Elliot Mokone’s turnover increased by 15% while he operates from a rent-free office.
Mokone is the owner of Morena Corporate Services, a company that provides South African Airways (SAA) in Cape Town, Durban, East London and Johannesburg with cleaning services such as window and carpet cleaning.
These are two of the benefits he has seen since becoming a supplier to the national carrier five years ago.
Other benefits include the furnished office space and free computers, email and access to its network server.
SAA assists many of its suppliers by offering them rent-free office space and by paying them for their services within seven days.
“I used to pay up to R7 000 a month for the premises I rented before I became a supplier to SAA. I am now able to put that money back into the business,” says Mokone.
He says the seven-day payment terms SAA has put in place for its suppliers has also significantly boosted his cash flow.
“I can now pay the people who supply my products and chemicals on time, which was not always the case in the past. My employees also do not have to wait for their money,” says Mokone.
Another benefit that comes with being an SAA supplier is the credibility that is afforded your company being associated with a well-known brand.
Says Mokone: “When I apply for business with other companies, they take notice as a result of my association with SAA.
They can see that I am not a fly-by-night operation.”
He has since secured a contract with Anglo American; he says this was a result of him being a supplier to SAA.
Mokone says SAA has provided him and his staff with hospitality training free of charge.
He is not the only supplier to SAA to see increased profit margins.
Elton Stride, the owner of Usizo Technical Services, supplies SAA with air-conditioning and refrigeration services.
He also benefits from the airline’s free office space and seven-day payment policies.
He says getting paid within seven days has made it possible for him to pay salaries on time and to pay suppliers who have to be paid every week or fortnight instead of every 30 days.
SAA has provided the company with two rent-free, fully furnished offices. He says the money the company saves on rent is ploughed back into the business.
Stride says that, since becoming a supplier to SAA, the company’s turnover has increased by a massive R10 million.
The profits have enabled it to employ more staff and to run internal staff training programmes.
Stride says it takes a lot of hard work and dedication to work for SAA, but “the payment terms are good and would benefit a small business”.
But everything has not always been plain sailing.
“SAA equipment is very old and spares are always a problem. We have recommended upgrades to some equipment.
Qualified staff was also a challenge, but we have implemented staff training and have also employed more staff with the skills needed at SAA,” says Stride.
Usizo Technical Services, based in Johannesburg, also offers engineering facility management services such as the installation and maintenance of generators, boiler operation and maintenance, and transformer maintenance.
The company also supplies services to well-known corporate companies such as Airports Company South Africa, Eskom, the Passenger Rail Agency of South Africa and MTN.