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Start your small business off on the right foot

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As we head into a new decade, many aspiring entrepreneurs will be looking to start their own successful businesses and potentially contribute to creating much needed jobs and GDP growth in South Africa.

Lauren Deva, Sales Head for FNB Business Core Banking, says that since FNB’s integration into the Companies and Intellectual Property Commission (CIPC) in July 2013, FNB has assisted with the registration of 65 241 companies. The CIPC annual report for 2018/19 shows that the volume of company registrations increased by approximately 9000 registrations compared to the 2017-2018 financial year.

Deva adds that, while success can never be completely guaranteed, there are key steps that entrepreneurs should consider when planning to start a business.

These include the following

  • Do your research – Conduct market research to ensure that there is demand for your product or service. Try to identify gaps in the market or opportunities for new products or services. You should also research information about starting a new business. ‘Fundaba’, a free interactive e-learning platform developed inside the FNB banking application, is an excellent starting point.
  • Register the business correctly – You can choose to run the business as a sole proprietor, which is the more popular choice by many entrepreneurs, or you can register the business with CIPC as a private business. Another option is to run the business as a sole proprietor for the first few years and then register the company as a private business. If you choose the sole proprietorship option, it is vital to keep your private and business finances separate but be cognisant that you are personally liable for any debt that the business incurs.

Registering a private company limits your liability risk as an individual and your business can benefit from tax benefits/deductions such as business expenses, auto expenses, medical aid, and office space.

The cost of registering your business is relatively low at R125 (no name reservation) to R175 (name reservation included). At FNB, we offer clients the ease of registering their business through the FNB website and will help you open a business account suited to your needs.

  • Keep initial costs low – When starting out, try to keep your costs low, without compromising on the quality of your product or service. For example, you can save on bank fees by making use of FNB’s First Business Zero, a business banking account for sole proprietors with no monthly fees, access to free data and QR Speedpoint R.
  • Make the most of marketing opportunities – As a small start-up business, you are your best marketer. The 2018/2019 SA SME Landscape report revealed that access to market was one of the biggest challenges faced by small business entrepreneurs.

Take advantage of opportunities to showcase your business, whether it’s via an advert in your child’s school newsletter or an advert in a local newspaper. Don’t underestimate the power of word-of-mouth advertising either – people can’t support your business if they are unsure of what you do. Social media is a great platform to create a buzz around your product offering so use the tools available to put your business in the spotlight.

“In these tough times, we look to the SME sector to revitalise the South African economy, but small business owners are urged to take the correct steps to ensure that they launch competitive, thriving businesses,” Deva concludes.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.