In this “5 Step By Step Guide : How to Start a Business in South Africa” we chat about documents needed to start a business in South Africa. All it takes is a single good idea to kickstart your journey entrepreneurship and set you down a new path. Starting your own business has many rewards, highlights and aspirations, but before you get ahead of yourself (and let your mind wonder to the moment you’re selling your business for millions), there is some real work to be done. And it starts with building the right foundation of which to starting your business, and in doing so, ensuring that you have a model for success.
When starting a business, it helps to follow a list of steps, to ensure that you are heading in the right direction and ticking all of the right boxes. One missed step could be detrimental to the success of your new venture and result in plenty of frustration and disappointment. We want you to avoid that at all costs!
With getlion, the new and free business app made for the South African entrepreneur, you won’t miss your footing. By downloading and using the getlion app, you’ll have a guide at your side to increase your chance of success.
With getlion, you can access many helpful resources to solidify and validate your ideas, assist you in the creation of the ultimate business plan, organise your prices and your budgeting, and understand the legal, financial and tax know-how required to succeed. We have all of the information, partners and tools you could possibly need to get your business off the ground.
Step 1 will get you thinking – and is the foundation of your business. Many entrepreneurs in South Africa make the mistake of thinking that all they need is passion to get started but it is the planning and hard work thereafter that is the difference between success and failure. Successful entrepreneurs have many common characteristics and traits, but none more important than the ability to solve a problem. Solving a common problem is the foundation for a great business, and if common enough, it’s likely that people will be willing to pay for your solution.
Whilst some entrepreneurs stumble on their ideas by chance, others have to work long and hard for their breakthrough. There are many ways to come up with a great idea. 1) Ideas based on your personal knowledge and experience – what frustrates you or effects someone you know. 2) Generate an idea from existing models – what has worked in another country or a different context that could be applied to your market? 3) Combining multiple existing solutions in the marketplace. Idea generation is a tough exercise, but it’s very doable.
Once you’ve come up with a solid idea, you need to validate (or test its viability). This means you need to ask for honest feedback from as many people as you know and measure their responses. There are many ways to do this, like surveys, focus groups, interviews or online forums – but most importantly – this feedback has to be unbiased (so your mom, best friend or close business associate are not adequate). Try and get feedback from your future potential users. If they say the idea is a good one, and provide insight as to the likely use of your solution, then you’re on to something!
When using the getlion app, you will be able access a variety of resources to assist you in generating ideas and validating them with customers. That’s a huge confidence boost as move forward.
Step 2 is about putting your idea into action – it’s not about thinking anymore – it’s time for planning the way forward. Writing a business plan can be intimidating, time consuming and more complicated than it necessarily needs to be, when you don’t have the right information and resources.
A good business strategy in South Africa incorporates a list of features: such as your mission/vision, the amount of capital you will require, the skills you will need to tap into, the products or services you will be providing, understanding your competition, understanding your route to market, building a customer profile and importantly – identifying your USP (what makes your business unique?). As you set up your plan, make sure that you have fully researched your market as well as your industry, and as such, you know who you are targeting. Your business plan will be somewhat pointless if you don’t do this research as you will end up focusing on the wrong customers!
The getlion app, thanks to our various partners, will provide you the resources to assist you in building a useful plan for your business. Not only will you have access to a guide but also professional guidance, as features continue to be added to the app.
Step 3 is all about pricing your ideas. A big hurdle for many new large and small businesses in South Africa is figuring out how to set the price for products and/or services. Factoring in things like time, effort, the raw materials – makes pricing a science. And with cashflow being one of the primary killers of SMMEs in South Africa, a mistake with your pricing could end up cutting your profit by more than you can handle. Understand your Cost of Sales (a term describing what it costs your company to deliver a product/service) and what margin to apply to your products. Then, understand your value, competitive positioning, and sales forecasts. At times, you may even need to charge less (or more) to position your brand positively in the mind of your customers.
Getting things right the first time around is vital for your business success. getlion has resources to help you determine your pricing and stay on track with your calculations.
No business person can predict the future, but everyone can plan for it by using the data they have available to them.
From determining your capital input to figuring out your day-to-day expenditure and possible income, step 4 is all about the importance of budgeting and forecasting and how to master these processes.
When starting out, we recommend creating a spreadsheet of your start-up costs: estimates of running expenses, marketing costs, staff, and anything that you can put a number to. Don’t exaggerate your numbers – but don’t undervalue them either. Most businesses need to apply for business finance in South Africa, and so the accuracy of their budgets is very important.
When you have the total start-up costs, you can start looking for business finance in South Africa (e.g SMME Funding). This funding can come from banking institutions, partners, loans or private capital straight out of your savings account.
Our app was built to connect you with potential funders, and to help you gain your footing with budget planning and forecasting. getlion features various tools for you to use while we also source learning materials to help you gain a better understanding of what it is that you need to do.