Everything You Need To Know Registering A Business In South Africa
South Africa is one of the most entrepreneurial countries on the African continent. Data from the 2019 Annual Financial Statistics (AFS) survey shows that small businesses are responsible for just above a fifth of the total turnover from the formal business sector, with large businesses enjoying the biggest chunk, just over two-thirds (68%) total turnover.
In 2013, small businesses generated 16% of total turnover in the formal business sector, improving to 22% in 2019. The contribution of large businesses over the same period fell from 75% to 68%. From 2013 to 2019, the formal business sector increased turnover from R7.0 trillion to R10.5 trillion, representing an average annual growth rate of 7.0%. Medium business increased turnover by 8.4% per year, and large business by 5.4%. These figures do well to inspire business in South Africa.
Based on an annual survey conducted by the world bank, South Africa was ranked 34th out of 183 countries concerning ease in doing business. Furthermore, the report said that South Africa serves as a strategic and efficient springboard into sub-Saharan markets.
Starting Your Business In South Africa
Starting anything requires prior knowledge and planning in advance. The same goes for starting a business in South Africa. Here are 5 steps that will guide you in the journey of starting your own business.
1. Idea generation and validation
Here, like any entrepreneur, you are tasked to determine the foundation of your business. A lot of hard work is required at this stage to understand the problem your "business" will be providing solutions for. There are a variety of business ideas that entrepreneurs can do research on and come up with great ideas for their business; taking a quick look at them, these include;
Idea based on your personal knowledge and experience.
Generating an idea from existing models for stance on what has worked in another country could be applied to the domestic markets.
Combining multiple existing solutions in the marketplace.
And once you come with a great idea for your business, you need to validate it. This is where you get the solution out to the people and collect feedback through avenues like interviews and surveys. Then, you can use this knowledge to develop your solution better.
2. Set a business strategy
This helps you to turn your idea into action. Next, draw up a business plan. This will be the timetable for your business in South Africa, a road map showing how you will go forward and what kind of resources to deploy. This step would make sense if the reconnaissance and research were spot-on. The results will be fruity.
This is about business. You are supposed to make money. That is how business is supposed to work. So you ought to figure out the prices of your products. It shouldn't be exorbitant to chase away customers, and neither should it be too low that it can't cover and reward your operational costs. This is meant to assure your business in South Africa of regular cash flow.
4. Budgeting and funding capital
Budgeting for your business is essential because no one can sit and predict the financial future of their business in South Africa. You ought to plan for the future with the available resources, accompanied by a little extrapolating and expectation. Every entrepreneur is advised to draft a spreadsheet of his business or enterprise cost. When you have the total cost of a startup in bookkeeping, you can access finance for your business from financial institutions or funds from donors.
5. Registering your business
Once you have your solid business idea implemented, business plan, and budgets all in place, you ought to have your business in South Africa register