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Janine Do Cabo | Business Growth Strategist

Small business development explained

Janine Do Cabo, Business Growth Strategist, Johannesburg

April 10 2019

It is said that 80% of all start-ups in South Africa fail within the first 3 years! 

That is a staggering percentage.  That means that if 100 entrepreneurs decided to start a business, only 20 would succeed in the first 3 years.  As insane and tragic that is, it’s also a clear indication that those crucial infantile years, could make or break your business.  So before you type the resignation letter from your 9-5 steady incomed job, here are a few questions you may need to ask yourself, if your goal is to be the next Richard Branson one day.

  1. What’s the plan?

Planning is or should be a part of everything you do when aiming at the bullseye of success.  And although imagination keeps the cerebrum of the frontal lobe of the brain active, putting a plan to paper brings accountability and therefore, gets the ball rolling.  It also shows that you’re serious and gives you a sense of direction.  Zig Ziglar, the greatest motivational speaker of all time (in my opinion) once said that “A goal properly set is halfway reached.”  With that gem of wisdom in mind, start by writing out 5, 10 and 20-year goals for the organization.  Where do you want the organization to go?  Is it attainable?  What can you do now to take a step in that direction?

Proper planning includes a blueprint that answers who, what and how questions.  Who you are and whom you intend on adding value to with your product or service.  What product or service you intend on providing and how you intend on doing it. If financial support from an investor or financial institution is a part of the plan, then consider drafting a traditional business plan.  Although longer than a simpler business plan, it includes forecasts and projections that serve as motivation for investment.

  1. Are you aware of the processes and procedures of registering a business with CIPC?

This sounds like a loaded question but that’s only because it’s a long one.  CIPC stands for Companies and Intellectual Properties Commission and it is where you go when you ready to cement the dream to be your own boss. There are a number of things you need to consider though when registering a company.  Namely:

  • What documentation is needed
  • The cost of registration and
  • The time it would take.

You could save yourself time and effort if you’re willing to invest in the professional services of a company that understands and anticipates the in’s outs of company registration, or alternatively, opt to tackle it alone.  Whatever you choose to do remember that before you start trading, it is required by law to make sure that your business is compliant with the Companies Act.

  1. Do you have enough money to sustain you until you make a profit?

This is a very important question because if the answer is no, then you will very quickly eat into the costs that you will incur to run the business – also known as running costs. Poor planning in this area plummets the success trajectory because if and when profits are made it is never really seen and therefore unmeasurable.

  1. Can you run the business alone or do you need minions, sorry I mean employees?

This is a bit of a tricky one to figure out at the onset because it’s a gamble.  You may hit the ground running or may have a much slower start, but before things get too hectic it’s wise to factor this in because you may not be able to handle the workload that comes with a booming business period.  Once that is established the next area of concern lies in laying out the procedures that need to be in place for higher, middle and lower-level management.  The spine of a company is the HR, finance, marketing, and sales divisions.  If you can’t afford full-time staff for HR and finance, then consider outsourcing.

To assist the sales and marketing divisions in acquiring leads and making targets, is there a client base to sieve through prospects?  If not, lastly is there a cost involved to get one? No sales = no income.

  1. Can you set up a proper business budget?

A business budget is an invaluable tool entrepreneur’s must use in order to allocate funds for setting up and running their business, the salaries they can afford for themselves and employees and, if need be, how much they can set aside for a good marketing plan that brings a return on their investment.

Running costs may include phones, internet bills, staff salaries, vehicles and so on. If you don’t have a business budget reflecting the running costs and sales, you will not know whether you’re breaking even or making a profit; in saying that, the budget also allows you to determine where your breaking even point will be.

In order to start a business, you must have starting capital.  This amount should factor in the money that you will need for things like registration fees, legal fees, internet installation, office furniture, computers, printers, etc.  In most cases, it is stated in the business plan under the financial section when funding is needed.  Proper research needs to be conducted in order to establish just how much you may need.

For marketing, you need to decide (after the initial start-up costs of web design and promotional expenses) whether or not you have the expertise needed to run a successful marketing campaign thereafter.  If not, then it’s best to consider investing in a company that specializes in this area.  Marketing is the vehicle needed that drives sales in the direction of profit and ROI.

Starting a company is daunting, and rightly so; it’s stepping into the unknown with a dream and hope to succeed in a place that you have never been before.  For lack of a better word, it’s risky but as the saying goes – nothing ventured is nothing gained. Here at JDC, we can assist you in answering all of these questions, so that your dreams can become a reality.


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