As part of an innovative "offset program" with the South African government, the GE Small Business College recently completed two successful three-day programs in South Africa. Aimed at the owners of small and micro businesses, particularly "Previously Disadvantaged Individuals," the GE Small Business College brought not only expertise and experience to South Africa's burgeoning small business class but hope and the tools to help create a brighter future.

Offsetting unemployment in South Africa

In May 1997, GE entered into an Industrial Cooperation Program - designed to generate approximately ZAR2 billion (or U.S.$300 million) of economic activity - with the South African government. As part of the cost of doing business in South Africa, the government requires all foreign corporations selling in excess of approximately U.S.$10 million to offset that business with some sort of education and training, investment, or sourcing program, with the cost or equipment essentially donated by the foreign entity.

And as vice president of business development at GE Trading (which provides marketing support through offset and countertrade services to GE and its strategic partners), it fell to Brian Casey to determine what form GE's offset programs in South Africa should take. Above all, Casey was looking to create a program that would maximize GE's investment while at the same time provide a shot in the arm to South Africa's ailing economy.

Per Ntsika, South Africa's version of the Small Business Administration, said "small businesses are responsible for 60 percent of employment and 40 percent of output in the [South African] economy" - and a major source "of job creation and black empowerment."

So it occurred to Casey that establishing a training program directed at helping small business owners would benefit everyone. As he explains, "One of the problems in South Africa today is the jobless rate. It's very high. So we were looking for ways to help the small, previously disadvantaged business owners, called PDIs. Having read information on the GE Small Business College [a networking and educational seminar designed specifically to help small business owners grow their business], I thought it would work in South Africa as well."

GE Trading's South Africa country manager and acting national executive, Roger Lambson, agreed - and even flew to the States to meet with Casey and GE Small Business College director Martha Kramer. "We talked to Martha Kramer about how successful the program had been in the U.S., particularly with minority owned companies, and it really fitted very well with the objective of the South African government. So we thought we'd run it down here."

Taking the Show on the Road

The SBC brings small business owners and GE experts together.

The idea of helping South Africa's small business owners, particularly PDIs, "increase their capacity to grow their businesses and to contribute to their own economy," really excited Kramer. Having seen the GE Small Business College successfully provide guidance and expertise to U.S. minority owned businesses, she felt confident the program could work with South Africa's PDIs too.

However, just to be sure, Kramer and her team did a bit of due diligence on how well the material would translate before committing to the project.

Their due diligence included "research about the [South African] economy, the history of the people, and the current politics and social aspects of it," says Kramer. She also needed some expert advice as to what parts of the U.S. program should stay, which parts should be modified, and which parts were best left in the U.S. So she sent copies of the Small Business College's binder (what graduates often refer to as their "bible") to local GE people and asked them to show it to their vendors, the chamber of commerce, business school people, whoever could provide some insight into South Africa's small business economy.

As it turned out, much of the existing program was usable and/or applicable. "So then we went to the next step of beginning to source and structure [the program]," says Kramer. "And we felt very strongly that we should use local instructors wherever possible."

As in the United States, the Small Business College would cover such topics as Strategic Planning, Finance and Accounting, Marketing and Sales, Recruiting and Retaining Employees, Accessing Capital, Improving Core Processes, and Sourcing to Large Entities. And because South Africa's economy depended on foreign trade and investment to a large extent, Kramer also decided to add a module on Competing Globally.

To teach the courses, sought out local subject matter experts, tapping GE people wherever possible.

"One of the unique features of the GE Small Business College is the involvement of GE associates, both as instructors and advisors," explains Kramer. "As advisors, they meet one-on-one or in small groups to help entrepreneurs determine how the content applies to their specific businesses, what changes they should make, and how to at least start implementation. The entrepreneurs typically are impressed with the GE associates' interest in helping small businesses thrive, and the GE associates enjoy the exposure to true entrepreneurship."

And while Kramer was able to find plenty of volunteers for both seminars (despite there being only 300 employees in South Africa), she also recruited subject experts outside of GE.

"So, for example, in the finance and accounting area, where we depend on someone having knowledge about how to set up a small business - how to organize it (for example, what kind of legal entity to make it), how it's affected by taxation - we thought that having the perspective of a CPA was particularly important. And so we partnered with KPMG in South Africa," explains Kramer. "Another example is conducting business globally. There was a gentleman who wrote a directory for the department of trade and industry on how to export - how to decide whether to export or not; what to export; what infrastructure you need; what other entities (like trader/broker people) you need. So we asked him to do the instruction for us."

What's Good for South Africa's Business Owners is Good for GE

A GE SBC instructor in action.

The first GE Small Business College session took place in Johannesburg from November 14-16. The second was held in Cape Town from November 20-22. "GE charged a nominal fee of about $150 USD to get commitment from the participants," explains Casey, with the balance of the tab paid through the South Africa GE Educational Trust and GE Trading.

Attendees (there were 22 small business owners at the Johannesburg session, 17 at Cape Town) were key officers of small, medium, and micro enterprises (particularly those who were previously disadvantaged) which had been in business for at least two years, had three or more employees, and sales of at least ZAR500,000 per annum.

An eclectic group, the businesses represented ranged from a wooden pallet manufacturer (who had recently switched to making doors and crates) to food importers to a small telecommunications company to security and search firms - primarily run by blacks, Indians, and women. And all agreed the program was a great success.

As one Johannesburg attendee wrote on the course evaluation: "Every segment [was] an eye opener. The beginning of a new dawn in understanding new methods [and] approaches to business." Added a Cape Town participant, "This was one of the most profitable days in business. Thank you, GE."

For Kramer, who spoke at both programs, the dedication and perseverance of the black small business owners was most impressive. Being a small business owner any place is difficult, she notes. But for black South Africans it's a real challenge. Because of apartheid, "they don't have the same educational background in many cases. They don't have the same networks. They don't have the same relationships, for example, with financial services providers. It's harder to get licensed. There are more taxes. There's a lot of paperwork. So I have a lot of regard for small business owners there who are making a go of it," she says.

She was also a bit surprised by how receptive the South Africans were to the GE Small Business College program. "I didn't know whether we'd be perceived as [just] some other U.S. program. But they were very receptive, very enthusiastic. And a lot of the feedback we got was, You need to do more of this. You need to bring this to the townships. We want access to other GE services. So that was a very pleasant surprise."

As Roger Lambson points out, "GE doesn't have a very high profile in the country - nothing like in the U.S. and Western Europe. We're not huge down here and not well known. The Europeans have a much higher profile." So this program really helped raise the level of awareness of who and what GE is in the small business community, as well as in government circles.

"It really raised a level of awareness within the Department of Trade and Industry that there is a need for this type of education for PDI companies," adds Casey. "And I look forward to doing it [again] in the future."

Indeed, thanks to the success of the initial programs, Kramer, Casey, and Lambson are already formulating plans to run the College again in South Africa in 2001, adding an extra half or full day for this year's graduates.

Says Lambson of the program, "It is helping us raise our image within government circles. And it's great for helping to market GE." But most importantly, he says, "doing this sort of thing is not only good for GE, it's good for the people of South Africa."