How to Start a Business in South Africa

South Africa needs entrepreneurs. But how do you go about starting a business?

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.

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!

Funding
Funding for various types of businesses is available through Lulalend. Lulalend provides fast and flexible business funding to SMEs and sole traders that traditional lenders often can’t serve. There are no upfront obligations and you can get access to between R10,000 and R2,000,000. Read more…

Statistics
80%-90% of businesses formed in South Africa fail within the first 2 years. The average global failure rate of businesses is 30% within the same period.

South Africa is ranked number 84 in ease of doing business as of 2019. It was ranked 32 (lowest) in 2008. This means conducting business in South Africa is extremely difficult.

It’s important to familiarize yourself with statistics as an entrepreneur, they paint a better picture of how things really are, especially to people with no experience.

Registering a business

The South Africa Government Services website has information on registering a business in all official languages.

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