When Mohamed Rasivhetshela launched his micro-lending business, Makanda Finance, he had R1 500 borrowed from a friend (which he paid back within the month), a notebook and a bicycle. Today he runs a sophisticated online lending and investment portal with a turnover of R1,2 million per month.
How did he do it? Simple. He recognised that his community needed access to small loans at a smaller interest rate than local loan sharks (or ‘mashonisas’) offered and that there were other community members who wanted to invest their money and see short-term returns.
His solution brought these two groups together. It was an ingenious solution that required no start-up capital, since his investors provided the capital used for the loans. He then saved his profits until he could start building a sophisticated online platform and move into proper offices, although he still keeps the business as lean as possible.
Read more on Makanda Finance here: Makanda Finance Proves That You Can Start A Business With No Capital
Start small, test your market and gain traction
When Nicholas Haralambous launched NicSocks.com he set himself a goal: He gave himself eight weeks to launch a niche online retail store that sold socks, and he wouldn’t spend more than R5 000 doing it.
The website was easy. WordPress and other open-source platforms mean you can set up a website simply and stylishly for less than R500. He then used the remainder of his cash to design, manufacture and stock his first batch of socks, and tapped into his social media channels. He sold 800 pairs of socks in ten days for R99 each. Those profits went into purchasing more stock, and so the business grew.
Today he has rebranded the business to NicHarry, and has five retails stores across Cape Town and Pretoria, and 70% of his sales are in-store, with 30% online. All from R5 000 seed money.
Read more on Nicholas Haralambous here: Kickstart Your Business Through Crowdfunding
Pretend you’re bigger than you are while keeping costs down
Justin Stanford, founder of venture capital firm 4Di Capital and the licence holder of ESET South Africa, launched his business from a garage in Cape Town. He had no start-up funds, and created an entire business through digital channels to keep costs down and because he simply couldn’t afford to ship software that was on discs and in packaging. Instead, he offered ESET’s products and support entirely online.
It was a genius move: It kept costs down, and it also allowed his company to seem much bigger than it actually was. If someone called him, he and his one intern employee would swop phones between them to make it seem like calls were being transferred to different departments — when in fact they shared a desk in a garage.
Read more on Justin Stanford here: Justin Stanford: 4Di Group’s Risk-taking, Convention-bucking Lunatic
Get your clients to pay you upfront
When Karabo Sepharatla launched his camping butler service, Camping Khapela, he had a piece of advice from Vusi Thembekwayo, a serial entrepreneur and investor, firmly in mind: The best businesses are built around clients who pay you upfront.
With no start-up capital of his own, he used his first client’s upfront payment to purchase all the camping equipment and food he would need for the trip. He made sure he earned nothing on the trip to keep it affordable for his guests, but he walked away with all the equipment he would need to continue offering this unique service: A fully serviced camping experience for the uninitiated camper.
Read more on Karabo Sepharatla here: Customers Will Pay For Amazing Experiences – If You Deliver Explains Karabo Sepharatla
Start small but dream big
Simphiwe Majozi and Sihle Ndlela, co-founders of Majozi Bros Construction, have always dreamt big. Their goal is to become one of South Africa’s biggest construction companies, and they’re funding this vision through their own organic growth.
Starting out as builders who needed almost no start-up capital because they could use client money to buy materials, they saved up enough profits to buy a small property in an up-and-coming area bordering suburbia and a township. They built a house and sold the property for a profit. They then used that profit to build a second property.
In this manner, they moved into a high-end gated community in KwaZulu Natal. Because they couldn’t secure a contract as the official construction company for the development, they purchased a stand and developed it themselves, and then another, and another.
It’s a slow and steady process, but with each development they achieve three things: They prove their abilities, grow their capital (which goes straight back into the business), and get one step closer to their dream.
Read more on Simphiwe Majozi and Sihle Ndlela here: How Majozi Bros Construction Built Their Business, One Brick At A Time