When employing staff, what are the key principles to be included in their contracts – i.e. apart from the standard terms and conditions is there anything that is sometimes not included that comes back to haunt business owners especially as they expand?
It is important that the employment relationship is flexible enough to ensure that it can meet the changing needs of a business.
In this regard it is useful to include provisions in the employment contract that make it clear that the requirements of an employee’s position may change over time. This avoids the situation where employees try and argue that a particular task does not fall within their job description.
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The same applies in respect of relocation to other branches or even geographical areas. The agreement should also provide that the employee agrees to work overtime as and when required.
Where the employer has policies and procedures in place, it should also be recorded in the employment contract that these are subject to change at the discretion of the employer.
Without this flexibility it often happens that employers become the victims of their own unworkable policies and procedures which they cannot change without the consent of the employee.
The same flexible approach should be adopted when dealing with salary increases and bonuses. These should be at the discretion of the employer because as the business grows and more employees are recruited, they will expect similar benefits.
The end result is that what often started out as a well-intended gesture from an employer towards one or two employees, becomes an expensive obligation which can have an impact on cash flow and profitability.
With the necessary flexibility built into the contract employees can still be rewarded for their contribution, but in a manner that is sustainable for the business.
What are the contractual differences (even if only in time) and/or differences in obligation between casual and part-time employees? And, in turn, between casual/part-time and full-time employees? Is it a good strategy when expanding to rather employ casual/part-time staff?
While the term ‘casual employee’ is commonly used, the term actually no longer has any basis in law. In practice, however, the term refers to temporary employees who are employed on an ad hoc basis.
A part time employee is an employee who is paid in relation to the time that he has worked and who works fewer hours than a full-time employee. A part-time employee can be employed on a fixed-term or permanent contract.
Our labour law has recently been amended with one of the main aims being to protect employees who are not employed on a full-time or permanent basis.
As a result a part-time employee may not be treated less favourably than a full-time employee doing the same or similar work, unless there is a justifiable reason for doing so.
It is not advisable to try and build a business using employees who are not employed on a permanent basis. These employees now have sufficient grounds to challenge the employer when it comes to remuneration and benefits and, in appropriate circumstances, to claim permanent employment.
Can employment contracts be watertight when it comes to confidentiality or is it difficult to truly protect my IP?
While an employer does have the right to protect its IP, there is no such thing as a watertight contract.
The effectiveness of the provisions dealing with confidentiality will depend on how it has been drafted and the facts of any specific breach.
In order to try and prevent and limit the disclosure of confidential information the company should make it clear in the employment contract that it reserves the right to monitor, intercept and review its employees’ use of the company’s IT resources and communication systems.
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What can I do contractually to protect my firm around theft/fraud?
This is not really something which is normally done through the employment contract. However, depending on the industry in which the employer operates, the contract may provide for random searches of employees or that background checks may be performed from time to time. Of course, all of this needs to take place without violating an employee’s right to privacy and dignity.
Outside of the employment contact, employers should ensure that they have appropriate systems in place to detect this type of behaviour and that employees are disciplined accordingly.
The normal sanction for such conduct is dismissal. The matter should also be reported to the police so that criminal proceedings can be instituted against the employees.
How do I protect my firm around social media and the use of it in direct relation to the firm – is this now standard in employment contracts?
Given the extent to which social media is now part of everyday life, employers are increasingly seeking to regulate its use in the workplace.
This can be done through a Social Media Policy which stipulates the circumstances in which social media can be used, if at all, and which at the same time ensures that the company’s IP and confidential information is protected.
The policy should also provide for disciplinary action to be taken in the event of a breach of the policy.
The company should also reserve the right in the policy, or employment contract, to monitor, intercept and review, without further notice, an employee’s use of the company’s IT resources and communications systems, including but not limited to social media postings and activities.
Free Payslip And Contract Of Employment Template Download
Download your free payslip and contract of employment here to get you started in the right direction.
In your downloads you will find the following resources below:
1. A free payslip template with formula on how to calculate tax (PAYE), UIF, etc for a start-up business.
2. A standard contract of employment (template) that complies with all the relevant laws.
The payslip template is merely an example and should you need to have anything checked in terms of your remuneration structure, we can put them in contact with our remuneration specialists in Johannesburg, Tax Consulting.
When launching your business you don’t want to be blindsided by the little but impactful costs, like PAYE or UIF. Ensure you have everything covered by using this payslip template.
Similarly, the permanent contract of employment should be read carefully and changes should be made in line with the offer of employment and the company policies and procedures. Please note the template provided is for a permanent placement.
When employing staff you should ensure the contract is legal and legally binding. Customise this contract of employment to suit your business and what you can offer your employees.
What steps do I need to take to start manufacturing toilet paper?
This comprehensive guide takes you through everything you need to know to start a toilet paper business.
The business of producing toilet paper has been recognised as one of the fastest developing assembling commercial initiatives in Africa.
Toilet paper is used in our homes, work places, schools, hotels, restaurants, shops, maternity homes, hospitals, churches, clubs and many others. It can be used in various other ways such as cleaning up messes and decoration.
The difference between toilet paper and other tissues is that it is created to breakdown in septic tanks and other tissues don’t necessarily do this.
To start and run a business, it is not enough just to have a good, viable idea. You also need to have the right skills, attitude and personality to make the enterprise succeed.
Benefits of starting a toilet paper production business
- It has a simple production procedures
- There are not many product offerings or varieties
- Simple organisational involved
- High interest on the product
- Easy to market
- Product is a primary necessity in society.
Possible challenges of starting a toilet paper production business
- The biggest constraint will be the insufficient amount of planted trees. This will affect you as this is where you will harvest your raw materials from. This can result in a reduction of plantation productivity. According to the Paper Manufacturers Association of South Africa 60% of all plantation trees are planted and grown especially for pulp and paper production.
- You will need to apply for water permits to meet the terms of the regulatory framework managing water usage. This is a long and difficult process and can limit you from achieving profitable operations.
- Transport, labour and licence costs will have a negative impact on your ability to competitively trade. You will need to apply cost control measures to remain competitive.
Did you know?
- In an average public bathroom, it takes 71 separate visits to finish a single roll of toilet paper.
Financing your venture
It’s most likely that you will need finance when setting up a toilet roll production business. The toilet roll production equipment is available in South Africa and ranges for a single machine from R175 000 for the bottom end of the range model to R500 000 for a fully automated machine.
Manufacturing plants are also very large in size which means financing it will be quite expensive. You should use your capital to purchase the equipment you’ll need.
Try and save money by buying economical but high quality equipment. Once you have all your equipment find a premise that will accommodate all of it. Once that is completed then contact stores and potential clients.
You can save money by renting or buying an inexpensive lot for your toilet paper business. You could even start in a smaller building and when you have increased your funds, upgrade your facilities into a bigger space. Make sure to take all of the costs into account when trying to finance your toilet paper business.
You’ll have to include raw material required to make the rolls. These are supplied in jumbo tissue rolls and cost from R6 600 per ton. You will also have to take into account staff.
Zhauns, a supplier of business opportunity machinery supports BEE by offering a variety of empowering programs for street vendors, unemployed and disadvantaged groups through consortiums, local and international joint ventures and has financial links which assist entrepreneurs in need of funding.
A start-up would need two-five people operate a small business of this kind. It takes about three months to set up the business and to properly train staff to operate machinery”. Zhauns offer free training when they install equipment purchased through them.
Planning is always your starting point when starting a new business. There are several techniques you can use for your planning process. You can use ready and existing techniques and plans or you can use innovative techniques which will make your toilet paper business more unique.
Focus on the specifics of what you will need for your toilet paper business such as equipment, employees, property and raw materials. Making errors during the planning phase is normal. After your plan is finalised it should be flexible enough that you can add changes.
In this industry you are not just competing with local manufacturers. When you become a toilet paper business owner you have to figure out how you’re going to compete with different international manufacturers.
Speak to owners of similar businesses
The best source of information you can find about an area of business, is other toilet paper business owners. They will tell you in practical terms whether your ideas are feasible or not.
To locate similar businesses which can give you advice on any aspect of their toilet paper business, contact your local Chamber of Commerce. Shereen Crowie of Curviro Trading says: “It’s a commodity with no age restriction and no seasonal production demands.”
For support and guidance
If you are going to be a toilet paper business owner you need to have business skills, even more so than technical skills about your product or service. This means you have to understand finance.
You need to know how much your idea is going to cost you, whether it will make enough money to pay back these costs and make enough in addition to satisfy your requirements.
The DTI (Department of Trade and Industry) recognises that support in the form of advice from specialist organisations is vital and the offer support groups to SME businesses.
One such arm is Khula Enterprise Finance which is a wholesale finance institution that has well-developed ties in the public and private sectors.
Through these channels – which include commercial banks, retail financial institutions, specialist funds and joint ventures they play an effective role in order to bridge finance gaps that are not addressed by commercial financial institutions in the small business sector.
Did you know?
- People use on average 8.6 sheets per trip, which is a total of 57 sheets per day. That’s an annual total of 20,805 sheets.
It is recommended to get training when joining the toilet paper business industry. There are many essential practical skills which you will need when starting a toilet paper business.
There are courses offered by universities which will help improve your skills and understanding of the technology involved. You can alternatively get training from current experts in this field.
You can apply for internships at factories and get first-hand experience. If this is your plan of action make sure to take very detailed notes about all the process involved.
Draw up a business plan
Business plans are essential for businesses from when they start out to years later when your businesses has evolved and improved.
It becomes a guide for you and your employees to track whether your business has gone off course from the core of quality production. Experts can be hired to help you draw up a toilet paper business plan for a fee.
Business plans can be used to organise everything from your marketing strategy to the strengths and weaknesses of your business.
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It will help your toilet paper business keep clear objectives as well as making your priorities recognisable. Milestones recorded in your toilet paper business plan will help you follow your progress.
Choose a good location in an industrial area for your toilet paper business. It’s recommended that you get a realtor, since they are the experts in their field.
They will advise you on which buildings are better for your toilet paper business and which ones would be unsuitable.
Make enough time to view each property before purchasing or renting it. Your toilet paper business can’t be in a residential area.
Types of Machinery
You will need to buy or rent the necessary equipment with the finances you have. Some of the machinery that you need to get going with your toilet paper business is:
- Core making cutting machine – This produces the brown cardboard core that the tissue is wrapped around.
- Jumbo reel winding machine– This winds the tissue paper from the jumbo reels to the cardboard core. It will automatically stop at a programmed size.
- Embossment attachments or embossing machines – Embossments are the prints on the surface of the tissue and the tissue roll can either be plain or embossed.
- Band saw cutting machine – this cuts the paper into the right side.
- Other machinery requirements:
- Generator for power outages
- Auxiliary equipment
- Transportation – its optional but can be essential.
This type of business will require trained employees. It would be a definite advantage if you hired experienced operators or people experienced in similar industries.
This will allow you to hit the ground running instead of slowly training your staff from scratch.
Hiring inexperienced people can also cause a decline in the quality of your production as well as a decline in the level of your toilet paper businesses productivity.
Once production has started you will need to come up with various ways of distributing your product.
Since your brand is new, you will most likely have to do a demanding marketing drive so that customers know who you are.
Customers won’t buy your brand if they don’t know who you are. Advertising consultants can help your toilet paper business with effective strategies which will help increase sales.
Which works better buying machinery first or getting orders before buying equipment?
Look at your market before spending the money. It is good business practice to establish if there is a market for your product before buying expensive equipment. For this reason, it is vital to do research and to prepare a business plan.
Renting manufacturing equipment for this purpose may be a solution. Once the toilet paper business is up and running you can then consider buying your own machines.
Buying outright can result in a huge drain on cash in the first year of your toilet paper business.
Did you know?
- In South Africa a family of four uses approximately one toilet roll every 1.5 days
Example of innovative thinking
Chandaria Industries operates out of Kenya and Tanzania. They sell their products in 15 African countries.
What sets them apart from their competitors is they make their recycled toilet paper from used paper.
What innovative thinking does for them, their communities and their country:
- They are making money from recycling
- They are transforming waste into a necessity
- They are now a source of national wealth
- They provide employment for many thousands of people
Just the used paper recycling activities creates nearly 20 000 jobs. By doing this they have saved over 30 million trees since they started in 1964. They still have more room to grow, saying that they don’t get as much used paper as they need.
Toilet paper will always be a necessity in people’s lives. Where your toilet paper business can grow to:
- Custom toilet paper – creating toilet paper with personalised images or custom images
- Various sizes – You could expand your toilet paper business into various other toilet paper sizes and thicknesses
- Various tissue paper opportunities – You can expand your business into the tissue paper manufacturing business
Paper Manufacturers Association of South Africa (Pamsa) executive director, Jane Molony says that the pulp and paper industry’s is continuing to grow and make profits because of their energy-saving initiatives.
Molony also says that the value of the pulp and paper industry (excluding forests and recycling) in 2014 was around R27.8 billion.
Tissue paper achieved a yearly turnover of R2.5 billion in 2014 which is a yearly growth of 2.7% since 2009.
This industry has large growth potential and is a great business opportunity. Toilet paper has become a basic need all across the world. It can’t be recycled so there is always need for more.
Every single person on the planet uses it on a daily basis. Why shouldn’t you be the one making it and selling it to them?
Related: Free SWOT Analysis Template
What should I know before registering a holding company and how do I go about doing it?
Holding company pros and cons.
What is a Holding Company?
A holding company is one that owns at least 50% of the companies companies’ stock. It is a company that doesn’t trade but only has one purpose which is to own shares in other companies.
Under what circumstances would one need to register a Holding Company?
A holding company is a firm that owns other companies’ outstanding stock. It usually refers to a company which does not produce goods or services itself.
Its only purpose is owning shares of other companies.
From a financial point of view, it is usually possible to obtain control of another company with less investment than would be required in a merger or consolidation.
However, the decision on how to split companies depends on the industries in which you operate the shareholding structures, risk profiles and many other issues that will be specific to your situation. This is why professional help is highly recommended.
What are the Pros and Cons of a Holding Company?
- The shares of stock in the subsidiary company are held as assets on the books of the parent company and can be used as collateral for additional debt financing.
- Holding companies and their subsidiaries are considered separate legal entities, so that the assets of the parent company and the individual subsidiaries are protected against creditors’ claims against one of the subsidiaries.
- Each subsidiary retains its own management team, and the subsidiaries become responsible to the parent company on a profit and loss basis.
- The law sees a company as separate from its shareholders and directors. This means that in a CC, the assets and debts of the business belong to the company and the assets and debts of the shareholders and directors have nothing to do with the Company.
- Companies have to obey all the rules of the Companies Act, which is a long and complicated law.
- A company has to keep detailed records. A professional organisation is needed to help explain which records must be kept.
- It is difficult to terminate a company. A lawyer’s help is needed.
What legal entity must one register for a Holding Company?
The best route is to register as a (Pty) Ltd. This is a limited liability entity and the registration process of a (Pty) Ltd is very cumbersome and professional help is almost always sought.
A Close Corporation can also hold shares in a company and can become the holding corporation in a group of companies.
How do you go about registering a Holding Company?
To register a holding company you need to consult an attorney in order to lodge proper compiled documentation at CIPRO in Pretoria. The Shelf Co Warehouse registers most Companies and Close Corporations in South Africa.
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