What will you need to start your own business? [2006]
- Date : (2006-06-27)
- Author : SAIE
What will you need to start your own business?
Profile Pam Golding first started selling property as a hobby. As a full-time mom to three children, she had little time for anything else. However, as her children grew older, she began to focus more on a career in real estate. Soon she was ready to become an independent estate agent and start her own business. Pam’s greatest asset was her ability to match buyers with sellers. But she didn’t know much about the legal and financial aspects of selling property. She knew only that these were vital components of the real estate business. So she enlisted the help of a friend who was an attorney. He taught Pam all about bond finance and showed her how to draw up contracts. She started out as a sole proprietor, doing everything herself. As her success and reputation grew she finally decided to take her “hobby” seriously and form a company. That was in 1976. Today, Pam Golding Properties (PGP) is one of South Africa’s most respected, most successful and most recognisable estate agencies. PGP has a network of more than 150 offices and employs more than 1 600 estate agents.
Business start-up checklist
Once you have decided on the type of business you would like to start, your next step is to find out exactly what you need to get going. Use the following checklist to discover how to get your business up and running.
1) Business Plan. Before you start your business, it is essential that you compile a business plan. The plan should state your objectives and goals and describe in detail how your business will work. Later on in the series, we will help you to compile a business plan in detail.
2) Business ownership. Choose a form of ownership which will suit your business needs. Options include trading as a sole proprietor, partnership, close corporation or company. The form of ownership you choose will have different financial, legal and tax implications, which you will need to explore in more detail.
3) Legalities. Choose a name for your business and register your business with CIPRO (www.cipro.gov.za). Find out if you will need to obtain a business licence or permit to run your business. Will you need an accountant to sign off your financial statements and an attorney to draw up any legal contracts? Will you need to register for VAT? Will you need to take out business insurance?
4) Finance. How much money will you need to get started and to see you through until your business starts making money? Will you need a loan or do you have savings? Or do you have assets you can sell to raise capital? You will also need to open up a business bank account, as you will need to keep your personal finances separate from your business.
5) Staff. Will you need to employ any staff? If so, will you need to register them for UIF, PAYE and SITE? What salaries and wages can you afford to pay?
6) Equipment and machinery. Do you need equipment or machines to run your business? Can you hire or lease the equipment you need, or will you have to buy it?
7) Raw materials and stock. If you intend manufacturing goods, what raw materials will you need and where will you be able to get them? If you intend retailing products, what stock do you need and who are your suppliers?
8) Location. Can you run your business from home, or will you need to hire premises? What rent can you afford?
9) Distribution. If you intend producing goods, how will you get them to your customers?
10) Marketing and advertising. How will you market your business to potential customers? What advertising can you afford?
11) Sales. Will you need to hire sales representatives to sell your products or services? What level of sales do you need to cover your costs and make a profit? What price do you need to set on your products or services to make a profit?
Sadly, for many wannabe entrepreneurs, the start-up checklist can become a list of reasons why they can’t start their own business. But the truth is, you don’t need everything on the checklist before you start. What you really need, more than anything else, is simply just to get going. In the next issue, we will explore ways in which you can raise capital for your business.
