As a South African entrepreneur you’ve come up with a business idea and believe that you have found a gap in the market, the next question is how to start your own business? There are a number of processes that you need to go through to start your own business in South Africa, however if you do your research and practice due diligence then it can actually be quite simple to start your own business.
If you ask any successful South African entrepreneur how to start your own business, then the answer is most likely to be that the first thing you should do is to write a comprehensive business plan. A business plan will help map out your business strategy, give you an indication of the profitability of that business and offer you and those who might invest in your business an indication of how successful that business is likely to be.
You should have also researched your marketplace thoroughly, by looking at your competitors strategies and in turn working out whether you have a chance to gain a competitive advantage over them, because if you cannot then the chance that you will be successful may be less.
It is also advisable to talk to other small business owners on how to start a company, as these people may be able to give you advice and support, and in business having strong contacts with others can prove very helpful.
In South Africa there are also a number of administrative task an entrepreneur has to carry out to start a business:
- Firstly you need to reserve a company name with the Registrar of Companies and pay the associated fees.
- Then the next stages is the lodging of the formation documents with CIPRO, (Companies and intellectual property registration office) which can take 5-7 days and has associated fees that an entrepreneur will have to pay.
- Register with the office of the local receiver of revenue (SARS) for income tax, VAT and employee withholding tax
- Register with the department of Labor for Unemployment Insurance • Register with the Commissioner according to the Compensation of Occupational Injuries and Diseases Act
Once you have a comprehensive business plan and have sorted out all the administration that is required, then the next task is to establish the finances that will be used to fund the project.
There are many ways to finance a business – you could use your own finance, borrow money from friends and family, borrow money from the bank or get private investment on board. Which ever finance option you choose it is important that you research the positives and negatives thoroughly before you commit.