Findings from the 2019/2020 GEM Report say that 60.4% of South Africans saw good entrepreneurial opportunities in South Africa. As a result, that means new businesses are being registered every day.
There are many rewards to starting your own business; however, you also need to take some essential steps. Starting a business in South Africa can seem a daunting task with everything that needs to be done, and how do you know where to start?
Thankfully, we’ve compiled a small business guide on how to start a business in South Africa. So keep reading as we discuss registering a business in South Africa.
Step One: Generating Ideas
Every good business starts out as an idea in the beginning. Slowly it’s nurtured into something larger and hopefully more successful. So, the first step in opening a business is to generate ideas. Seems easy, right? Not always.
Ask yourself things like what has worked in other global markets, and can you implement it in the local market? Do you have a passion or a hobby you want to turn into a career? Then, take some time and do some deep thinking to develop your business venture.
Step Two: Market Research
Once you’ve got your idea, it’s time to move on to market research. Gathering information about your proposed business idea can be invaluable to becoming successful.
There are several ways to achieve this: surveys, social media polls, focus groups, etc. The key here is to get feedback from impartial people. Those people are potentially your customer base, so their opinion matters!
Step Three: Compile a Small Business Guide
No successful business gets very far without a solid business plan. This acts as a guide for the trajectory of our company. Your business plan should include information on:
- Your company mission
- How much capital you will need
- What skills you might need
- Identifying your product or service
- Researching the competition
- Identifying your target market and building a Buyer Persona
- Identify your unique selling proposition (USP)
It’s also a good idea to brush up on the latest South African business laws, just for good measure.
Step Four: Budgeting and Forecasting
Knowing what your budget is is critical to the success of any business. Take time to figure out your daily expenditure and estimate potential income. Making spreadsheets can assist you with this, and there are also templates online that you can search for to get you started.
After you determine the total starting costs for your company, you can start looking for business financing (e.g., SMME Funding) in South Africa.
Step Five: Registering Your Business
Once you’ve got all the above figured out, it’s time to seal the deal and commit. This means registering your small business for a nominal fee. This helps instill confidence in your customers as they know you aren’t a fly-by-night scammer.
Decide what type of company registration you need. In South Africa, we have the following options to select from:
- Sole Proprietorship
- Private, Public or Personal Liability Company
- Partnership
- Business Trust
- ‘External Company’ – used in the case of registering a foreign company branch office in South Africa
Once you’ve decided that, you can proceed to register your business. This process will include the following:
- Registering a company name, or a holding name
- Receiving a tax number
- Registering for VAT (although this is not required until you pass R1m p.a.)
You will also need certified copies of photo ID for all company directors, as well as a signed copy of your application. And finally, you will also require a corporate bank account.
Make Your Dream a Reality
Registering a business can seem like a daunting task, but it’s only something that needs to be done once. Taking time to figure out every aspect of your business will help your chances of fully achieving your dream. Hopefully, this small business guide has steered you in the right direction.
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