How a small business can qualify for a BEE certificate

Feb 23, 2017 by

BEE for Small Enterprises

Broad-based Black Economic Empowerment (B-BBEE) is an initiative that the South African Government launched to enable Black individuals in our country to participate in the economy fairly.

The BEE Act promotes the B-BBEE ‘Codes of Good Practice’, which provides the structure for the BEE scorecard as well as the rules associated with claiming BEE points. If you are on a high level of BEE certificate, you can claim more BEE points.

If your company has a BEE certificate then your customers are awarded points on their BEE scorecards for buying from your business. Therefore, buyers are likely to choose a supplier based on their BEE score.

Qualifying Small Enterprises (QSEs)

QSE is a business that turns over: more than R10 million but less than R50 million. QSEs are usually family run businesses that cannot have additional people at ownership level; however, to start supporting the BEE initiatives, QSEs can:

  • Employ black staff
  • Buy from BEE certified supplies
  • Support black businesses

To be certified, QSEs need to use all 5 elements on the BEE scorecard. This includes, Ownership, Management Control, Skills Developments, Enterprise and Supplier Development and Socio-Economic Development. If the QSE is 100% Black Owned, it automatically qualifies a Level 1 BEE Supplier; if the QSE is 51% Black Owned, it automatically qualifies a Level 2 BEE Supplier.

QSEs must qualify under 1 of the following criteria to secure a BEE certificate:

  • A minimum of 25% of cost of sales (this excludes labour costs and depreciation) must be procured from local suppliers/producers in South Africa.
  • 50% of jobs are reserved for Black people.
  • A minimum of 25% of raw material/beneficiation, including local production/ manufacturing, assembly and/ or packaging, must be used.
  • A minimum of 12 days a year should be spent assisting EMEs and QSEs beneficiaries to increase their production/ financial capacity.
  • A minimum of 85% of labour costs should be paid by service industry entities to South African employees.

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