Too complicated

Do you feel that starting and running your own business in South Africa is simply too complicated?

Do you have an idea for a small business and the desire to get it going but you simply don’t know where to start? Does all the talk about types of companies, responsibilities, various taxes, registrations and rules scare you into a stand still? Just think about all the following acronyms and jargon:

VAT, PAYE, SDL, UIF, SARS, CIPC, COID, EMP201, CC, PTY, Sole prop, audit, tax invoice, account recon, purchase order, goods received note, COD, 30 day account, director, CEO, MD, FD …..

Yes, running a business can get complicated, particularly if it gets bigger. In fairness, bigger corporate companies do require a level of complexity, so its not all nonsense. However most startups are done by regular folk like you and that makes all the above a very daunting prospect. Each of the above words is not difficult or complicated on its own, but as a large group, they become over whelming to most new entrepreneurs.

Fear of failure and the inability to know what you next step must be are in our opinion the two major reasons why so many business ideas just simply never begin their journey to become real world businesses. The South African Government has made several steps to try and reduce the bureaucracy and red tape for entrepreneur start ups over the last two decades, but there is still this huge leap of faith required to actually get something going.

To help you get past this hurdle and begin setting up your business there are several options available to you:

  1. Jump in and learn as you go.
  2. Research the information yourself on the internet.
  3. Take a small business or entrepreneurs course from a reputable college or school.
  4. Partner with a small business support incubator.

1. Learn as you go.

The most common solution due to it being essentially free, is to simply begin and learn as you go along. For some people this is easy, others will just not know where to start. They do not know what their very first step is? So what generally happens is that they do nothing, and despite having an idea for a business, they find themselves with no progress many years down the line.

It is difficult to provide advice on how to progress using this method of starting a business because of the huge variety of businesses that can exist. However if we were to look at a simple trading business where you buy stock from a supplier and then resell it to customers, then you could look at the following as being your first steps. There are many others but we just want to give you somewhere to start.

First up, do a business plan. Nothing fancy or formal, but write down how your business will run and what it does. Just spending a few hours over a few days will get you thinking of all some more things that should be done next.

Next up, approach a few customers and get a feel for whether they would buy from you, and at what price. Do they have any other requirements, such as you keeping stock, or needing samples first, or wanting a formal written quote and so on.

Thirdly, start chatting with some of your possible suppliers. Will they be prepared to supply you? What are their conditions of sale? How long does it take for them to supply after you place an order?

Those three points are just a start, but at least its getting you taking your first steps. From there you will come across many questions and will hopefully find the answers as you go along. This method is very common as our schools in South Africa do not prepare our learners to start and run businesses, so anyone wishing to do so has to figure it out themselves. If you don’t have the time and money for a course and you are forced by your circumstances to start earning money with a business, then this is the option that many have quite simple been forced to take.

Once you are going, you will need to spend some time researching and finding the answers to all the questions and problems you come across, which brings us to our second solution.

2. Research your business management information on the internet.

Courses cost money and take time to complete, but fortunately we live in the era of the internet and there is plenty of information out there on how to start and run your own business. That however is part of the problem. There is just so much information out there. Some of it is applicable to the US or Europe, but even then you can find information that is applicable to businesses all around the world.

Again you have the problem of where to start, but as you are reading this, its a good sign that you have already started. For now we would suggest you focus on information that is geared for South African businesses as so much of running a business is affected by the country in which it trades. For example, local laws, taxes, banking systems, labour law and the like.

Google and Bing will have to be your friend here and its going to take time – lots of it. Keep your searches to local South African content. At first you will most probably find all the information overwhelming, but as time passes you will slowly begin to figure out what has worked for others and what is more important.