Your Journey Starts Here
Wondering how to start your own business? Congratulations, you’re about to take your first steps into the exciting world of entrepreneurship! It won’t be easy, but if you follow the steps in this guide, the rewards will be worth it.
First things first, give yourself a pat on the back. The entrepreneurial bug bit you and you said: “Yes, let’s give it a shot!”.
It means that you’re considering joining the approximately 2 million small businesses in South Africa. These businesses are the powerhouse of our economy. As is the case all over the world, an economy with a healthy small business ecosystem is a stronger economy.
Growing South Africa’s Small Businesses
That’s what we’re trying to enable and build here at iKhokha. So, thanks for coming along for the ride!
It’s our goal to make business easier the millions of business owners who have taken the leap of faith into entrepreneurship. But, it doesn’t stop there. As I’m sure you know, more small businesses means more jobs, more prosperity and more opportunity.
So, we’re here to help budding entrepreneurs with big dreams take the next step. Through this guide, you’ll learn how to start a small business through actionable steps.
But remember, all we can do is give you the tools. It’s up to you drive you’re business from idea to flourishing industry.
If you want it badly enough, you’ll get there.
It isn’t an easy road. But, with commitment and the right direction, you too can join the small business scene in South Africa.
Ready to take the next step in this exciting journey? Let’s get cracking on building your dream!
If you want to start your own business, you need to…
Are You Ready to Start a Business?
Starting a business isn’t a shortcut to success. It’s a long road, filled with sacrifices. It’s late nights, early mornings and saying ‘no’ to those weekend plans.
So, before you head down this road, ask yourself: Am I ready to start a business?
The fact is that the perfect time to start a business doesn’t exist. So, even if your initial answer was ‘no’ you might still be in with a shot.
Starting a business isn’t about the stars aligning. It’s about you having the right frame of mind to start a colossal journey. Most budding entrepreneurs are brimming with ideas. Some have so many they don’t know where to start. But, ideas alone won’t get you paid.
What you need is execution and determination. You need the will to make your idea work, no matter what. And to do that, you need to be in the right mindset.
Many people dream of becoming their own boss, but very few realise the hard work it takes to get there. There will be challenges along the way. There will be times when you want to give up. To succeed, you’ll need to be strong enough to keep going.
That being said, if the fire of entrepreneurship is a tough one to snuff out. So, if you have it burning inside you, chances are you have the drive and passion to bring your dreams to life!
Planning Your Small Business
Founding Father of the United States, Benjamin Franklin, once said: “If you fail to plan, you plan to fail”. Among other things, Franklin was an inventor who famously flew a kite in an storm to prove that lightning was electricity.
While Franklin took a serious risk which could have brought the statesman’s career to a shocking end (ba-dum-tis!), he planned the experiment meticulously to ensure it didn’t end in disaster.
If you’re wondering, he stood on an insulator and stayed dry under cover to avoid electrocution. Others, who weren’t as savvy, met a crispy end. The Russian physicist Georg Wilhelm Richman was one such unlucky customer.
The point being that Franklin’s experiment is very much like starting a business. It’s a risk, but if you plan well, you’ll stay safe and dry. If not, you may get struck down before you get started.
Taking the Right Approach
There are a number of ways you could go about planning to start you own your business. Perhaps you have your own approach? That’s great!
We’re fortunate enough to work with small businesses every day. So, we’re in a position to see what works well. With this in mind, we’re going to share the way that we’ve seen work time and time again.
What are the Steps for Starting a Small Business?
6 Steps to Launching Your Small Business
- Find the right idea
- Test your idea
- Choose your business model
- Write your business plan
- Name your business
- Register your business
Within each of these points there are multiple action points which can make or break your business. It may seem like a lot of work (and it is). But, if we break it down piece-by-piece it becomes much more manageable.
Let’s go through the planning process step-by-step.
Find the Right Business Idea
Too often when starting a business, first-time entrepreneurs look for a product or service to sell. This can work, but it our experience, successful businesses are the ones that solve a problem.
Seth Godin is one of the world’s leading marketers. He literally wrote the book(s) on marketing strategy. Within these sacred marketing texts, Seth advocates time and time again for building the foundation of your business on solving a problem.
For Seth, his day-to-day problem solving is intertwined with Fortune 500 companies. For you, the recipe is a bit simpler. And it’s all based on observation.
Starting in your community or workplace, ask yourself:
- What is a problem that people in this environment are experiencing?
- How could I make their lives easier?
- How could something be done better?
Once you’ve found a problem, you’ve taken the first step towards starting your business!
READ THIS: Take a look at Yolisa’s article on Finding the Right Business Idea for more expert insights, tips and tricks help you along the way.
This is one of the most important steps on your business journey. It’ll make or break your business success. So, take your time. Generate a list of ideas and review your list to find the idea that works for you.
Once you think you’ve found an idea, it’s time to move to the next step.
Testing Your Business Idea
By this stage, you’ll be raring to crack on with your branding and give your business wings. Hold up. There’s a critical hurdle you need to conquer beforehand.
It’s imperative that you test your business idea. And there’s a simple reason why. It’s a common mistake that most first-time business owners make.
Ever heard of tunnel vision? It’s what happens when you get wrapped up in the inner world of your business and forget about a critical component in your business success: your customer.
By testing your idea before going to market you’ll be able to:
- Figure out whether your business really solves a problem
- Gain valuable insight from your potential customer to improve your business idea
- Save considerable time, money and effort on an idea that may not work.
Approximately 20% of businesses fail in the first year. One of the reasons why is that they don’t take the time to understand their customer, and how their business improves their customers’ lives.
Don’t let that discourage you. With proper market research you can find out if your idea is worth pursuing or if you need to go back to the drawing board.
So, how do you test your idea?
Ask for Feedback
Your friends, family, neighbours and other members of your community can be your biggest fans or biggest critics. Embrace that.
Pitch your ideas to them and ask them for honest feedback. If the feedback is harsh (and it might be), don’t take it to heart. They key is to try and be objective; to use other people’s perspectives to make your idea even better!
It’s also a good idea to step out of your circle to get the candid feedback of strangers in focus groups. Understandably, this can be challenging. But, if you know what to ask, you can gain some valuable insights from a room of your future customers.
Run a Survey
If you’d like to step outside of your circle and extend your reach, why not run a survey? Platforms like SurveyMonkey and TypeForm are excellent tools that you can use to put together insight generating surveys.
Granted, you will need some investment up front to use these tools, but the return on investment (ROI) will be worth it! And, if you’re looking to send out multiple surveys (which might not be the worst idea), keeping all of your data in one place is handy.
Alternatively, why not try Google? Google Forms is a user-friendly way to send out quick and easy surveys to your database. It’s also free, so if you’re looking for insights on a budget it might be your best bet.
Once you’ve gathered your insights, you’ll be in a better position to decide how your business should be set up.
Choose Your Business Model
There are various types of business models you can choose from. Take a quick glance at South Africa’s booming ecommerce market and you’ll see the wealth of opportunities for small businesses.
According to Rand Merchant Bank, the South African ecommerce market is expected to grow by 150% in the next 5 years. That’s a projected value of R225 billion!
Fancy a slice of the ecommerce market? It’s now easier than ever to take your business online. If you’re more old school, don’t worry. There are plenty of other models you can try:
Brick & Mortar Store
If you’d prefer to be in a set location, look at renting a space to sell products and services. When considering the brick and mortar model, bare foot traffic in mind. You’ll want to be visible so your customers can find you easily.
On the other hand, why not cut the rental costs and work from home? Being home-based (or going on the road and visit your customers) can be a cost-saver, but ensure it makes sense for your business. For example, if you’re selling furniture, it’s probably not the model for you.
Similarly, cut the rent costs out of your monthly expenses by setting up your business online. You will need to pay web hosting fees (and probably enlist the help of a web designer, but if your product is easy to ship, this could be a worthwhile model.
Got skills? Sell them online as a freelancer. Freelancing is a popular model for graphic designers, copywriters and other digital marketing professions. If that sounds like you, why not try build an online following?
Speaking of online followings, if you have one then affiliate marketing could work for you. Affiliate marketers get paid to promote another business’s products and services. If people love your content, it could be a quick way to start a business using what you already have.
If you have a wealth of knowledge in a particular area, you can sell your expertise to businesses in return for a fee.
If you’d rather work remotely, documenting your expertise into guides, eBooks and courses might be more your style. Developing these assets also creates passive income streams, so you can focus on developing more guides and growing your business while still making sales.
Software & Apps
Got a knack for tech? Create an app that solves a problem and makes your customers’ lives easier. You’ll need to hire a developer to bring your idea to life. Better yet, learn the skills you need and build it yourself!
Let’s dial it back…
If this seems too complicated, it doesn’t have to be. If you’re wondering what is the easiest business to start, read this: 50 Cheap Side Hustles
These are just a few ideas. There are tons of business models you can use to sell your idea in a way that works for you.
How to Write a Business Plan
Earlier, we discussed how starting and running a business is hard work. When done right, a comprehensive business plan can radically increase your chances of success.
Sadly, it’s the step that many first-time business owners skip all together. It’s only natural to want to get your business off the ground as soon as possible. Nevertheless, it’s important that you take your time. You’ll be glad you did in the long run.
Writing a business plan might seem daunting at first. Break it up into manageable pieces and work through it at your own pace. There’s plenty of time to run your business when you get the basics right.
What is a Business Plan?
Think of your business plan as a map. It provides the directions you need to navigate your business towards success. It also helps you identify any danger areas and avoid any pitfalls along the way.
A business plan also is the first document any potential investor will request. It shows that you’ve taken the time to plan your approach. So, if you need capital investment to get going, a business plan is non-negotiable.
What Should a Business Plan Include?
At a top level, a basic business plan should include:
- Details of the owner
- Business description
- Market analysis
- Competitor analysis
- Business structure
- Approach to marketing
- Premises and equipment
- Capital investment
- Cash flow forecast
- Next steps: future state
It’s also advisable to create an impactful one page summary of your business plan. Think of this document as your elevator pitch. How can you convey the key information about your business in a simple, succinct summary?
You’ll use this to capture the attention of potential investors before you share your full business plan.
Naming Your Business
Congratulations! You’ve made it this far. By this stage you should have a good idea of your business, your market, your customers and your financials. Now it’s time to get the creative juices flowing and name your business.
No doubt that throughout your journey, you’ll probably have thought of a name or two. Perhaps you’ve thought of twenty? Maybe one hundred? Perhaps you’re still struggling to bed down the perfect business name?
Wherever you’re at, finding the right name is vital. While it might be tempting to use a business name generator, steer clear of these gimmicky tools. Rather invest the time in finding a name that is personal and means something to you and your customers.
How to Come Up with a Business Name
During your search for a business name it’s important to ask yourself:
- Is my business name easy to pronounce?
- Will people find it easy to remember?
- Is it easy to write?
Finally, you’ll need to find out if your name is taken. A simple Google search of your name should provide a clear indication of if it’s available or not. Additionally there are tools you can use to find out more.
Registering Your Business
There are millions of unregistered micro-enterprises in South Africa. Considering that you’ll need to pay a fee to register a business, it’s no surprise that entrepreneurs commonly ask: “Do I need to register my business?”
Seeing as the fee to register your business is nominal, if you’re considering serious business growth, registering your business might not be a bad idea.
The primary benefit to registering your business is the legal upside. Once your registered, your company will enjoy the following benefits:
- Legal protection – others can’t claim your business name as their own
- Trust – your customers will view your company and a legitimate enterprise
- Funding – It’ll be easier to secure investors
Will you be taxed?
From a tax perspective, you can register your business without having to register for VAT right away. Provided that your annual income doesn’t exceed (or is estimated to exceed) R1 million, you can continue to operate and get off the ground before you complete your business tax registration.
READ THIS: It’s easy to register your business! Read Fezile’s article to find out how.
A Guide to Small Business Branding
Your brand is what makes your business recognizable and memorable. It’s your first impression. It’s your opportunity to communicate, visually, what your business is all about.
When you look at it that way, it makes sense that your logo can make or break your small business in the early days. So, you need to be careful who you trust with your logo design.
How to Get a Business Logo
Websites like Fiverr offer small businesses access to graphic design talent at a low cost. The trouble with platforms like this is that freelancers need to produce high volumes to make any money.
The result? Rushed designs that are, more often than not, underwhelming.
If you’re serious about starting and growing your business, consider making an upfront investment in your branding. Connecting with a freelance graphic designer on LinkedIn could be a viable avenue. You can also visit freelance networks like Upwork to find freelance talent within your budget.
Don’t rule out your personal business network either. You’ll easily be able to find local talent that’ll be able to capture your business vision.
The Power of Branding
Take a look at these logos. Chances are you can name the brands they belong to right away. Why should your business be any different?
To be fair, these established brands are world famous. Nevertheless, there are lessons you can take from global brands when branding your small business.
A good logo should be:
- Distinctive – It should be unique
- Practical – It should be clear at any size
- Appropriate – It should be family-friendly
- Memorable – It should be easy to remember
Your Brand Personality
That said, branding is also so much more than a logo. It filters into every aspect of your business. It captures your tone and personality and tells your customers what’s different about your company.
Why is branding important?
- Your customers know what to expect
- You’ll begin to forge an emotional connection with customers
- It makes you distinctive; makes you stand out
- Branding offers cohesion across all channels
- Staff are more likely to align behind strong values
- It generates more referrals over time
How to Market Your Small Business
Once you’ve established your brand personality and you have a slick new look, it’s time to introduce your business to the world. There are a number of ways you can do this. And, critically, some will work for your business, and some won’t. So, you’ll need to be smart about how you spend your time and budget.
Marketing channels you can explore:
- Social media
- Google Display ads
- Email marketing
- Radio / TV
- Community newspapers
- In-store point of sale marketing (posters, free standing units etc.)
- Out of home advertising (billboards, street pole ads etc.)
For most small businesses, social media is a good place to start. It gives you an opportunity to build a following and connect with your customers. It’s also much more affordable than traditional marketing channels.
Social media for small businesses
Again, while it may be tempting to start flooding your Facebook page with content, play it smart. Let’s take a step back…
Remember all that research you did up front? Revisit that crispy new business plan you spend hours poring over. Take a look at the market and competitor analysis once more. Your research should have given you a good indication of who your customer is, what they like and where they play.
As a small business that’s just getting started, you’ll probably have limited budget and resources. This means it’s even more critical that you approach your social media marketing strategically.
- What age is my ideal customer?
- What are their interests?
- Where are they spending their time on social?
- What other brands do they follow?
- What do those brands do well?
Answering these questions will help you understand where your customers are spending their time online and what they enjoy. Once you know that, you’ll be able to craft the right message to reach the right people at the right time.
This will help you streamline your approach. If your ideal customer falls into a younger demographic, Instagram is probably the best place for you. If you’re selling to other businesses, your strategy may be more focused on LinkedIn.
Test and Optimise Your Content
That said, it’s important that you test your content. Use the analytics available on your chosen social media platform to formulate learnings and insights to guide your content.
Did your followers like a piece of content? Create more. Was the response somewhat muted? Try something different!
Social media marketing is a process of discovery. Over time you’ll find what works for your audience and what gets them excited about your business.
Making Your First Sale
It’s been a long road. You’ve brainstormed multiple ideas, tested them, gone back to the drawing board, written a business plan, named your business, branded and started marketing. Now, it’s finally time to make a sale!
While cash is still widely used in South Africa, the Covid-19 pandemic has increased card acceptance as more shoppers look for safer ways to pay.
Why Your Small Business Needs a Card Machine
- Contactless payments (Tap & Go) make it safer
- It’s more secure than carrying cash
- Convenience – it offers shoppers more ways to pay
- It makes your business seem more legitimate.
Which Card Machine is the Best?
Traditionally, most businesses have turned to their bank for card payment solutions and speedpoints. However, high transaction rates from financial service providers often make these solutions too expensive for small businesses.
In addition, most banks will charge a monthly rental fee which you’ll need to pay even if you don’t trade.
iKhokha provides another solution for small businesses. Instead of holding small businesses back with monthly fees or locking them into long-term contracts, iKhokha gives businesses the chance to own their own card machine. It’s a once off payment and it’s yours for life.
Why Choose an iKhokha Card Machine?
- No monthly rental fees
- Low transaction rates (2.75% excl. VAT)
- You can sell prepaid products like airtime, data, electricity and more
- Settle DStv bills, traffic fines and other accounts
- Excellent support from the iKhokha Team
Congratulations on Starting Your Small Business!
If you’ve made it this far you’ve already surpassed the majority of people who want to start a business but never get going. Remember, this is only the beginning. There will be tough times ahead, but if you stick to the plan and believe in your idea, success won’t be far away!
In the words of Virgin Founder Richard Branson: “A big business starts small”. You’ve got this. Good luck!
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