11 Jun 2004 : Business Partners excels

Business Partners, South Africa’s leading investment group for small and medium enterprises, has announced its 2004 annual. The group now has close on R1 billion invested in South African entrepreneurs and has invested more than ever in black- and women-owned businesses during the past financial year.

"Small and medium enterprises are key to the future socio-economic success and development of our country," says Nazeem Martin, Business Partners’ Executive Director, "and an important vehicle for enabling and empowering both individuals from historically-disadvantaged communities and women."

During the 2003 / 2004 financial year, Business Partners approved 513 new investments to the value of R448,9 million. Of these, 185 investments to the value of R177,4 million were approved for historically-disadvantaged entrepreneurs and 152 to the value of R131,4 million for women owner / managers. All of these figures are up on the previous year’s figures. In 2002 / 2003, a total of R400 million was approved for investment, R113,9 million of which was approved for historically-disadvantaged individuals and R97,4 million of which was approved for female entrepreneurs.

"In line with both government strategy and the changing needs of the market, we’ve developed sound vehicles for the empowerment of black and female entrepreneurs," says Martin. "These add significantly to our internationally-recognised portfolio of investment mechanisms."

One of these is the Business Partners Umsobomvu Franchising Fund. Launched last year, the fund provides packaged investment and mentorship services for young entrepreneurs aged between 18 and 35, and focuses particularly on young black youth, with R20 million having been approved for investment in entrepreneurs from historically-disadvantaged communities to date. Early success stories are already proving the viability of the model, as young black entrepreneurs buy into franchises across all sectors, especially service stations and supermarkets. As neither the fund nor Business Partners as a whole has the same security requirements that commercial banks do, investment financing is more readily available to a wide range of existing and potential entrepreneurs.

"We look mainly at business viability when making an investment decision," continues Martin, "and consider applications from entrepreneurs who have developed a sound business plan and have the appropriate basic skills required to run the business. In the case of the Franchising Fund, we also provide built-in mentorship on both a pre-investment and post-investment basis in order to maximise the business’s chance of success."

Not only does the Business Partners model work for entrepreneurs, it works for shareholders as well, with earnings and dividends remaining steady in an increasingly-competitive environment.

Net income attributable to ordinary shareholders rose to R118,7 million from R117,9 million in the previous financial year. Earnings rose to 73,7 cents per share, while dividends remained constant at 16 cents per share.

"In a changing business and socio-economic environment, it’s important to stay focused on intrinsics," says Martin. "Business Partners has a unique operating model that is widely recognised as one of the most effective in empowering entrepreneurs and, especially, in bringing those from historically-disadvantaged communities into the mainstream economy."

An important indicator in the 2004 results is the power that small and medium enterprises have to address the country’s pressing job shortage and to alleviate the high level of unemployment. On average, 15 new permanent jobs are created with each investment and actual figures bear this out. In the past financial year, 7,400 employment opportunities were directly facilitated through investments made by Business Partners, an average of 14,42 per investment.

The potential for long-term business success - and for a positive knock-on effect on the economy - is further enhanced by Business Partners’ added-value services, including mentorship, consulting and property management, all of which are offered independently to entrepreneurs financed by the group. These services enable owner / managers to buy in the best professional and industry skills available whenever they may be required and provide an essential adjunct to Business Partners’ core investment business.

"Small and medium enterprises make a significant contribution to the economy and it’s important to ensure that this contribution can and will be sustained well into the future, concludes Martin. "Investing in entrepreneurs is an inclusive concept and encompasses not only financial investment, but investment in skills transfer, training, business support and the provision of essential supplementary services as well.

"The Business Partners model has been developed over more than 20 years of direct experience in the entrepreneurial sector and continues to demonstrate its value to entrepreneurs. We are pleased to announce our 2004 results and have budgeted a further R600 million for investment in the on-going growth and development of this sector in the 2004 / 2005 financial year."