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.
TEP offers a wide-range of services and solutions. These include:
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.
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.
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.
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.
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.
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.
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:
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....)
· Closed Corporations (CC)
· Non-Profit Companies (NPC)
TEP cannot assist directly:
· 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:
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.
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.
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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