Entrepreneurship Many people today create their own employment, for a variety of reasons. You may have spotted an opportunity in the market, or are frustrated and feel unfulfilled in your current career and need a new challenge. You may want independence by not working for a boss, or wish to improve your financial position. You may want better working conditions. You may have been retrenched or cannot find a job in your geographical area or area of skill. Or you may be a young person with lots of energy, but you cannot find an entry position to the labour market.

Entrepreneurship is an exciting alternative to working for an employer. Starting your own business may not always be easy, but with hard work, determination and dedication and most important, good planning and knowledge of the product market, the rewards in terms of both income earned and job satisfaction, can be great.

Government in South Africa has realised the potential of entrepreneurship to create employment and additional revenue for the country and has put in place a number of strategies to stimulate the start-up of small businesses and co-operatives, which are two examples of entrepreneurship.

Small BusinessA small business is often started up by one person and expanded to a family business, before other people are employed. It provides a product or service that is needed in the community and income is thus ensured for the owner.

Sometimes unemployed people start up what is called a “survivalist enterprise,” where they start off alone and for example sell fruit on the street corner or bake fat cakes. They make just enough money for their families to survive. There are many examples of what you can do to earn an income if you do not have one. Watch the Employment Services system of South Africa (ESSA) website for forthcoming survivalist business ideas.

When the business reaches the stage where about five people, usually family members, work together, it is called a “micro enterprise.” A “very small business” usually has less than 10 employees and a “small business” less than 100 employees

Do you have what it takes to start a small business?

The Checklist for Small Business Flair below indicates some qualities successful small business people have according to research. See how you match up against them.

Checklist for Small Business Flair

Make a tick (√) in the box next to the quality. Remember this checklist is not a scientific questionnaire that will ensure success for you, but only an indication as to what the qualities are that research indicates, are normally needed by successful business people.

Qualities of Successful Small Business Owners √

I have a strong sense of dutyI can solve problemsI can make plans and organise to get work doneI can take decisionsI start doing work by myself and do not need to be encouragedI can persevere despite setbacksI have lots of energy and enthusiasmI am comfortable with taking risks if I know the chances for a positive outcome is goodI have good ideasI can deal with stressI can work long hoursI can network with other people and have a wide group of contactsI can convince other people easilyI want to control the way how I work

Advantages and disadvantages

Advantages:

The following can be advantages of starting a small business: It can be a source of income Small businesses give you some more flexibility with regard to working hours,

although you must work very hard

Giving people the feeling of satisfaction that they created something out of nothing

Can be your own boss Ability to work from home Chances for building up something that you can sell later or give you wealth if it

succeeds - all big businesses started small! The money needed for a small business is not too much Small firms often have exquisite products to offer.

Disadvantages:

Before you start a small business, consider the following possible disadvantages:

Since a small business is started from the beginning, it needs a lot of marketing to become

Known to buyers.

Most people prefer to do business with an established business - your service and product thus has to be excellent and unique, to obtain a consistent client

base.

If start-up grants or loans cannot be paid back, it can have serious implications for the owner-

plan well and get financial advice.

It is sometimes difficult to get start-up funds and the interest on it is high.

Small businesses often deal only in a limited number of products and if the demand for these products goes down, the business can go bankrupt.

Starting a small business takes a lot of hard work, inspiration and perseverance. You need to be prepared to go all the way and continue even more.

Your business idea

While not everyone can be entrepreneurial giants, you have skills, talents and services that you can offer and which other people need. It might be the best idea to start a “survivalist” business on a very small scale to make ends meet at first, or start a business as a part-time job and later expand your business, as your client base grows. There are many examples of learners at school who for example designed websites for looking up information on where wild animals are to be seen when on tour, when they were still at school, or a student who started to design buildings while he was still at University.

The first step in setting up your own business is to decide on what kind of business you would like to have. You need to think of any service or product that you could sell in your community. Ask yourself these questions:

“What do people need and what do they find difficult to buy?” “What service do they require that are not being supplied by an

existing business in your area?”

“What can I do better that existing businesses are doing?” “What raw materials do I have easy access to?”

You might find worthwhile ideas in newspapers and magazines or from franchisers (people who have bought a right to sell a specific company’s goods or services in a particular area), who have already tested viable ideas. Remember, you are your own biggest source of ideas. An idea may result from:

Your career interests; Your hobbies; Your work experience; Exposure to other jobs and businesses; Your knowledge and skills; Available equipment; Available resources/raw material

You can use the Business Idea Planning Sheets below to help see if you can come up with a business idea.

Business Idea Planning Sheets

There are a number of Business Idea Planning Sheets on each area that provide you with inspiration on which Business Idea to choose.Business Idea Planning Sheet on Career Interests

The following is a list of career fields in which you may have a career interest and wish to set up a small business. See what the career fields entail and write possible business ideas next to the career field that you find interesting or to your liking, or think that you can be passionate about. The career areas listed under each Career Field are not the only available, but can serve as an example of what you can do. You can also choose to do something that is a service to the field of your choice, for example provision of baking to the army.

Business Idea Planning Sheet on Career Interests

Career fields Ideas for small business

1. Agriculture and nature conservation

Small businesses that are in the following areas:

Farming Gardening Forestry Caring for wild and tame animals Caring for parks

For example: Setting up a gardening service for home owners.

2. Culture and Arts

Small businesses that are in the following areas:

Pottery and beadwork Dancing Singing and music Making jewellery Designing fashionable clothes or décor Drawing cartoons Other art work, such as painting pictures Television or video work Watch repairs

For example: Making exquisite silver jewellery

3. Business, commerce and management

Small business that are in the following areas:

Doing financial statements Managing other people Buying goods for a company Marketing products and services for a

company Administration of an office Developing statistics Helping people to buy and sell houses Taking phone calls for an office Typing documents

For example: Offering to do capturing of registration of clients off-site to the company

4. Communication Studies and language

Small businesses that are in the following areas:

Using language to help people obtain information by speaking and writing.

Translation of languages. Language expert Being a journalist for a magazine or

newspaper. Copy writer (writing articles or

documents), Writing fiction or non-fiction Edit written material Publishing books.

For example: If you are a good writer, you can write documents at home for organisations on your laptop

5. Education, training and development

Small businesses that are in the following areas:

Teaching/training people of all ages in all educational institutions.

For example: Giving extra Mathematics classes to learners who experience difficulty with the subject.

6. Manufacturing, Engineering and Technology

Small business that are in the following areas:

Drawing machines, bridges, roads, aeroplanes,

Repairing electrical and electronic household appliances, such as stoves and TVs

Making and fitting together parts of machines, so that they can work smoothly

Mining Building and repairing engines and

airplanes Plumbing Operating forklifts Designing and making tools Flying aeroplanes.

For example: If you have skills in repairing TVs, then you can begin to do that in your free-time, until you have built up your own business.

7. Human and Social Studies

Small businesses in the area of:

Improving people’s functioning (Psychology and life skills training)

Religious studies (clergyman and priest) History The earth and why people are living in

cities (Geography) Human relations (sociologist) Ancient people and animals (Archaeology)

For example: A small business in historical tours

8. Law, Military Science and Security

Small businesses in the area of:

Looking after the safety and security of people

Justice in the country. Police Force Law Correctional (prison) services Following a military career (army, navy,

air force) Traffic cop,

For example: A small business in security services

9. Health Sciences and Social Services

Small businesses in the area of:

Helping people by caring for their bodily and mental health and well-being.

Preventing illnesses, promoting health, caring for ill people, nursing

Medical careers Social work. Dental care Eye care Medical services such as paramedic,

radiography, physiotherapy, dietician and sports trainer, etc

For example: Setting up a small business such as selling medicines or providing relaxation therapies.

10. Mathematical, Physical, Computer and Life Sciences

Small businesses in the areas of:

Working with numbers Working with computers Installing computers Working with plants and animals

For example: Small business in installing computers or designing webpages.

11. Services

Small businesses in the areas of:

Serving people in restaurants and hotels and other leisure facilities

Catering Tour guide or travel agent Game ranging Transport Personal care such as hair-dresser Care for old people Domestic servant Sales Handyman

For example: Setting up a catering business.

12. Physical planning and construction

Small businesses in the area of:

Planning and drawing buildings like in architecture, building houses

Road-building or bridge-building Electrical wiring in buildings. Painting and plastering buildings Working out building costs.

For example: A small business in painting other people’s houses.

Business Idea Planning Sheet on Hobbies

See whether you can perhaps start a small business through the skills you developed in a hobby. On the left hand side, list all your hobbies such as soccer, swimming, playing games on your computer, TV-watching, reading. Then on the right hand side, write down possible ideas for small businesses coming from the hobbies, that could possibly work.

Business idea Planning Sheet on Hobbies

Hobby Small Business Idea

For example Soccer For example: Selling soccer caps and flags at games.

Business Idea Planning Sheet on Work Experience

Perhaps a job you had previously could lead to a small business idea. In the Planning Sheet on Work Experience list all the jobs you have done on the left side, on the middle all the tasks you had to do there and on the right-hand side, brainstorm possible small business ideas you can think of that can come as a result of the work experience.

Business Idea Planning Sheet on Work Experience

Position held Tasks for post Possible small business idea

For example: Secretary for Executive Manager

Type documentsFile documents orderlyMake appointmentsEnsure Manager has trip bookings, hotel accommodationBrief Manager on daily meeting scheduleBrief Manager on priority datesReceive and make tea for guests

1: Start small business at home typing documents for peopleI2: Off-site trip arrangements for organisations

Business idea Planning Sheet on other Job/Business Exposure

You might have had experience as a volunteer in a work situation or worked for a friend or might have seen other people doing something interesting as a small business. See if any business idea can come forth from this type of exposure. Complete the Planning Sheet on other Job/Business Exposure. List all your experiences below each other in the left hand column and on the right hand side,

Business Planning Sheet on other Job/Business Exposure

Other job exposure Business ideaFor example: Work as volunteer in an animal shelter

Care for the pets of other people when on holiday

Business Idea Planning Sheet for Knowledge and Skills

You can list your own knowledge areas and skills on the left-hand side and come up with a small business idea, where you will use those. You can also do the Skills Checklist on the Employment Services system of South Africa (ESSA), then list your identified skills on the left-hand side column and then come up with business skills. You could also combine the above two.

Business Planning Sheet for knowledge and Skills

Knowledge area or skill I have Small business ideaFor example Plumbing artisan Plumbing as a small business

Business Idea Planning Sheet for Equipment

Sometimes people are able to start a small business, because they have equipment, such as a computer or stove available. Other people have the skills, but no equipment. Brainstorm equipment you have available, even if it is a primus stove on which you can cook below. You will in the end also be able to see which equipment or tools you still need.

Business Planning Sheet for Equipment/Tools

Equipment/Tools I have Small business ideaFor example Laptop or tools for fixing electrical appliances in a house

Small business idea: Type documents for people/start fixing electrical appliances

Business Idea Planning Sheet for Resources/raw material

Sometimes people have raw material available and can start a small business with what they have, other times they will have to make a plan to obtain it. Brainstorm the raw materials you have available, below. You will in the end also be able to see which raw materials you still need.

Business Planning Sheet for Raw Materials/Tools

Raw materials/tools available Small business ideaFor example Clay is available close to my home

Small business idea: Making clay pots with pretty decorations for tourists.

You can obtain work in a similar business as the one you want to start. After working a while in such a business, you will have an idea of what is expected of you, what important factors to keep in mind and whether you really want to start a business in that specific product or service line.

Google “www.hubpages.com small business ideas” and you will find endless opportunities for individuals to kick-start small businesses. You will also find advice to start up your business.

The premises, furniture and equipment

The nature of your undertaking will determine your choice of premises. For example, a small factory will be best situated in an industrial area, and a professional service will be best situated in an office building. Consider aspects such as parking, loading and off-loading if applicable, and so forth. When you lease a business premise, study the contract carefully before you sign it.

You will also need furniture for your small business. Make a list of what is needed together with prices. List which equipment you will need as well as raw materials together with their prices.

It is worth finding out whether you can run your business from your home. If you have a skill that is in demand and is suitable for doing at home, consider how much it is likely to cost for start-up, whether you will be able to start your own home industry for example doing needlework, taking care of babies and small children during the day, starting your own garden and providing the community with fresh fruits and vegetables etc. There are a number of advantages involved in this:

You can choose the hours you work You need no money for commuting You can be involved in something you are good at and that you

enjoy. You need not pay rent for your office

Your business plan

Once you know what your business idea will be and what type of premises you need, you can proceed to develop a business plan.

Why do you need a business plan?

To test if your business is viable and feasible Whether the business can make profit To identify gaps, problems and opportunities that might arise in the

running of the business The business plan is a guide or a map on how to run the business

successfully To give clear direction towards achieving the business set target To help you to make an informed decision in business To attract potential funders such as banks to fund the business

No financial institution will provide funding if your business plan is not viable and feasible.

Your business plan needs to cover amongst others the following:

Cover page Executive Summary which summarises and sells your business idea. Business name Owner’s name and contact details as well as skills and business

experience Business Idea Market plan The Marketing Action Plan The Financial Action Plan The Production Action Plan Human Resources Plan Purchasing Plan Financial management plan The Sales Forecast

Two other aspects that you can cover are:

Risk analysis SWOT analysis

Here are some pointers on what you need to cover under:Market plan

To whom will you sell your product or service? What will be the price per item/service? Where will you sell your product?

Marketing Action Plan

Advertising in the media, with flyers, posters, etc. Mouth-to-mouth advertising, that is informing people yourself Personal selling from door-to-door Promotions

Financial Action Plan

Capital needed for equipment, raw material, premises, advertising, etc. Cash flow projections Projected income statements

Production Action Plan

What will be made or sold? How you make your product How many items can you make or produce How long will it take to produce the products Resources or machinery needed and expenses for this Skills needed

Human Resources Plan

List all types of personnel/skills you will need and your plan to pay them and adhere to labour legislation.

The Purchasing Plan

Material needed Who you will buy products from What price you will pay for the product, Product cost Will you make profit after rendering the service

Financial Management plan

How much funding is needed in total to start up the business? How much funding can you provide? How much is needed from outside sources? Who will do the books and when will be our month that will be regarded as

financial year-end, to draw up statements for a year? What type of bank account is needed? How much money will we keep to use in the business How regularly will we bank money?

Sales Forecast

How many products you will be selling How much profit is expected

Risk analysis

Do an analysis of factors that can make your business fail and what you will do when the risk does happen (mitigation).

Typical risks may include the following:

Starting with more credit (money on loan) than you can pay back Discovering that the service you provide, costs more than people can pay for Running out of cash Customers you give credit to, do not pay you back

Swot analysis

A business plan should also include an analysis of the following aspects with regard to your business.

Strengths-what strengths do your business have, that can give you an edge

on other businesses Weaknesses-what weaknesses do your proposed business have that can be

a risk Opportunities-what opportunities are there that you can make use of to

benefit your business Threats-the aspects that can ruin your small business

Skills development, equipment and raw material

If you do not have the necessary skills, equipment or raw material to make a success of your business idea, you can contact a Career Counsellor at a Labour Centre to refer you for assistance

Start-up finance

Here are a few tips on obtaining start-up capital:

Set up a bank account in your small business’ name to make sure that you keep your own and your company’s money separate.

Make sure you have your business plan ready with an indication of how much money you will need

Contact organizations that can provide start-up capital (speak to a Career Counsellor of the Department of Labour).

Some of the organisations that can provide finance or loans are listed at the bottom of this website.

Some general tips for starting up a small business

Before starting a small business:

Increase your savings.  A business is going to require capital, often much more than you anticipate. So make sure you start saving. There will be unexpected expenses, months of little or no income, personal bills that need to be paid, etc.

Scale back on expenses. If you are leaving a salaried job to pursue self-employment, you are going to have to reduce your expenses. Not only will this help you with saving for your business, but there will be less pressure on the business to sustain your lifestyle. You may need to trade in luxuries, such as a big car and skip a holiday or two. Make sure your family is on board with these sacrifices.

Can you start part-time? It is not always necessary to quit your current job in order to become self-employed. Let your employer know of your intentions and nine times out of ten they will support you provided you are not compromising your productivity, abusing company resources or poaching clients.

Crunch numbers. If you already have a business idea, take the time to carefully figure out your finances. How much capital will you require? What are your projections of how many products you will sell at what price in a month? Rather estimate products to be sold as less to be sure of your facts. What kind of profit margin can you achieve? Will you require a loan?

Learn, learn and learn some more. Take the time prior to starting your business, to learn to know your target market, the demographics of your surrounding community (type of people living there and their needs), take courses or self-study to up-skill yourself and get a mentor if you can.

Plan, plan and plan some more. When you do your business plan, include all items, or you will under-budget or run out of raw material or products to sell. The worst case scenario is that you will not get a loan! Get professional advice to assist you!

CO-OPERATIVES A co-operative is a type of society of at least five, but often more members, who start working together to provide goods/products and services to the community and in the process make a profit for their members, thus helping them to earn a livelihood.

Who can set up a co-operative?

Any person can set up a co-operative, but it has to be done together with at least four other people. Co-operative members should be people who have lots of ideas, be able to solve problems, keep on trying amidst challenges, able to work with others in a team and be money-wise (thus be able to work well with money.)

Advantages and disadvantages of a co-operative

Advantages:

The following can be advantages of starting a small business:

Members join forces, helping individuals to face unemployment together Members can make plans together (“two heads are better than one”) Members can support one another Members can pool their skills and ideas Members can pool their money and equipment for the greater good of the group If you have a well-developed business plan, a group will more easily be able to

obtain a loan to set up the co-operative, than a single person

Members keep the wealth that is created in the community, whilst a big business might sent money out of the country

A co-operative helps the community get services and products A co-operative is a way of creating work for its members

Disadvantages

Before you start a co-operative, consider the following possible disadvantages:

Members must be sure that they work together as a team, to prevent conflict Members must decide beforehand how money matters will work-members can for

example share in profit to the extent they contributed Members must be honest and care for each other Setting up a co-operative can be tricky, but fortunately there are organizations

mentioned in this pamphlet, that can help you with this

What type of co-operatives can be established?

The following co-operatives can be established: Worker co-operatives

A worker co-operative is set up to help its members find work, for example baking bread and cakes and selling to the community.

Agricultural co-operatives

Agricultural co-operatives produce food products. A number of farmers can for example group together to produce vegetables or fruit. Each person grows vegetables on small scale, but eventually the group can sell their vegetables together. There is a big opportunity to set up agricultural co-operatives in our country today with land resettlements and emerging farmers having to make a success of their farming to ensure food for our future.

Housing co-operatives

Housing co-operatives help members of the community to build houses. Each member of the co-operative can have a different skill, for example building, plastering or fitting of electricity, etc. When a number of people work together on housing projects, they can finish the work more quickly and do large projects.

Marketing co-operatives

Some co-operatives are set up to market the products and services of members’ products and services. Skilled people take responsibility for this, to ensure best exposure for their members’ products.

Social co-operatives

Members render social services to old or sick people or children that need care whilst their parents work.

Burial society co-operatives

Most people know of and belong to a burial society, where they save together, to finance the burials of their loved ones.

Financial services co-operatives

Members save together and provide loans to their members (stokvel).

Services co-operatives

The members provide a service, such as transport.

Financial services co-operatives

The main aim is to provide financial services to members.

Primary, secondary and tertiary co-operatives

Primary co-operatives

This co-operative is formed by fie or more people and is aimed at providing work to its members and building the community, for example a catering co-operative.

Secondary co-operative

Two or more co-operatives aimed at providing services to its members, for example book-keeping or marketing.

Tertiary co-operative or co-operative apex

This co-operative works on behalf of its members to obtain buy-in from stakeholders, such as Government or the private sector.

Who takes the initiative?

One person needs to take the initiative to set the process going–why not you? Have an initial meeting with one or more other people that you trust (you can also

enquire about unemployed people at Employment Services of the Labour Centre close by you)

Test your ideas and tentatively decide on the following-see box below:

Your product or service The skills you will need Unemployed people in your community that have the skills you listed.

What products and services can the co-operative offer?

Co-operative members should choose to provide products and services that they have the skills for and what they like doing. This will ensure that

they can persevere with the work, put in the hard work required to make a success and still be happy.

The goods and services that you provide, must be something needed in the community, so it might be a good idea to ask around in the community beforehand. List a few questions that you can ask the community members and do your market survey in the area where your co-operative is going to be. People will buy goods and services that are relatively cheap, but are special and of good quality and which they can get close to their homes, or roads of transport. Basic needs such as bread, vegetables and clothes, are also a good seller. Tourists from overseas would like to take something home that is typical of South Africa, such as beadwork or carved African animals.

Also think what raw materials you can find easily in your area and the skills you have to make something special out of it. You can use the Business Planning Sheets provided under Small Business to develop a Business Idea.

A few ideas are provided here to stimulate your thinking, but what you choose should be really needed and special for your customers:

Products Services

Arts and crafts, such as embroidery, beading, wood-carving, pottery, handbags

Growing vegetables Home industry-making sweets,

cakes, jams and gifts Baking bread and cakes Fishing Dress-making and uniforms Jams and dried fruit Making soaps and candles Souvenirs like key rings Furniture Seeds, fertilizer, pesticides and

farming implements Brick-making Mining Bulk grocery buying and selling at

cheaper prices Stationery Toys

Performing arts such as dancing, singing or acting

Security services Hairdressing Washing clothes Pedicures, manicures and other

beauty services Baby-sitting Caring for the aged House-building Providing transport Cleaning services Cooking and catering Garden services Car-washing Photography Marketing services Servicing cars Financial services (doing books of

companies) Repairing services Phoning, faxing and photocopying

What happens at the formation meeting?

Invite the unemployed people that you would like to join you to form the co-operative, to a formation meeting. Take the group through this pamphlet. Discuss profit-sharing amongst members and any money that has to be paid for start up, by them. Invite the group to join the co-operatives. Those willing to join complete the membership form. The members must then take some important decisions. It is recommended that you look at the advice provided for small business owners to see how they should develop their business plan. Decide, establish and develop the following-see box:

A board of directors who will serve for four years. A Supervisory Committee that is made up of independent people, not directors

of the Boars and who can oversee the finances and interests of members. A Chairperson for future meetings of the group, who must have a good sense of

how to take the group forward, who can motivate the members, is a hard worker, who can keep the group members together, to whom people can look up to, and who can solve conflict and problems

A secretary for future meetings, who has good organizational and language skills and who can keep minutes of your meetings and organize meetings on regular basis

A treasurer for your co-operative, who can manage the money issues. The person must be able to keep book of income and expenditure.

A name for your co-operative and register the name with the Companies and Intellectual Property Commission (CIPC). The name must show the products or services you render, and whether the cooperative is a primary, secondary or tertiary cooperative, for example Size Housing Primary Co-operative Ltd. See http://www.cipc.co.za/Coops_RegProcedure.aspx.

The products or services to be rendered. The equipment and raw materials will be needed (An Employment Services

Practitioner/Careers Counsellor of the Department of Labour can assist) List the equipment and raw materials with possible suppliers and cost (An

Employment Services Practitioner/Career Counsellor of the Department of Labour can assist)

The customers of the co-operative. Where the co-operative is to be set up (it must be in a place within easy reach

of the customers and where it can be easily seen) A business plan, stating the business idea (what will you be offering to clients

and why is there a need for this), your market (which customers will you target), the location of your co-operative, the equipment and raw material your co-operative will need and how you plan to get them. Include the start-up budget and profit budget in your proposal.

Ask a small group of members to work out a financial plan for your co-operative. There should be two financial plans, namely the start-up plan and a profit plan. The Start-up plan must include all expenses to start up the co-operative, such as hiring or purchasing a venue, furniture, electricity and water, stationery, registration costs of the co-operative, equipment and raw material, initial transport costs, telephone connections, marketing costs etc. Try to keep the start-up costs low, so that you can obtain a start-up grant/loan more easily. The profit plan must include all your costs to run the co-operative on a monthly basis, for example salaries if any, land taxes if any, insurance costs, telephone bill, transport of products or for services, purchasing raw materials, stationery, etc. The profit plan must also include how many products your co-operative will have to produce at which costs to customers, to break even (paying all your expenses) and to make a profit to provide a salary to each of the co-operative members.

A Constitution for the co-operative, stating the rules of the co-operative, such as frequency of meetings, how membership can be gained, how the Annual General Meeting will be held, etc. The Department of Trade and Industry (CIPC) can provide you with an example of a Constitution. See

http://www.cipc.co.za/Coops_Constitutions.aspx for examples. Complete the application forms for registration of the co-operative. (See

http://www.cipc.co.za/Coops_RegProcedure.aspx. and submit to the Department of Trade and Industry (CIPRO). There will be a small registration fee.

Skills development, equipment and raw material

If you do not have the necessary skills, equipment or raw material to make a success of your business idea, you can contact a Career Counsellor at a Labour Centre to refer you for assistance

How do you obtain start-up finance?

Here are a few tips to obtain start up finance:

Set up a bank account in the co-operative’s name. Contact organizations that can provide start-up capital (speak to a Career

Counsellor of the Department of Labour).

Some of the organisations that can provide finance or loans are listed at the bottom of this website.

Where to from here?

Members of the co-operative must obtain skills development to ensure they can make products or provide services of a good quality. The Career Counsellor at Department of Labour can direct you to such courses.

Hire venue, inform employees and start producing. Have regular meetings of the co-operative members to monitor the process. Keep careful control over stock by writing down regularly how many you have left

of an item-this will help members plan when to order more or produce more Keep careful control of all sales and expenses by writing down every time you sell

or buy anything-this will help that money does not “disappear”. This cashflow budget starts with the total amount you received for starting the co-operative and then you deduct all expenses and add all money that came in for sales. If you do not keep track of all incomes and expenses, you will not know how much to pay each member as profit!

Keep you customers happy and ensure you go out of your way to provide a good service-they will come back!

Some general tips for co-operatives

A co-operative is usually made up of a group of similarly skilled people to provide products and services, but it also needs people with a different set of skills that can manage the co-operative, for example the Chairperson and a marketing person. Choose your critical people with great care.

Make sure the co-operative members have the necessary skills, or they should obtain training.

Co-operative members should be trained in business skills to run the co-operative successfully.

Co-operative members should preferably be trained in problem-solving, decision-making and conflict-management.

Marketing is important-get a good person for this or get into touch with an organization that can advise the co-operative.

Finances are the backbone to your co-operative. Make sure that this part is managed well and that you adhere to good governance rules. Ensure an auditor audits your books and keep this audited financial statement for five years.

Decide upfront when and on what conditions members will be paid and only pay salaries if there is a profit, so that the cooperative can stay afloat and the members are motivated to work hard. Members often demand higher wages and the co-operative need to plough back profit into the co-operative to expand.

Start small and build up capital before you take bigger risks. Ensure you have legal issues clarified-the Small Enterprise

Development Agency and the National Youth Development Agency can assist you with legal issues you need to have in place.

It is against the law for a Co-operative to deviate from its Constitution.

The co-operative must keep money aside that will not be divided amongst the members, but will be used to keep the co-operative afloat.

Keep minute books of your meetings Do not give credit to people before you are strong enough to bear it! Co-operative members have equal say in decisions. Co-operatives can provide more than one product or service

(diversifying). Co-operative members must get as much advice as they can to run

the co-operative. Book a session with a Career Counsellor at the Department of Labour, who will direct you to the right people for support.

A LAST WORD

South Africa has amazing talent. There is no need for people to become despondent, when they cannot find work. Give your business idea life and encourage others to do the same!

Useful Addresses

Department of Labour

The Department of Labour can assist you to decide whether entrepreneurship is for you and to choose a business idea that suits your skills and interests. It can provide contact addresses for support services and training in setting up a small business or co-operative, referrals to sponsors for equipment and raw material, as well as referrals for financial support. Contact the Career Counsellor at your nearest Labour Centre (contact details on website www.labour.gov.za).

If you have employees working for you, you also need to register in terms of various labour laws and adhere to the labour legislation. Please contact your nearest Labour Centre in this regard - see the website www.labour.gov.za for contact details.

The Department of Trade and Industry

The website of the Department of Trade and Industry has very valuable information for people wanting to set up a small business or co-operatives-go to www.thedti.gov.za. The information ranges from support organisations, financial support, forms and example templates for business plans etc.

The Department Small Business Development

The Department Small Business Development is currently responsible for small business development and co-operative development. Assistance can be provided in the area of skills development, equipment, business start-up advice and start-up finance, as well as information on possible large-scale programmes to establish small businesses. The Department Small Business Development aims to radically transform the economy of South Africa by setting up a large number of small businesses. Contact details:sbdinfo@dsb.gov.za, Telephone number: 012 3941006. The Small Enterprise Development Agency falls under the Department of Small Business Development-see contact details below.

CIPC (Companies and Intellectual Property Commission)

CIPC can provide you with the necessary forms to register your small business and co-operative and assist you with legal matters.

The DTI campus

77 Meintjies Street

Sunnyside

Pretoria

Private Bag X237

Pretoria

0001

Tel: Customer Contact Centre: 0861 2472

E-mail: info@cipc.co.za.

Small Enterprise Development Agency (SEDA)

SEDA offices can help with making the business ideas of small businesses and co-operatives more attractive and feasible, training to set up co-operatives, registration of the small business and co-operative, funding for start-up and mentoring in managing the small business and co-operative. A new Co-operatives Development Agency will soon be set up, that will focus only on co-operatives, whilst the SEDA will then focus only on small

businesses. The SEADA website also have valuable advice to start up a small business/co-operative (htpp: //www.seda.org.za).

SEDA Head Office

Tel: Customer Contact Centre 0860 103 703

E-mail: info@seda.org.za

Website htpp: //www.seda.org.za

Mpumalanga Tel 013 755 6046

Eastern Cape Tel 043 706 6700

Northern Cape Tel 053 839 5700

KwaZulu/Natal Tel 031 277 9500

Free State Tel 051 411 3820

North West Tel 014 591 7900

Western Cape Tel 021 487 3640

Limpopo Tel 015 297 2940

Gauteng Tel 011 408 6500

National Youth Development Agency (NYDA)

The NYDA’ Business Opportunity Support Services (BOSS) links youth and women to business opportunities, provide technical assistance and mentorship and assist with financial applications. It also provides a grant for establishing small businesses.

NYDA Head Office Call Centre: 0800 52 52 52

E-mail info@nyda.gov.za

Website htpp://www.youthportal.org.za

Eastern Cape

East London Youth Advisory Centre Tel 043 704 4600

Port Elizabeth Youth Advisory Centre Tel 041 503 9100

Free State

Bloemfontein Youth Advisory Centre Tel 051 411 9450

Gauteng

Johannesburg Youth Advisory Centre Tel 011 834 7660

Tshwane Youth Advisory Centre Tel 012 322 1375

Maponya Mall Thusong Centre Tel: 011 938 4104

KwaZulu Natal

Durban Youth Advisory Centre Tel 031 327 9900

Limpopo

Polokwane Youth Advisory Centre Tel 015 294 0800

Mpumalanga

Mbombela Youth Advisory Centre Tel 013 756 0100

Secunda Youth Advisory Centre Tel 017 631 9500

Emalahleni Youth Advisory Centre Tel 013 653 9400

North West

Rustenburg Youth Advisory Centre Tel 014 591 9600

Northern Cape

Kimberley Youth Advisory Centre Tel 053 807 1020

Western Cape

Cape Town Youth Advisory Centre Tel 021 415 2040

Other finance providers

Business Partners Limited, www.businesspartenrs.co.za, Tel 012 664 3397

Commercial Banks, such as Standard Bank, ABSA

Development Bank of South Africa, www.dbsa.org. Tel 011 313 3911

Industrial Development Corporation. www.idc.co.za. Tel 011 269 3000

Small Enterprise Finance Agency Ltd. www.sefa.org.za. Tel 012 748 9600

Sources

“Co-operative Training. Participants Guide”. Umsobomvu Youth Fund.

“Omskrywing van ‘n Kooperasie.” Pamphlet published by SEDA, a member of the DTI group, Pretoria.

“Regulations for Co-operatives. A User Guide”. Department of Trade and Industry, 2008

“Start Up. Step-by-Step Guidelines.” Muizenberg: The Storyteller Group, 1998-2003

“Starting up a business” Swedish Public Employment Services, 2009

www.cofisa.co.za: Information on “Forms of Co-operatives” Accessed 9 July 2014.

www.cipc.co.za: “Registration procedure” and “formation meeting for a co-operative.” Accessed 9 July 2014.

www.cipc.co.za: Co-operatives Amendment Act, No 6 of 2013. Accessed on 10 July 2014.

www.entrepreneurmag.co.za.

www.mohapigroup.co.za