OVERVIEW

TEP PRODUCTS AND SERVICES

WHAT ARE THE BENEFITS OF BELONGING TO TEP?

WHAT DOES IT COST TO BE PART OF TEP?

MONTHLY REPORTING

TEP STRUCTURE

CLIENT LEVELS

CRITERIA/REQUIREMENTS FOR REGISTERING WITH TEP

DEFINITIONS

WORKFLOW

STARTING THE PROCESS

 

 

OVERVIEW

 

The Tourism Enterprise Partnership (TEP) is one of the most successful enterprise development organisations in South Africa. The main objectives of TEP are Job Creation, Transformation and Sustainability, within the tourism industry.

 

Job creation (and as a result Transformation and Sustainability) is achieved by TEP in the following manner:

·         Providing assistance and funding support to ensure that the product (Client), is operationally efficient, has good service levels and the required skills to be sustainable;

·         Providing assistance and funding to quality products for market access;

·         Market access leads to higher occupancy or use of the product, thereby increasing turnover;

·         Higher turnover and sales lead to increased staff requirements and possible job creation.

 

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TEP PRODUCTS AND SERVICES

 

TEP offers a wide-range of services and solutions. These include:

 

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WHAT ARE THE BENEFITS OF BELONGING TO TEP?

 

Registered TEP clients, having paid the annual administration fee, gain access to:

·         Relevant and up to date industry information;

·         A network of like minded business owners and entrepreneurs through TEP’s Information Portal and events;

·         Discounted services such as skills development and market access;

·         The Business Development Fund (BDF), which can assist with up to 50% cost sharing of pre-approved business services.

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WHAT DOES IT COST TO BE PART OF TEP?

 

Based on international best practice with regard to enterprise development cost sharing, TEP charges an annual administration fee of R600-00 (600 ZAR), and a commitment fee of 10% per service used.

 

Having worked towards a sustainability model for the past three years, TEP is using a strategy that will ensure its products and services remain relevant and have good impact on job creation and development. TEP is not a grant making or aid agency but rather a development partner and therefore TEP’s strategy is aimed at empowering tourism businesses and entrepreneurs to commit and contribute to their own development.   

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MONTHLY REPORTING

 

TEP receives money from a variety of funders for its economic development work. These funders require specific target delivery, of which the most important is Job Creation.

 

In order for TEP to report on Job Creation it is imperative that all Level 2 and 3 (See Client Levels below) clients report their staff and turnover numbers on a monthly basis. In this way TEP then calculates Job Creation by taking a baseline reading of your average annual turnover and employment numbers at registration and counting the incremental growth based on your monthly reports. 

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TEP STRUCTURE

 

TEP is managed by a small but passionate team, based in Rosebank Johannesburg, who delivers innovative leadership in tourism development projects.

 

To implement its enterprise development services, TEP has representation in each of the nine provinces of South Africa. These offices are contracted to specialist service providers. The structure at provincial offices includes a Provincial Manager, Business Development Consultants (BDC), and Administrators who offer TEP’s business consulting services.

 

The main relationship you will develop with TEP is through the BDC assigned to you during the registration process. Should a staff member leave the programme a new BDC will be assigned to you. It is encouraged that clients take the initiative in the relationship with the BDC as he-she might be dealing with many clients at once.

 

On an ongoing basis, the role of the BDC is to:

·         Track your company performance via monthly reports;

·         Monitor progress on TEP interventions (services available to the client);

·         Identify business opportunities, as well as constraints and weaknesses that might hinder success;

·         Facilitate introductions to stakeholders;

·         Provide relevant industry information;

·         Make contact with you via phone three times per year and one face to face meeting per year.

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CLIENT LEVELS

 

TEP has the following levels of clients:

·         Level 1: Information Clients (receive only industry information from TEP, have access to TEP products and services at cost price)

·         Level 2: Intervention Clients (eligible for TEP products and services with a commitment fee) 

·         Level 3: High Potential Clients (eligible for TEP’s high level products and services with a commitment fee)

·         Level 4: Graduated Clients (access to TEP products and services at cost price)

 

Tools, specifically developed by TEP, determine the level of your company. These are:

·         Business Sophistication Measure (BSM)

·         Development Needs Analysis (DNA)

 

Your assigned BDC will conduct this analysis upon registration and allocate an appropriate level to your company.

 

The DNA is a high level intervention that looks at business strategy, human resources, financials, administration, marketing, legalities, product quality, and skills requirements. The analysis results in an intervention plan (indicating what support your company requires) and an assessment report that is shared with you. Because the DNA is a costly exercise, TEP only conducts a small number of DNA’s per year to fit in with available budgets.

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CRITERIA/REQUIREMENTS FOR REGISTERING WITH TEP

 

The primary criteria, although intangible, is for you to have sufficient commitment for your business, to have the potential to grow and create sustainable employment.

 

The tangible criteria/requirements are as follow:

·         An initial site visit and physically inspection of the premises must be conducted by TEP BDC;

·         Businesses must go through either the BSM or DNA assessment processes;

·         For the DNA the BDC must do in-depth interview with the owner and staff in order to accurately complete the assessment. The results of the DNA will be shared with you;

·         You must pay the annual TEP Administration Fee and provide proof of payment before the Provincial Manager can approve the registration and assistance can be provided. The fee is valid for a 12-month period from payment;

·         TEP database system will automatically generate an SMS or e-mail directly to you to confirm successful registration;

·         You will receive an electronic TEP Registration Certificate upon registration. The TEP Registration Certificate will be renewed annually when the TEP Administration Fee is paid;

·         A business may be of any age as long as it shows potential for growth with TEP’s support. This is based on the BDC assessment with input from the Provincial Managers;

·         Registration is subject to TEP’s national target requirements as set by our funders:

o    75% Historically Disadvantaged Enterprises (HDE as determined by the TEP rating table for HDE classification);

o    50% Black Ownership (more than 50% or more black owned as defined by the B-BBEE Codes of Good Practice);

o    40% Rural Enterprises (Rural as defined by the TEP table on rural definition);

o    50% Micro Enterprises (employ less than 5 staff with annual turnover of less than R200,000-00).

·         Businesses registering with TEP must sign an official Memorandum of Agreement (included in the Registration Form) through which they agree to contribute to their own growth and development, provide TEP with monthly reports that indicate changes and progress in turnover, increased employment and honour the required commitment fees;

·         All businesses must be small, medium and micro enterprises as defined by the South African National Small Business Amendment Bill (www.dti.gov.za/sme_development/docs/ammendment03.pdf ) - see definition below;

·         Businesses must be legal entities, the minimum requirement being that you adhere to statutory labour practices and are registered with SARS. If a business is not legal at registration, TEP can assist the business to become legal within a period of 12 months. Should the business fail to achieve compliance within the 12 month window, it shall be reclassified as a Level 1: Information Client and it shall not be eligible for any Level 2 or 3 assistance – see definition below;

·         Businesses must provide proof of relevant insurances and public liability covers;

·         Businesses must be direct tourism businesses, i.e. at least 50% of the revenue of the company comes from either domestic or international tourism – see definition below;

·         All business owners/shareholders must be in possession of a valid Green Bar Coded South African Identity Document and submit certified copies of all relevant company documents during registration. Businesses with owners/shareholders that do not have a Green Bar Coded SA ID document may only be registered if there is clear evidence of reasonable economic and development impact to local South African citizens. (i.e. job creation and transformation);

·         Businesses must provide verification of banking details at registration;

·         Only a business bank account will be accepted – not the personal account of the owner. The only exception is a sole proprietor, in which case the bank account will be in the business owner’s name. All businesses have up to 12 months to regularise the business;

·         You must ensure that you understand TEP’s requirements with regards to fees due, monthly reporting and assistance provided. Information on this is availbale under the Working with TEP section;

·         If you are a Level 2 or 3 client you are required to submit monthly progress reports within 30 days of the end of the reporting month. Assistance to clients with outstanding reports will cease until such time as such reports are brought up to date, but within a time period of 3 months. Failure to report continuously for more than 3 months will result in no futher assistance as TEP cannot report these numbers to its funders.

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DEFINITIONS

 

Small, Medium and Micro Enterprises

Using sections of the table from the National Small Business Amendment Act (No 26 of 2003), businesses must fit into one of the tourism categories and must not exceed the three criteria listed:

 

Sector	Size	Maximum Employees	Maximum Turnover	Maximum Gross Asset Value	Tourism Categories
Wholesale Trade, Commercial Agents & Allied Services	Micro	5	R 0.2m	R 0.1m	Travel Agents, Business Tourism
	Small	50	R 32m	R 5m
	Medium	200	R 64m	R 10m
Catering, Accommodation & Other Trade	Micro	5	R 0.2m	R 0.1m	Guesthouses, B&Bs, Tour Operators, Guides, Restaurants, etc.
	Small	50	R 6m	R 1m
	Medium	200	R 13m	R 3m
Community, Social & Personal Services	Micro	5	R 0.2m	R 0.1m	Craft Industry, Community Based Tourism Trusts / Associations
	Small	50	R 6m	R 3m
	Medium	200	R 13m	R 6m

 

Legal Compliance

For a business to be legal, it requires the following:

·         Registered with the Registrar of Companies and with updated ownership information;

·         Registration and payment of UIF, Skills Development Levy, PAYE and other SARS / legal requirements;

·         Registered for VAT if applicable;

·         A valid income tax number and tax clearance certificate;

·         Adherence to the relevant local legislation;

·         Relevant licences and adherence to applicable legislation for type of business (i.e. public transport licence for Tour Operator, Liquor Licence for any establishment selling liquor, etc)

 

The business must show adherence to the above by providing certified copies of all relevant certificates, including certified copies of Owner / Shareholder ID documents.

 

If the business is not legal in terms of this definition, TEP may assist the enterprise to become legal within 12 months of application. Initial assistance for the business must be linked to becoming legal, where possible, the business must attend TEP’s Legalities Toolkit training.

 

Types of Enterprises

TEP can assist the following types of enterprises:

·         Private Companies (Pty Ltd)

·         Personal Liability Companies (Inc)

·         Sole Proprietor/Partnerships (trading as....)

·         Co-operatives  

·         Trusts

·         Closed Corporations (CC)

·         Non-Profit Companies (NPC)

 

TEP cannot assist directly:

·         Associations

·         Destination Marketing Organisations (DMO)

(However, TEP would consider partnerships with the above to assist small tourism businesses)

 

The reason why TEP cannot assist associations and DMO’s is because it assists direct tourism businesses that can report on their turnover and jobs. If associations and DMO's we assisted TEP would not be able to track the impact of its assistance. This is specifically related to achieving turnover growth and jobs targets for which TEP receives funding from Government and Private Sector. Each individual member of the association can be registered with TEP and can apply for funding for the association fee or other activities. 

 

Direct Tourism Business

TEP only assists direct tourism businesses. This means that the business is directly involved in the tourism, arts or cultural industry, and has more than 50% of its turnover derived from tourism, cultural or arts related activities. It includes, but is not limited to, tour guides, restaurants, hotels, guest houses, B&Bs, cultural centres, theatre and the arts, tour operators, transport firms, attractions, recreational facilities and museums.

 

Historically Disadvantaged Enterprise (HDE) / Black Owned / B-BBEE Compliant

TEP registers small tourism businesses with various transformation ratings. HDE businesses are classified as businesses that meet the HDE point’s criteria in terms of TEP’s internal rating as an HDE enterprise. Black Owned Enterprises are enterprises that are more than 50% black owned in terms of the B-BBEE Codes of Good Practice on black ownership. B-BBEE Complaint Enterprises are those enterprises that are compliant in terms of the B-BBEE Codes of Good Practice.

 

Black Owned Enterprises

The first definition is for enterprise development purposes, and here TEP looks solely at ownership. A Black Owned Business is a business which is more than 50% owned by one or more black individuals as termed in the B-BBEE Codes of Good Practice or, in the case of a company, more then 50% of the shares are owned by one or more black individuals as termed in the B-BBEE Codes of Good Practice.

 

Historically Disadvantaged Enterprises (HDE)

The second definition is for targets and reporting purposes. HDE businesses are classified as businesses that meet the HDE point’s criteria in terms of TEP’s internal rating as an HDE enterprise.

 

TEP Qualification Criteria of an HDE:

Criteria	1 Point	2 Points	3 Points
HDI Ownership/Shareholding	10% - 19%	20% - 49%	> 50%
HDI MD/CEO	-	-	3 points
HDI Management	10% - 19%	20% - 49%	> 50%
HDI Employees	10% - 19%	20% - 49%	> 50%
HDI Procurement	20% - 29%	30% - 40%	> 40%

 

TEP requires that an enterprise earn a minimum of 7 points to qualify as an HDE. Seventy-five percent of the enterprises assisted by TEP must be HDEs. The above multi-faceted definition will allow more small, growing and dynamic enterprises to participate in TEP and will avoid obvious fronts trying to unfairly obtain TEP support.

 

 

 

B-BBEE Complaint Enterprises

Here companies are rated according to the Tourism B-BBEE Sector Code. Most of the TEP registered SMMEs will either fall under the Qualifying Small Enterprise (QSE) scorecard or the Exempted Micro Enterprise (EME) Scorecard. TEP will report Level 1 to Level 4 contributors as B-BBEE Complaint.

 

·         Exempted Micro Enterprises (EME)

EME’s are defined by the Tourism Codes as companies with an annual turnover of R2,5 million or less. EME’s enjoy a deemed B-BBEE recognition of a Level 4 contributor and those that are either over 50% owned by black people or over 50% owned by black women are promoted to a Level 3 contributor.

 

·         Qualifying Small Enterprise (QSE)

This scorecard is applicable to all enterprises operating in the tourism sector with a turnover between R 2,5 million and R35 million.   

 

B-BBEE Levels

B-BBEE Status	Qualification	B-BBEE Recognition
Level 1 Contributor	100 points	135%
Level 2 Contributor	85 to 100 points	125%
Level 3 Contributor	75 to 85 points	110%
Level 4 Contributor	65 to 75 points	100%
Level 5 Contributor	55 to 65 points	80%
Level 6 Contributor	45 to 55 points	60%
Level 7 Contributor	40 to 45 points	50%
Level 8 Contributor	30 to 40 points	10%
Non-Complaint	0 to 30 points	0%

 

Start-Up

An enterprise is deemed a start-up business if it commenced businesses activities 24 months or less before the date of registration.

 

Urban and Rural

Below is a list of all towns in South Africa that are classified as urban by TEP. It is imperative that upon registration you supply your full physical address with street, suburb, town and local or district municipality.

 

Province	Urban Towns (as defined by population in 2001)	Province	Urban Towns (as defined by population in 2001)
Eastern Cape	Adelaide	Free State	Bethlehem
Eastern Cape	Aliwal North	Free State	Bloemfontein
Eastern Cape	Burgersdorp	Free State	Bothaville
Eastern Cape	Butterworth	Free State	Frankfort
Eastern Cape	Cradock	Free State	Harrismith
Eastern Cape	East London	Free State	Hoopstad
Eastern Cape	Elliot	Free State	Koffiefontein
Eastern Cape	Fort Beaufort (/Alice)	Free State	Kroonstad
Eastern Cape	Graaff-Reinet	Free State	Ladybrand
Eastern Cape	Grahamstown	Free State	Parys
Eastern Cape	Humansdorp	Free State	Reitz
Eastern Cape	Kirkwood	Free State	Sasolburg
Eastern Cape	Mount Fletcher	Free State	Senekal
Eastern Cape	Port Alfred	Free State	Theunissen
Eastern Cape	Port Elizabeth	Free State	Trompsburg
Eastern Cape	Queenstown	Free State	Vrede
Eastern Cape	Somerset East	Free State	Welkom
Eastern Cape	Stutterheim	Free State	Zastron
Eastern Cape	Umtata	KwaZulu-Natal	Dundee
Gauteng	Bronkhorstspruit	KwaZulu-Natal	Durban
Gauteng	Cullinan	KwaZulu-Natal	Estcourt
Gauteng	East Rand (Germiston/Boksburg/Benoni/Brakpan)	KwaZulu-Natal	Howick
Gauteng	Heidelberg	KwaZulu-Natal	Kokstad
Gauteng	Johannesburg (/Soweto)	KwaZulu-Natal	Ladysmith
Gauteng	Krugersdorp	KwaZulu-Natal	Mandeni
Gauteng	Meyerton	KwaZulu-Natal	Newcastle
Gauteng	Pretoria	KwaZulu-Natal	Pietermaritzburg
Gauteng	Randfontein	KwaZulu-Natal	Port Shepstone
Gauteng	Vereeniging (/Vanderbijlpark)	KwaZulu-Natal	Richards Bay
Gauteng	Westonaria	KwaZulu-Natal	Scottburgh (/Park Rynie/Umzinto)
Limpopo	Nylstroom	KwaZulu-Natal	Stanger
Limpopo	Pietersburg (/Polokwane)	KwaZulu-Natal	Ulundi
Limpopo	Thabazimbi	KwaZulu-Natal	Vryheid
Limpopo	Bela Bela (Warmbad)	North West	Brits
Limpopo	Tzaneen	North West	Carletonville
Limpopo	Lephalale	North West	Christiana
Mpumalanga	Balfour	North West	Delareyville
Mpumalanga	Barberton	North West	Klerksdorp
Mpumalanga	Belfast	North West	Lichtenburg
Mpumalanga	Bethal	North West	Mafikeng (/Mmabatho)
Mpumalanga	Carolina (/Elukwatini)	North West	Potchefstroom
Mpumalanga	Delmas	North West	Rustenburg
Mpumalanga	Ermelo	North West	Schweizer-Reneke
Mpumalanga	KwaMhlanga	North West	Vryburg
Mpumalanga	Mdutjana (Siyabuswa)	North West	Wolmaransstad
Mpumalanga	Middelburg	Western Cape	Beaufort West
Mpumalanga	Nelspruit	Western Cape	Bredasdorp
Mpumalanga	Piet Retief	Western Cape	Caledon
Mpumalanga	Sabie (/Lydenburg)	Western Cape	Cape Town
Mpumalanga	Standerton	Western Cape	Ceres
Mpumalanga	Volksrust	Western Cape	George
Mpumalanga	Witbank	Western Cape	Heidelberg/Riversdale
Northern Cape	Barkley West	Western Cape	Hermanus
Northern Cape	Colesberg	Western Cape	Knysna
Northern Cape	De Aar	Western Cape	Malmesbury
Northern Cape	Griekwastad	Western Cape	Mossel Bay
Northern Cape	Hartswater	Western Cape	Oudtshoorn
Northern Cape	Kathu	Western Cape	Paarl
Northern Cape	Keimoes	Western Cape	Plettenberg Bay
Northern Cape	Kimberley	Western Cape	Robertson
Northern Cape	Postmasburg	Western Cape	Saldanha
Northern Cape	Springbok	Western Cape	Stellenbosch
Northern Cape	Upington	Western Cape	Velddrif
		Western Cape	Vredendal
		Western Cape	Worcester

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WORKFLOW

 

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STARTING THE PROCESS

 

To start your registration process with TEP, please contact your local TEP office and request the TEP Registration Form. Contact details for all TEP offices are available under the Contact Us section of the TEP website (www.tep.co.za).

 

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