The objectives of Enterprise Development are:

*Potential to create ‘Environmental Entrepreneurs ‘ who would be generating a sustainable business for themselves, and their families.
*The Eco Wash system is ‘waterless’ and products used are completely biodegradable and safe for the environment.
*Raising awareness of water saving when washing one’s car is a step towards getting people to think and act more responsibly to preserve the little water we have left on earth.
*Redress racial inequalities of the past.
*Give access to state-of-the-art equipment and the means to produce, for their own benefit, to those previously excluded from the mainstream economy.
*Conform to regulatory frameworks such as Employment Equity Act (EEA) and Broad-Based Black Economic Empowerment Act (BBBEE).
*Meet BEE Scorecard targets.
*Meet target for enterprise development spend.

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Scenario if, for example, A COMPANY rents the equipment as part of Enterprise Development Spend and the washers then charge a lesser rate:

A COMPANY appoints an Environmental Entrepreneur (EE) for the car wash enterprise.
A COMPANY to enter into the agreement with Eco Wash and pay the monthly rental for the car wash equipment.
(A COMPANY allows the EE to use the Eco Wash equipment and car wash products at no cost).
(A COMPANY allows the entrepreneur to operate on A COMPANY’s premises ‘rent free’ (this includes limited water and electricity).
(Provide the entrepreneur with mentor assistance from A COMPANY, if necessary).
(Encourage staff to pay for their car wash at the time it is carried out, or at least by month end. Wash services to be paid for by A COMPANY are paid on preferential terms, e.g. within three days of the invoice.)
Dealership B-BBEE scorecard implications

Costs relating to points 3 to 6 above can count towards A COMPANY B-BBEE scorecard under Enterprise Development.

Given the ‘car wash’ entity will be classified as EME (Exempt Micro Enterprise) they are deemed to have a Level Four Contributor Status having a B-BBEE procurement recognition of 100%.

Because the enterprise is a 51% black-owned EME, the contributor status is upgraded to a Level Three Contributor at 110%. In other words, all car wash services procured from them by A COMPANY will count at 110%.

Furthermore, if a measured entity (i.e. A COMPANY) procures goods and services from a supplier that is a recipient of enterprise development contributions from the measured entity (i.e. points 3-6 above), the recognisable B-BBEE procurement that can be attributed to a supplier is multiplied by a factor of 1.2.

B-BBEE Scorecard Example

Procured car was services per month R100,000
For scorecard purposes, the procurement will be recognised at 110% or R110,000 (if Enterprise is 51% black-owned).
As A COMPANY is procuring car wash services from its own Enterprise Development initiative, then a further factor of 1.2 can be used to calculate the amount to be recognised as preferential for the scorecard (i.e. R132,000 or R110,000 x 1.2 factor).