VIEW ARTICLE FROM: VUTIVI BUSINESS NEWS
Lebone Litho Printers puts its money where its mouth when it comes to empowering small black owned businesses and offers generous terms of support including financial assistance, mentorship and network of opportunities.
The company’s passion to empower small businesses stems from its founder and CEO Keith Michael.
“We are a medium sized company and we are proud to be able to assist small black owned businesses, especially black women owned businesses” Michael told Vutivi News.
The company has on its database a total of 52 SMMEs from which it procures a full spectrum of services that it requires. These range from sourcing printing paper through agents rather than directly from big players such as Sappi and Mondi, to technical services from independent technicians for maintaining their machinery as well as independent contractors for distribution and delivery of their clients printed work.
Lebone Litho spends about R 70 million on black owned businesses per annum, which represents about 30% of its procurement spend. What is even more remarkable is the level of support Lebone Litho offers to its suppliers.
Michael says the company offers support in the form of financial assistance through prepayment for services, upfront deposit payment for a portion of a contract and payment within seven days of delivery. Such assistance can help a small start up service a relatively large contracts or enable an independent contractor source an expensive, imported part.
The company also offers off take agreements, which enable a supplier company to access finance from a bank and other financiers. Michael says his company has in some instances offered loans at prime plus 1%, which is more favourable than banks.
Michael says South Africa has to develop a culture of entrepreneurship- a process which starts with mentorship and support of the family structures, as entrepreneurs need support. SMMEs can also then be grown through support from both government and corporate spending, but this requires commitment and practices like consistent, timely payments.
Michael says he has seen entrepreneur struggles, especially in places like Eastern and Northern Cape as well as Limpopo, where opportunities and resources are limited. Michaels invests in companies, while mentoring and partnering their owners. He then exits the investments once the companies are established. He can point to at least three companies which have grown to be multi-million-rand enterprises.
Michael says while government owned entities like Eskom are good at supporting small business through instruments such as off take agreements, South African corporates, who have supported his printing business over the year, can also do more, except they are dictated to by boards and tend to be driven by the need to maximise profit, which limits what they are able to do.