There’s a lot of things you might miss when starting a business, this is a checklist of everything you need when starting a business in South Africa.
The first thing you need is capital, capital is not only limited to money, it can include other resources like equipment and machinery. Businesses are different, some need hundreds of millions to start while others require only your skill and a tiny portion of capital.
However, starting a business with no capital at all is near impossible, everything you need to run your business is basically tied to capital. Make sure you have adequate capital before starting out.
2. Operating space
You need an operating space or premises, again; different businesses will need different types of premises. It doesn’t really matter if you run an online business, you still need a space whereby you will sit and do your work from your laptop/computer, be it your bedroom or an office.
Some businesses work on the client’s premises, like grass cutting services, this won’t require a lot of space from your side. Nevertheless, you still need space to store all your tools, a vehicle can also count as an operating space if most of your work is conducted from it.
For online businesses, you need both a physical and virtual space, to get virtual space you will have to pay for servers, hosting, cloud services or other subscription services that provide you with a virtual environment to run your business.
You need people who will actively work on running your business, be it you or employees. A business can’t function without labour, make sure that you calculate all your labour needs because this can easily be one of your biggest expenses.
How many people will be needed to run your business? Will it only be you or will you need a cashier, a security guard, an assistant, someone who will clean, an accountant, an IT person and so forth. You should also anticipate the amount of money you will spend in salaries.
4. Licenses and registrations
This is a bit of a grey area, not all businesses should be registered. These are typically small businesses that are headed by sole proprietors. South Africa has a very huge informal sector, with millions of unregistered businesses, there’s nothing wrong or illegal about this in most cases.
A person who is selling sweets or magwinya in an informal setting doesn’t have to register his/her business. However, if you want to set up a professional company then you should definitely register with the CIPC, the process usually takes 2 weeks and it’s something you can do by yourself without any assistance, it currently costs R125.
Some businesses; like restaurants and taverns need special licenses in order to operate, be it a food permit or liquor license. Please make sure that you have all the relevant licenses pertaining to your business.
Nice to haves
The above are the most important things on this checklist, the things listed below are nice to haves, things that are not that crucial.
5. Business bank account
A business bank account will make your business to appear that much more professional and trustworthy. However, this is a privilege that you have to pay for every month, which can easily add up to your expenses.
I don’t recommend opening a business bank account unless you really need to, especially when you are the only one running your business. I am not going to say that not opening a business account early on can save you an unnecessary tax burden, I am not going to say it. Rather speak to a tax account about that.
Also, TymeBank offers business banking accounts with no monthly fees, but these are only for sole proprietors. You can open the account directly from the TymeBank app.
6. A website
Businesses usually open websites so that they can appear on Google and get some credibility. A website is not really crucial to the success of your business unless you are using it as a lead conversion tool or using it to market your business in general, which is what you should probably be doing.
If you are running an online business then a website is not a nice to have, it falls somewhere between capital and operating space. A website will also give you a nice, professional email address, to avoid using Gmail.
7. Social media presence
All these nice to haves are basically to make you appear more professional, you should probably open some social media accounts. However, don’t expect to make any sales from social media, rather open the accounts as a way to easily interact with customers.
One of the best social media accounts to open is Pinterest, for businesses selling physically goods like clothes, furniture and antiques. Pinterest is one social platform that can actually bring you customers that rival any paid marketing platform.
8. Business plans
Unless you are going to use the business plan to pitch your idea to some government officials who demand it then I highly don’t recommend it. The business landscape is very unpredictable and there’s no telling what will happen even 6 months from now.
The last thing you want is an expensive piece of paper that proclaims to know where your business will be in five years. I don’t think there is any business plan that could have predicted the events of 2020 and mid 2021 in South Africa.
However, there are some people who need to feel secure and a business plan gives them just that. If you are one of those people then you should probably get one, or just draft it yourself.
This was a checklist of everything you need to start your business in South Africa. Most of the things that are not mentioned here probably fall under capital or only belong to specific businesses. Do you have any thoughts or questions? Comment below.