As a small business owner, transport is an important aspect of your financial success. You need to be able to drive to and from meetings so that you arrive on time, as well as have the ability to transport your products to customers and to your store.
You will need to purchase a car for your small business to make life easier and more efficient. Once you have used a car repayments calculator in South Africa, you will need to gather all the necessary documents together in order to make a purchase. Not sure what those documents are? Read on below for some tips on all the documents you need to get a car as a small business owner.
A business plan
A business plan is necessary for the financial institution as it will show them how your business is doing financially and whether or not you will be able to repay them on time and in full. Your business plan should be detailed and provide a financial breakdown of your business at its current point in time.
Having a business plan will also show the financial institution that you are serious about your commitment to repaying your car loan. Being transparent with them will work in your favour and allow them to see the progression of your business with the use of your new vehicle. You will need to carefully outline how you will repay the car and what you will do if you are unable to make the repayments.
One of the most important documents you will need to provide the lender with is proof that you are the owner or part-owner of the business. You will need to turn in the correct documents that correlate to your business, such as a partnership agreement, limited liability company documents or a business licence.
In some cases, you can simply provide your lender with your personal information and the information of your business. You will need to provide the tax identification number of your business too. The ownership documents are important, as they differentiate the purchase from being a personal one to being one for a business.
Be sure to have these documents ready, and make copies in case you should misplace anything.
You will need to provide the lender will all the necessary personal information. This includes a copy of your identity document, the most recent three month’s worth of bank statements for your business as proof of your ability to repay the debt, as well as proof of business and residential address.
If you are the sole proprietor, the financial institution or lender will need these documents because you and your business are seen as one in the same. This means that they need to look at the income from your business and both your business and personal expenses when calculating your affordability. You can use a car repayments calculator in South Africa to do the legwork and figure out your affordability before the financial institution does but their results might differ.
Driver’s licence of the regular driver
If you are going to be driving the car regularly, then you will need to provide the financial institution or lender with a copy of your driver’s licence. However, if you will be allowing your staff to use the company car, then you will need to provide both a copy of your licence and theirs, in order to add them to the insurance as a regular driver.
Providing a copy of the driver’s licence of everyone who will be driving the company car will allow your insurance company to add them as regular drivers. It is also important for your financial institution to know how and how often the car will be used, as this will influence their approval decision. Be sure that whoever you list as a regular driver is trustworthy and will drive responsibly in order to limit the amount of wear and tear on your business vehicle.
Proof of insurance
Once you have settled on the perfect car for your needs, before the car can be delivered you will need to provide the lender with proof of insurance. This is necessary as the financial institution or lender needs to be assured that the car will be insured against anything that might happen to it while en route to your business.
You should look for car insurance that offers affordable premiums and that is tailored to company cars rather than cars for personal use. The proof of insurance should have the details of all regular drivers listed, so that your lender has a comprehensive list of everyone who will be using the car, and should clearly state what is and is not covered. Be sure to make a few copies of this document for the drivers to keep for themselves in case they have any queries or need to make a claim at some point.
Many SMEs Start With Great Plans But Fail To Take The Big Leap
Most small-to-medium sized enterprises (SMEs) are aware of the benefits of good governance practice but, faced with limited time and resources, which could be costly in supporting growth ambitions.
- 27% of SMEs don’t have a vision that covers more than the next 12 months
- 45% of SMEs either don’t have a strategy, or one which covers only the next 12 months or less.
The latest global research, inclusive of Africa in supporting small business growth from ACCA, outlines the governance needs of SMEs. It highlights simple but effective practice over vision, strategy and human capital can provide them with greater flexibility, adaptability and resilience as they grow. This a huge factor in the long-term sustainability of the business, if put in practise.
“If you incorporate good practice for running your business from an early stage, your company is more likely to be resilient and is more likely to appeal to external investment,” explains Jo Iwasaki, head of corporate governance at ACCA. It is about leadership directing the company and being aware of factors both within and beyond their enterprise and build resilient organisations in the face pf the changing world.
The research also found that half (49%) of SMEs do not involve anyone external in their strategy discussions, despite the benefits experienced by those that do, which include additional experience and knowledge of the industry/sector (according to 46%), an independent perspective / constructive criticism (44%) and advice on their growth strategy (39%).
“There are a lot of daily concerns for the leaders of a small business, and often the biggest challenge is meeting day-to-day operations and cash management needs while thinking about the long-term future of the company. And while many leaders are keenly aware of the importance of resilience in the rapidly changing business environment and of buy-in from stakeholders, for example funders and employees, there often may not be the time to think or do much about it,” added Iwasaki.
“I hope that this research helps SMEs in focusing on some of the most crucial issues, and can be a resource not just to SMEs themselves but also to policymakers,” concluded Iwasaki.
How vision and strategy helps small business succeed is available at ACCA Global.
How To Choose An Outsourcing Partner For Your Small Business
Before you jump the gun and choose the first outsourcing company that piques your interest, you need to consider the following factors.
Business process outsourcing (BPO) has proven to be a practical decision for many business owners when it comes servicing your customers’ needs. Gone are the days where you’re needed to juggle customer communication while trying to solve several pressing issues at the same time. Now, you can simply put those concerns in the hands of professionals who can help you achieve greater success.
Many small business owners are forced to wear several hats at the same time. And focusing on your business’ direct needs, such as growing your bottom line, as well as having to manoeuvre your way through the online space to keep your customers happy, is not always possible. Not to mention, there isn’t always enough time in the day to focus on, and excel in, all of these important elements.
Based on the above, it’s clear that outsourcing your needs is a feasible solution for long-term success, however, the question is not always “why” but rather “who” to outsource to. With so many incredible outsourcing partners out there, it’s important that you find a company which can service the needs of your customers and add value to your unique business offerings.
Before you jump the gun and choose the first outsourcing company that piques your interest, you need to consider the following factors.
Analyse the resource quality
When you choose to outsource your services to a company, you need to look at their skills to determine whether or not they will be able to help you achieve the success you want and need. Make sure that you do your research to see the type of clients they work with or the projects they’ve worked on to ensure they’re able to handle the volume of questions, queries and customer needs your business has.
Choose according to the infrastructure you need
As a small business, most of the frustration of not being able to meet your customers’ needs is due to the lack of necessary infrastructure needed to perform particular tasks. For instance, artificial intelligence (AI), chatbot technology and more. Your chosen provider will also need to have the correct equipment and software to safeguard your information if the server is down or one of their machines become faulty. Customer service in today’s day and age is a constant service.
Your provider needs to be able to set up solutions to ensure that your customers will be assisted 24-hours a day.
Communication needs to meet your business needs
The company you choose to work with should have a clear understanding of your business needs, and they will need to be available for communication when you need it. Small businesses are testing the waters, and therefore should be able to change their approach in real-time if something isn’t working. If your partner is on-par with what you need for your business, together you will be able to succeed.
Flexibility in service offerings
As mentioned, your chosen partner needs to be flexible in their services in order to keep up with your customers’ ever-changing needs. Should your approach need to change, your outsourcing company should be able to guide you and provide insight that can help you achieve your goals. Reliability also goes hand-in-hand with flexibility, as your partner needs to work effectively to help your business thrive online.
Outsourcing cost versus delivery
Small business owners need to be careful not to over capitalise on their expenses, therefore it is advised that you shop around to find the most affordable, competitive price for your needs. Do your research on the market to see what other companies are offering in terms of costing and services. During this process, you need to ensure that you are not choosing the cheapest place and compromising on quality.
Weigh up your options and remember that this is a service that you are unable to provide due to time and skills.
With the right partner, the benefits of outsourcing are endless. They will have a positive impact on your reputation and your bottom line, which is why you cannot take this decision lightly. You will also need to choose according to the size of your business and your needs. For example, if your needs are to communicate with your customers across various online channels in a personalised manner, you will need to look for a company that is small enough to attend to the detail you expect. If you simply want to automate your customer needs, you will be able to consult with large companies with years of experience and the latest technology. The smaller your company choice, however, the smaller your financial risk.
In the beginning stages, it’s best to start with something small and work your way up according to your business growth and needs. The above-mentioned factors are crucial when wanting to boost profits and return on investment (ROI). Choose wisely and, together, you will take your business to new heights.
Simple Strategies For Financing Your Small Business
Below is some useful information on simple strategies to finance your small business.
So, you have found your passion and now want to start a small business? One of the first steps to fiscal success is to look for simple ways to finance your new venture. This might sound difficult and you might not know exactly where to start, but it can be done with the right know-how and tips.
You could start by looking for small business funding online. There is also the option of attracting an “angel investor” or crowdfunding, but if you are just starting out it is best to keep things simple. Below is some useful information on simple strategies to finance your small business.
Look for small business-specific loans
There are financial companies in South Africa that are geared specifically towards helping small businesses. They believe that small businesses are making a difference in the country and are building a better solution by striving for excellence. Simply put, these financial companies want to help you reach your goals of success.
You will have to meet certain criteria for some of these companies, such as having at least three of the most recent months of bank statements for the company to scrutinise. You will be scored according to the performance of your company, but if you are just starting out, the process will be slightly different. If you look for small business funding online, you will need to find out the stipulations, such as having been in business for at least a year, earning R500 000 annually and being based in South Africa.
Try out crowdfunding
Through crowdfunding sites such as Indiegogo or the South African version Candystick, you will have access to thousands of investors who could help fund your business. One of the benefits of crowdfunding is that many of the contributors are not necessarily interested in acquiring equity in your company but simply want to get their hands on your product.
You will need to ensure that your crowdfunding campaign will attract investors and contributors. An effective way to draw the attention of investors is to offer an incentive, such as sending the first 100 people to contribute funds a sample of the product you are planning to make in your small business.
Be sure to read all the terms and conditions to find out if you have to pay any fees to the crowdfunding website to join or maintain your campaign.
Run a pre-sale campaign
If you already have a product, you can run a pre-sale campaign to earn funds to finance your small business. This way, you can keep the entirety of the money you earn and use it to build your business and make more of your product for new and returning customers.
A pre-sale campaign means that you will sell prototypes or early versions of your product through a PR (public relations) campaign, attracting new customers and benefitting from the traffic that it will draw to your website. You might end up selling all of your prototype products, which is fantastic as this revenue will allow you to build more and improve your profits. Be sure that you have enough product for the sale or you could arrange an exclusive event for a select few customers before you the official release of your product.
Ask friends and family
This might not sound like the best idea, but asking friends and family to invest in your business can often lead to success. You could ask a close friend or a family member who supports your vision to provide a percentage of money to help fund your business, with strict plans in place to repay them with interest.
Before you approach anyone asking for a loan, you will need to have a sound business plan in place, as well as a legally drawn up contract stating how and when you plan to repay the loan. This will reduce the likelihood of unpleasant surprises and shows your investors that you take their money and trust seriously.
You will need to seriously consider how the arrangement will be structured. Are you offering them an investment in your small business or is it a loan? This will affect the repayment options as well as the risk involved for them.
Explore all options
As a small business, start by looking for small business funding online and for small business loans in South Africa, then move onto the more creative outlets. If you explore all of your options, you will soon find the perfect solution to build your small business.
The best way to start is with a small business loan, as this is the most reliable way to gain funding and use other ways as secondary sources when the time comes to grow your venture. Remember to have a business plan in place first before you apply for any loans, whether it is from friends, family or a financial institution.
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