How Black Umbrellas Is Thriving Through The Challenging Business Landscape
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As an enterprise and supplier development incubation organisation, Black Umbrellas partners with the private sector, government and civil society to address the low levels of entrepreneurship in South Africa.
“The programme focuses on promoting entrepreneurship as a desirable economic path and nurturing 100% black owned businesses in the critical first three years of their existence through the provision of our nationwide incubators,” explains Emmanuel Mdhluli, Chief Operating Officer at Black Umbrellas.
“Our model is aimed at supporting emerging and existing black businesses through a three-year incubation programme, so that they are able to emerge as independent, viable businesses. By providing a structured and highly subsidised programme, using a national footprint of business incubation offices, clients are afforded the expertise, office infrastructure and resources to create the necessary foundations to achieve sustainable businesses.”
Currently, BU has eight incubators in Cape Town, Johannesburg, Pretoria, Mooinooi, Lephalale, Port Elizabeth, Durban and Richards Bay.
Client insights on Black Umbrellas’ tangible impact
Here are four examples of the direct impact BU has made to each of its selected clients including their turnover, net profit/loss, net asset value and number of jobs created:
Black Umbrellas currently has clients in various sectors, including:
- Industrial engineering
- Oil equipment
- Services and distribution
- Consulting and advisory
“Even against the challenging economic climate, it is very encouraging and impressive to see growth by our clients and their businesses growing to being sustainable businesses of the future,” says Emmanuel.
Black Umbrellas’ Collective Impact
The collective SME turnover grew by 33% year on year from R2bn to R2.66bn. Job creation and preservation also saw solid growth of 15% on a year on year basis from 10 137 to 11 687 total jobs created since inception.
For the year under, BU was able to remain operationally efficient with the average cost per job figure deteriorating by only 12% on a year on year basis from R32 286 to R36 262 at the end of the financial year. Despite the drop, this figure is still extremely competitive and is testament to the continued operational prudence employed within BU to ensure that capital and resources are optimised for greater impact.
“Most enterprise development service providers focus a lot more on financing mechanisms, whereas Black Umbrellas focuses on all aspects of enterprise development that are inclusive of business management training.” - Client Testimonial
What’s next for Black Umbrellas?
Over the past 5 years, Black Umbrellas has observed a growing trend by corporates to develop their own ESD programmes internally in order to fulfil their requirements. Being that ESD is not core business for most corporates, these organisations have tended to reach out to Black Umbrellas to seek guidance and advice for their internal programmes.
This culminated in the formation of Nextgen Consulting which was officially registered in November 2017. Nextgen Consulting offers Advisory services focused on B-BBEE and Supplier Development at full market rates to corporates, Qualifying Small Enterprises (QSE) and generic companies.
This is an exciting project that will see our third year and graduate businesses benefit from an opportunity to expand their businesses.