit In the current socio-economic climate in our country and Africa, many
organisations in South Africa and most of them struggle to find charitable organisations are not receiving the support they once enjoyed.
proper funding and support. With Covid-19 gripping the world, things are getting even worse but the
demands on these organisations to assist people in need are increasing.
Loving Thy Neighbour was established in 2017 as an online fundraising Now, more than ever, society needs to recognize the plight of the people
platform where donors (givers) and charities (receivers) can connect. affected by the current economic situation caused by the lock-down.
Loving Thy Neighbour provides givers the assurance they need by vetting
each receiver, making sure they are tax compliant and that they do a
financial audit annually. It also facilitates receivers to showcase the
impact they are making and to become more visible.

Loving Thy Neighbour provides training in digital communication,
social media marketing, campaign planning and support as well as
financial training to the charities they list. The financial management
system provided to charities by Love Thy Neighbour includes a system
for donations, collections and payments. By browsing through the 30
categories, donors can identify organisations involved in their favourite
cause, e.g., youth development and education. Likewise, organisations
supporting the needy can access donors in a credible way.

The Loving Thy Neighbour platform is provided at a minimal fee to the
charitable organisations and enables receivers to focus on assisting
people receiving donations from anywhere in the world.

There are more than 1200 listed projects and more than 400 LTN Projects and Training
organisations already listed on the platform. More than R1 Visit www.lovingthyneighbour.org and become part of the solution.
million worth of donations are received monthly, making it
possible for non-profit organisations to continue their excellent Adapted from an article written by Hano Jacobs (Board Member) and
work. Esther Taljaard (Head of Operations)

To join the Loving Thy Neighbour network, go to
www.lovingthyneighbour.org and sign up as a giver (donor) or receiver
(non-profit) organisation, by clicking register today! You can become a
part of the Corporate Giving program and let them help you responsibly

APRIL 2020 | GROWSA MONTHLY NEWS 11

INDUSTRY REPORT

FAMILY OWNED BUSINESS
THE ORIGINAL BUSINESS STRUCTURE

Family businesses were the first form of a commercial entity. Through the aeons,
the challenges remained the same – sibling rivalry, succession planning and the
incompetence of some members of the family. However, this form of business is
becoming increasingly popular and several family-owned businesses have survived
for centuries.

STEWARDSHIP

The person at the helm of a family business needs to be more than just
a business leader; this person must have an in-depth understanding of
business, of leading a business and a passion for the family.

Market demands forced the leadership of family businesses to be less
traditional and more adaptable. As successful family businesses grow
into larger companies, management teams from outside the immediate
family had to be appointed, changing the way the family business
operated. Governance structures and tools, such as a family business
constitution, advisory committees, family forums and proper succession
planning remain vital for family businesses to survive from generation to
generation.

Andre Diederichs, FABASA FAMILY BUSINESSES
THAT SURVIVED FOR
A family business or family-owned business may be defined CENTURIES
as any business in which two or more family members are
involved and the majority of ownership or control lies within a • Kongo Gumi, a Japanese construction company,
family (Inc, 2020). began as a temple restoration business in 578
and was assimilated as a subsidiary in 2006. This
Balance and stewardship are the underlying ingredients that keep family company’s motto was: “Challenge new things with
businesses together, says André Diederichs, Business Strategist and new perspectives.”
Accredited Family Business Consultant.
• Hoshi Ryokan, a hotel in Japan, was founded in
BALANCE 718. Their motto: “Take care of fire, learn from water,
cooperate with nature.”
It is imperative to maintain a balance between business needs and family
needs. For instance, the balance will be disturbed if the business expects • Marchesi Antinori, an Italian winery, was founded in
profits to the detriment of the family members. The opposite also rings 1385. Their motto: “The pursuit of excellence.”
true - when family members demand financial benefits to the detriment of
the business. • John Brooke & Sons Holdings Ltd, United Kingdom,
is a textile company founded in 1541. Their:
12 GROWSA MONTHLY NEWS | APRIL 2020 “Whatsoever thy hands findeth to do; do it with thy
might.”

75% OF THE WORLD’S SUCCESSFUL BUSINESS
STARTED AS A FAMILY BUSINESS

In an interview conducted by André Diederichs, Carl van der Merwe from Boplaas in the Koue Bokkeveld
– South Africa’s oldest family business - explained the fact that they have been thriving for nine generations.
“From generation to generation, we were taught that Boplaas doesn’t belong to the present generation, but
it is merely borrowed from the children of future generations.” This statement again reflects the importance of
stewardship. No family business will survive in the long-term without it.

In the book, Manage family in your family business (2007), Gideon Maas and André Diederichs concluded
that, for a family business’ management system to be effective, it must take the following into account:

1 The strengths and personal vision 4 Create a business mission and goals
of each family member. Remember statement that will drive the business

to write them down to avoid vision strategy.

changes at a whim.

2 The image that the family wants 5 Develop a straightforward and
to project and how it would like detailed business plan or business

outsiders to perceive the family. strategy document.

3 The family’s values, which must be 6 The ’rules‘– formulated in a family
realistic and not merely window- constitution – that govern the

dressing, should be set out in a behaviour and responsibilities of the

formalised statement. different family members.

André Diederichs is a leading consultant in family-owned 7 There must be regular formal family
businesses and the head of his own family business. His meetings at which matters can be
passion is “to enable family owned businesses to create
positive futures for both family and business.” He can be discussed.
reached on 082 453 3288 or awdiederichs@mweb.
co.za 8 There must be a formal family board
(advisory board), comprising family
FABASA (Family Business Association of South Africa) can
be reached on 021 556 4719, or at www.fabasa.co.za or and non-family members, that can
email [email protected].
help the business grow.

9 There must be detailed control
measures so the degree of adherence

to the values and rules of the business,

RECOMMENDED READING and the extent to which the business’
William T. O’Hara (2004) Centuries of Success, 2004,
Adams Media Corporation objectives are being achieved, can
Gideon Maas and Andre Diedericks (2007) Manage
family in your family business, Frontrunner Publishing (Pty) be measured regularly. If you cannot
Ltd
measure these facets, you cannot

hope to manage the journey you are

undertaking properly!”

APRIL 2020 | GROWSA MONTHLY NEWS 13

INDUSTRY REPORT

A VIEW FROM THE TOP
GROWSA GAINS MOMENTUM!

GrowSA is a platform developed by organized business for organized business.
GrowSA is not a membership organization and therefore collaborates with all the
national organized business bodies in South Africa. We truly believe that to grow
South Africa, we need all stakeholders to collaborate as the task at hand is far bigger
than any person or organization – Together, we can grow South Africa!

March 2020 will probably always be remembered as the month that We realize that the world we live in has changed forever. Now, more
South Africa almost came to a complete standstill, with the President than ever before, we need each other. We need a caring, sharing and
having announced the State of a national lockdown due to the helping business community. Let’s take hands to grow SA and unlock new
COVID-19 epidemic. Yet, for GrowSA, it was all but a lockdown. opportunities, create jobs, and rise to the occasion.
GrowSA took significant strides forward in March 2020. As our President said – South Africans are resilient people. We will rise
again!
March saw the publication of the first monthly GrowSA Newsletter and
the first two GrowSA Engage weekly news flashes. These are the ideal GrowSA at Middelburg Chamber Banquet
vehicles to share information, news, ideas and solutions for Chambers
and their members. I would like to thank each and every contributor
and advertiser for your support. I would like to thank Business DNA, our
communication partner, for quality and professional products and we
look forward to the introduction of more communication initiatives soon.
As the saying goes: “Watch this space!”

Before the lockdown was announced, GrowSA participated in the
117th annual gala dinner of the Middelburg Chamber of Business
in Mpumalanga. The theme of the evening was how to revitalize the
township economies, with GG Alcock as the keynote speaker. It was
heart-warming to see the role the Chamber was playing in its community
with regards to lobbying, training, and networking. Congratulations
AnnaMart and your team!

Then came the lockdown and I am excited to announce that our
partner “WorldClass Summits” immediately rose to the occasion and
within a very short time, they put together a highly successful free online
COVID-19 Summit. The presentations are still available online just click
on www.worldclasssummits/COVID-19. We will soon announce the
Small Business Summit and later this year the Family Owned Business
Summit as planned in collaboration with World Class Summits. Thank you
Carl, it is an honour to partner with you.

We have been contacted by several Chambers to assist them with online
webinars, conferences and collaboration tools. Again, our partners rose
to the occasion and we were able to meet the Chambers’ requests. We
will soon make these tools available to all the Chambers – watch your
mail for more information.

14 GROWSA MONTHLY NEWS | APRIL 2020

CHAMBER FEATURE

CHAMBER FUNDING MODELS
LESSONS FROM DURBAN CHAMBER

The Durban Chamber of Commerce and Industry was established in 1856 and is one of the oldest and largest
metropolitan chambers in Africa. The Durban Chamber’s ongoing purpose and reputation can be attributed to the
fact that they strive for collaboration on every level.

Palesa Phili has been captain of the Durban Chamber ship since May The Anglo-Saxon Model provides for no guaranteed access for the
2018. She was strategically selected for the position from the corporate government, chambers have a voluntary membership and have the
world. She accepted the position in pursuit of her burning passion, which freedom to act 100% in the interest of their members. This is also the
is to make an impactful difference! current model followed in South Africa.

Palesa’s first task as CEO of the Durban Chamber was to refocus and COVID-19 LIFE AS WE KNOW IT
enhance the reputation management of this historic organisation. She
quickly did just that by understanding and articulating member needs. With economic activity currently put on hold, a recent Durban Chamber
Her advice to other entities is to ensure that you have a great team survey indicated an estimated 73.8% of local businesses would have
behind you; this ensures that she can trust processes to run smoothly while to lay off workers within 3 months if the current business climate were to
she diverts her attention to more significant issues at hand. continue.

Palesa wakes up excited to go to work every day because she is doing The Durban Chamber believes that the economic effects of COVID-19
what she loves! are both exogenous and endogenous. The public and private sectors will
have to pull together and formulate workable solutions!
CHAMBER FUNDING MODELS
Given this projection of decreased business and consumer levels, the
One of the critical aspects of running a chamber effectively is to ensure Durban Chamber believes that the government’s stimulus packages, as
that the correct operational models are implemented. Palesa shares her well as fiscal and monetary policy adjustments, need to be adequate to
view on chamber funding models and her thoughts on the ideal one support all businesses, and most especially SMEs as these businesses are
for South African business. The models are based on the relationship crucial to inclusive and sustainable economic growth.
between two factors: the degree of independence relative to the degree
of government funding. Chambers also face the danger of losing membership due to businesses
that are in distress being unable to afford subscription fees. Other funding
She firstly refers to the Public Model or also known as the Conservative sources such as events are compromised and have been delivering
Funding Model. This model provides that chambers are fully government- decreased revenue in the recent past. Issuing certificates of origin is
funded but has almost no independence from government influence. insufficient to sustain the chambers.
Countries such as China, Italy and Egypt make use of this model.
For chambers to continue to make an impactful difference in their policy
The next model is known as the Continental Model, which provides that and advocacy work, collaboration is key! Palesa suggests a combination
the chambers are overseen by government, yet still entirely funded by the of the Continental and Anglo-Saxon Model to be best suited for South
government as well. Countries such as Germany, Morocco and Croatia Africa. Chambers need government funding but also require a healthy
make use of this model. measure of independence from the government to advocate for South
African businesses properly. The government’s relationship with chambers
Chambers governed by these two models have no sleepless nights on needs to be viewed as a partnership where compromise will have to
fundraising initiatives and can focus all their time on advocating for their be reached, governed by the principle of democracy and freedom of
members. speech.

The Asian Model requires only partial government funding for chambers, Palesa urges all South African chambers to advocate for this combined
whereby the government has limited influence. Countries such as Japan, model because together we can make a difference!
Kuwait and Thailand make use of this model.

Chambers, under the Eurasian Model, have a voluntary membership
basis, which is self-funded. The government has almost no influence and
countries such as Mexico, Angola and Russia abide by this model.

APRIL 2020 | GROWSA MONTHLY NEWS 15

EURASIAN CHAMBER
MODEL MODELS

FUNDING ACROSS THE
Voluntary Membership WORLD
GOVT ACCESS
No Official status The Relationship between Funding
ACTIVITY and Independence
Members define mandate
DEGREE OF CHAMBER INDEPENDENCE CONTINENTAL
Mexico, Angola, Kenya, MODEL
Uganda, Czech Rep, Russia,
Canada, Brazil FUNDING
Full Govt funding
ANGLO-SAXON GOVT ACCESS
MODEL Guaranteed
ACTIVITY
FUNDING Govt supervised
Voluntary Membership
GOVT ACCESS France, Germany, Greece,
No Guaranteed access Netherlands, Spain, Qatar,
ACTIVITY Turkey, Ghana, Namibia
Freedom to act for business
PUBLIC MODEL
South Africa, Nigeria,
Australia, Israel, UK, FUNDING
Switzerland, Argentina, USA Full Govt funding
GOVT ACCESS
ASIAN MODEL Guaranteed
ACTIVITY
FUNDING Regulated by law
Partial Govt funding
GOVT ACCESS China, Vietnam, Saudi
Guaranteed Arabia, Egypt, Libya, Italy,
ACTIVITY Cuba, Albania, Afghanistan
Limited by Govt

Japan, Indonesia, Kuwait,
Singapore, Thailand,
Pakistan, Bangladesh

LEVEL OF STATE / GOVERNMENT FUNDING

16 GROWSA MONTHLY NEWS | APRIL 2020