Starting a business can be challenging for many, but if you are passionate, motivated, a risk taker, hard worker, or believe in yourself you are likely to succeed in the business world.
What is an entrepreneur?
An entrepreneur is someone who:
Starting a business can be challenging for many, but if you are passionate, motivated, a risk taker, hard worker, or believe in yourself you are likely to succeed in the business world. Before you start a business you should decide what type of business you want to establish. There are usually 5 types of businesses, namely:
To start a business you need to follow these steps:
Choose a name that is easy to pronounce, is memorable and is easily recognisable. Register the name and the business with the Companies and Intellectual Property Commission (CIPC).
The new Companies Act stipulates the way owners can register their businesses. You need to decide how your company should be structured, i.e. will it be a non-profit company, profit company, personal liability company, state-owned company, public company or private company?
The business bank account can be opened after 22 days of your company registration with CIPC. The banks will expect you to produce the following document or more depending on the type of company you are starting.
This should include an outline of how you want to start the business, how you are going to make money, who you wish to target as clients and why this idea will work. There are companies that assist people on how to develop a business plan. For more information on this contact National Youth Development Agency (NYDA) at 0800 52 52 52 or visit: http://www.nyda.gov.za/Pages/default.aspx
Build relationships with experts in various fields, such as insurance, legal, accounting. These professionals will be able to guide you in various aspects of your business.
There are a plethora of legal requirements when setting up and running a business. A lawyer will ensure you adhere to these and will be able to guide you in other matters as your business goes forward.
As mentioned above, you need to meet all the legal requirements for operating a business in South Africa. These include BBBEE, The Companies Act and the Consumer Protection Act, to name but a few.
Your relationship with an attorney will be useful here. You need to obtain the relevant registrations, permits and licenses for your business, such as registering intellectual property, registering with SARS, applying for a business license, etc. You will need to register with SARS in order to file your company’s tax returns and also to apply for a Tax Clearance certificate. For more information on SARS visit: http://www.sars.gov.za/About/Pages/default.aspx
Setting a price on your product or service can make or break your business. The amount must be affordable for your customers while producing a profit for your business.
Finding the right financing for your business can prove challenging. There are various options, including bootstrapping, bank finance, friends, family, investors and government funding.
Choosing a site from which to run your business is of primary concern. You also need to decide whether to purchase or rent equipment for your company. Establishing relationships with suppliers to your business will ensure a good support infrastructure.
Familiarise yourself with the specific risks faced by your area of business and insure your business against that risk.
You need a proper record of your business’ financial transactions. Not only will this help you keep track of how your business it doing, it will prove essential should you need to apply for funding.
You need to decide whether you will manage your company’s finances yourself or will you outsource the task. This includes matters such as accounting and financial reporting, budgeting, collecting accounts receivable, risk management, and insurance matters.
Marketing drives sales and, ultimately, makes profits. Customers need to know about your business and its offerings before they can decide whether to spend their hard-earned cash with you.
Decide what positions need filling and research the best places to advertise to find those people. Have a clear idea of what that person’s role will be within your company. Familiarise yourself with the legal requirements of being an employer such as registering with SARS, PAYE, UIF, etc.
This is how you are going to run your business on a daily basis. It includes things like how are you going to manage orders, timekeeping and service levels.
DO I NEED A UNIVERSITY DEGREE TO START A BUSINESS?