The Enterprise Incubation Program is market driven and prepares early stage entities to supply to local markets.
This programme is centered on the securement of a market/s, by the applicant (incubator), to transfer skills to small businesses and cooperatives (incubatees), with an effort of attaining the expectant quality standards and specifications of firms. The operational model for the incubator programme will be inclined towards physical incubation- provision of incubation services from a physical site as opposed to virtual or remote support provision.
The Enterprise Incubation Program (EIP)
The Enterprise Incubation Program is a 3 year programme designed to strengthen technology commercialisation and harness the entrepreneurship of the technology community in South Africa.
EIP is targeted at South African registered and tax compliant entities with vast experience in the development and mentoring of early stage enterprises and co-operatives with potential to supply goods and services to firms in the local economy on a sustainable basis. New and Existing incubators (not previously funded by the Dept. Trade and Industry’s Incubator Support Programme and Seda Transfer Programme.
The EIP programme funding is between five – ten million rand (R 5 – 10 million).
Feasibility studies will be capped at one and a half million rand (R 1,5 million).
The EIP programme will be a hundred percent (100%) subsidy in the pilot year to recognise expected variation in expected performance improvements to the programme and lower the risk of failure. Thereafter cost sharing at a ratio of 90:10 between Department of Small Business Development (DSBD) and eligible applicants will be introduced for the programme rollout. The applicant’s contribution towards the ten percent (10%) will be accepted either in monetary value and/or assets linked to the incubator and its activities.
Objectives of the Enterprise Incubation Program
- In continuing to strengthen economic development through broadening participation in the economy, the EIP aims to ensure that small, micro and medium enterprises (SMMEs) graduate into the mainstream economy through the support provided by the incubators.
- The objective of the ISP is to encourage private sector partnerships with Government to support incubators in order to develop SMMEs and nurture them into sustainable enterprises that can provide employment and contribute to economic growth.
- The intention of the programme is to provide funding for incubators that over time can generate revenue through the provision of services and initiatives that can be self-sustainable.
- The incubation support will be available on a cost-sharing basis between the Government and private sector partner(s). It is available for infrastructure and business development services necessary to mentor and grow enterprises to ensure that within 2 to 3 years the enterprises will graduate to a level of self-sustainability by providing products and services to the market.
Qualifying Criteria for the Enterprise Incubation Program
- Anybody with a viable business idea or any registered small micro and medium enterprise (SMME) that is struggling to grow. Each of the 54 Seda supported incubators has its own incubatee recruitment/selection process that is unique to their sector.
- The applicant must either be:
- A registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended) or the Companies Act, 2008 (as amended); the Close Corporations Act, 1984 (as amended) or the Co-operatives Act, 2005 (as amended); or
- Be a registered higher or further education institution; or
- Be a licensed and/or registered science council.
- The programme is available to applicants that want to establish new incubators or wish to grow and expand existing ones.
- The supported incubator may either offer physical and/or virtual incubation support services.
- The incubator to be supported may be a corporate incubator; a private investor’s incubator; an academic or research institution incubator in partnership with industry, and must be focused on establishing and/or growing enterprises that will graduate to sustainable enterprises.
- The following costs are eligible for support:
- Business development services (e.g. business advisory services, coaching and mentoring, training, facilitation of funding, production efficiency and improvement, quality and standards acquisition);
- Market access;
- Machinery, equipment and tools;
- Infrastructure linked to incubator (buildings, furniture);
- Feasibility studies for establishing and expanding incubators;
- Product or service development;
- Information and Communication Technology (ICT); and
- Operational costs.
The Adjudication Panel may consider for support, any other costs related to the activities of the incubator.
Benefits of the Enterprise Incubation Program
- Through Incubation, enterprises develop skills, knowledge and markets. These improvements are intended to lead to increased profitability and growth.
- Enterprises will be able to employ more people and enter new markets with cutting-edge products and services.
- The grant approval will be based on projections for the first year at application stage whereas the approval for subsequent year(s) will be dependent on the review of actual performance of the preceding year against agreed milestones.
- All payments will be made directly to the incubator’s primary account.
- The grant approval is capped at a maximum of R10 million (VAT inclusive) per financial year over a three (3) year period and is subject to the availability of funds.
- The EIP offers a cost-sharing support of 50:50 for large businesses and a cost-sharing of 40:60 for SMMEs.
At DTC, our work encompasses mutual trust with each client; international companies as well as small- and medium-sized enterprises. Each client’s activities, products and professional environment are carefully taken into consideration; our goal is to provide tailor-made solutions to the client’s specific business and other corporate needs.
Contact us for further information and assistance regarding the Enterprise Incubation Program.