whythawk ratings: measuring effective development

Rating Report for Demonstration Enterprise Development Consultant A

Link to overview of ratings and scorecard definitions

Profile

Contact Details

Contact Name: Some Name
Contact Number: Some Number

Service Offering

Entrepreneurial Training, Health Checks, Feasibility Studies, Due Diligence, Business Plans, Accounting

Geographic Coverage

Based in Wynberg, covers Western Cape

Accreditation / Membership

Umsobomvu Youth Fund, City of Cape Town Voucher Program, Service SETA, Casedra Mentorship Program, SEDA

Organisation Capacity

Downgrading capacity but still operating

Volunteers

Not using volunteers, not interested in using any

Funding Requirements

Not looking for funding at this time

Organisation Summary

Demonstration began operations in 2002 to take advantage of the recently commenced Umsobomvu scheme.  They employed a large number of consultants and expanded rapidly, taking on significant amounts of work.

The expansion allowed them to take on additional work for other programs as they arose.  Questions started being asked about the quality of the work performed - much of it seemed very repetitive, as if it had simply been produced from templates.  Interviews within the industry gives the impression of a backlash against the scale of Demonstration' operations and their work flow was reduced.

They are now a fraction of the size (down to six staff, including two directors) and five contractors who perform consulting, training and bookkeeping services on their behalf.

Positive Rating Factors:

• Their scale has allowed them to offer a determined measure of support and follow up to clients
• Performs introductory orientation program for all new clients - a welcome approach
  

Negative Rating Factors:

• Too many business plans appear to have been duplicated with minor modifications
  
• Unclear objectives and motivations

Aspects

Inception, Participation & Infrastructure

Demonstration started in 2002 to take advantage of the new Umsobomvu voucher program. Even now, having reduced scale substantially, they are still one of the largest service providers in the sector.

Their infrastructure is currently vast after the loss of large numbers of consultants and so more than adequate for the services they provide.  They are intending to scale down. 

Funding Requirements

Despite being dependent on vouchers, they have diversified significantly since their original approach and now offer services throughout the complete array of small business development programs.

Development Community Character

Aimed, as they are, entirely at the enterprise development sector.  They are highly reliant on contractors, particularly as they scale down operations, and it is unclear as to how much oversight will continue to be exercised.  To date, though, oversight appears to have been consistent.

Rating Factors

Ownership, Governance, and Management

Demonstration is a Pty (Ltd) and are subject to an annual audit. Their audit report is listed as "unqualified".

Many of their most experienced staff have left however their external consultants have considerable experience in consulting and with Demonstration. 

Operational Effectiveness

Clients polled indicate a general level of satisfaction, and a significant number (95%) are still operating in business after six months.  Many of them had businesses prior to Demonstration' intervention (some 80%).  The average loan requirement of R 225 000 was needed by 43.75% of their clients, of which 22% secured finance.  This is a reasonably good success rate and indicative of appropriate financial analysis related to the needs of the client.  Businesses are small, though, with an average of 2.25 employees.

Demonstration did not supply us with a client list and the list we have was taken from the list of Umsobomvu beneficiaries.  Originally Demonstration told us that only 50% of their revenue came from vouchers.  Information from other sources indicates otherwise and we have reweighted their financial analysis accordingly. 

Capacity & Strategic Planning

Demonstration is currently scaling down their operations. With their strategic planning still unclear and their capacity gradually scaling down we recommend caution in utilising the services of this organisation. 

Ongoing Disclosure

This is an initial rating and ongoing disclosure will be commented on in future reviews.

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