Connect with us

Start-up Industry Specific

How Can I Start A Petrol And Diesel Transportation Business In South Africa?

The regulations of transporting petrol throughout South Africa.

Entrepreneur

Published

on

77-how-can-i-start-a-petrol-and-diesel-transporation-business-in-south-africa

The fuel industry in South Africa is a “closed” industry and it’s advisable to have contacts, or have worked in the industry, either for a fuel supplier or transport company before starting out on your own.

Transporting fuel isn’t as simple as it seems

Tanker transportation of petrol and diesel is a job which requires the application of specialised skills, so it’s important to have good knowledge regarding the operation of equipment and the regulations that apply.

“Many fuel companies, such as Sasol and Chevron have their own fleet of tankers which they use to transport fuel while others outsource,” explains Anton Moldon, Environmental advisor, South African Petroleum Industry Association (SAPIA).

“The entire process is very strictly controlled, even driver training is generally undertaken by the fuel companies,” says Moldon.

Regulations

The regulations are long, complex and apply to not just to the driver and the vehicle but also to safety.

Drivers

Drivers of vehicles transporting dangerous goods such as diesel and petrol require a category D professional driving permit. The minimum age for new drivers transporting dangerous goods is 25 years to ensure that only experienced drivers are transporting this flammable product.

Related: Steps for Registering Your Transport Business

Drivers of dangerous goods vehicles above 3 500 kg GVM are required to undergo training by a body approved by the National Department of Transport in order to obtain the certificate needed to qualify for a “D” category.

General duties

  • The driver has to be familiar with the route to be taken
  • The driver must carefully check the condition of the vehicle
  • All necessary documents must be kept in the vehicle.
  • Warning signs and warning devices to be displayed or stored in the vehicle,
  • Be sure that the vehicle has the correct type and number of fire extinguishers fitted to the vehicle
  • The vehicle must contain protective clothing

Learn the rules

The best way to understand the regulations that apply to the vehicle and to safety issues is to contact the SABS and buy the “Dangerous Goods Digest, The Orange Book of Southern Africa”.

Related: Government Funding Options for Transport Businesses

This loose-leaf system is all you’ll need to fully understand and comply with the Dangerous Goods Regulations and the various relevant SANS (SABS) Standards which you have to comply with in order to transport fuel. This can be ordered online.

Regulations

All the Standard specifications and codes of practice:

  • SABS 1398 “Road tank vehicles for petroleum-based flammable liquids”
  • SABS 1518 “Transportation of dangerous goods – design requirements for road tankers”
  • SABS 0228 “The identification and classification of dangerous substances and goods”
  • SABS 0229 “Packaging of dangerous goods for road and rail transportation in South Africa”
  • SABS 0230 “Transportation of dangerous goods – Inspection requirements for road vehicles”
  • SABS 0231 “Transportation of dangerous goods – Operational requirements for road vehicles”
  • SABS 0232-1 “Transportation of dangerous goods – Emergency information systems”, Part 1: “Emergency information system for road transportation”
  • SABS 0232-3 “Transportation of dangerous goods – Emergency information systems”, Part 3: “Emergency action codes”
  • SABS 0233 “Intermediate bulk containers for dangerous substances, all apply and are contained in the Dangerous Goods Digest.

Related: Business Plan Examples To Get You Going

What is more profitable to transport, petrol or diesel?

According to Marco Swanepoel of MS-SM Transport & Petroleum, it is more profitable to transport diesel as most of the petrol contracts are taken up. Petrol contracts are signed for a period of 12 – 60 months.

“In this industry “one hand washes the other” and anyone considering starting a business transporting petroleum products should come into the business with experience of working in it in order to have established contacts.

It is a very hard business to get established in. The lack of stability in the petrol and diesel price doesn’t make things any easier,” Swanepoel explains.

The national petroleum production system in South Africa

The intake stations for imported crude oil and diesel arrives at the two Durban refineries – the crude refinery at Coalbrook (Natref) and the Sasol 2 and Sasol 3 Plants at Secunda.

Related: How to Take Our the Right Insurance

Transnet

Transnet Pipelines’ network transports 100% of South Africa’s bulk petroleum products and handles an annual average throughput of 16 billion litres of liquid fuel. The liquid products include crude oil as well as diesel, leaded and unleaded petrol and aviation turbine fuels.

The liquid fuels network runs through the provinces of KwaZulu-Natal, Free State, Gauteng, North West and Mpumalanga.

Transnet Pipelines’ customers are all South Africa’s major fuel companies namely; BP, Caltex, Engen, Exel, Sasol Oil, Sasol Gas, Tepco, Shell and Total.

The government fixes the petrol price by zones to recognise the differences in costs associated with the transportation of petrol between various geographic areas, the country is divided into 50-plus pricing zones.

The transport sector is responsible for 74% of South Africa’s petroleum consumption and approximately 60% of imported crude oil is used for national petroleum production.

Related: How Does One Start a Petrol Station in South Africa?

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

Continue Reading
Advertisement
1 Comment

1 Comment

  1. thabo monyane

    Oct 23, 2014 at 16:03

    As a starter, how do I go about starting transportation of used petroleum in South Africa ( Rustenburg area)
    Hope to hear from you

    Regards

    Thabo Monyane
    0726808321
    thabo.monyane@vodamail.co.za

You must be logged in to post a comment Login

Leave a Reply

Start-up Industry Specific

Want To Start A Property Business That Buys Property And Rents It Out?

Information on starting a property renting business.

Shawn Theunissen

Published

on

18-how-to-start-a-property-business-that-buys-property-and-rents-it-out

Start your property rental business using this guide

I would like to start a property business where I purchase the properties and I rent it out, I already have a paid up property that I am renting out but my taxes are too high on the rental income so I am considering starting up a business. Could you advise me on where I can get more information on the requirements to start this and provide some guidance on whether it would be wise to pursue this business?

Before starting any business, it’s important that you’re absolutely clear about why you’re doing it – and that it’s going to be something that excites you, drives you and challenges you in the long-term.

If you’re only considering starting a property investment and management company to try and reduce your taxable income, then I don’t believe this is an appropriate – or a sustainable – solution.

Related: How The Property Brothers Built Up A Real-Estate And Entertainment Empire One Brick At A Time

You should rather consult a reputable financial adviser about other investment options that would better suit your personal needs.

If owning and managing properties is, however, an opportunity you would like to pursue, I would then recommend that you start off by equipping yourself with a proper understanding of what it actually means to be a landlord.

This will help you to make an informed decision about whether or not you want to start this (ad)venture as an entrepreneur. At a very basic level, here are some of the things you might want to consider to determine if this is the right business for you:

Initial cost

initial-cost-and-property

This is what you need to consider, cost wise, when you start up your business

You need to consider the initial cost that you will be incurring when setting up the business, especially since you have a property in your personal capacity.

You will need to transfer the property from your personal capacity into your business and pay transfer fees and transfer costs.

These costs will be calculated based on the current value of the property.

The work and planning

No matter whether you’re a residential or commercial landlord, property management requires a great deal of work and planning. Remember you will be responsible for all aspects of the property: From purchasing it to maintaining it on a day-to-day basis.

Related: Real Estate Business Plan Sample

This involves everything from transfer to managing the monthly utility bills, all the way through to replacing the geyser when it bursts and ensuring your tenants behave appropriately in the building. You would also need to source your tenants and ensure that they pay you on time.

All by yourself

business-owner-development

Starting your business alone? You need to know this

From a start-up perspective, you would probably need to do all of this yourself in the beginning. As such, you would need to work to build up your own database of reputable suppliers: Plumbers, electricians and handymen.

It’s important that you find experienced, qualified suppliers that you can trust, and who will be able to deliver on time and cost-effectively.

Related: Handyman Joshua Cox Of Trade-Mark On Thinking Like A Tech Start-Up

This can be a very time consuming process. Also consider that you would need to be on hand to facilitate all of this work: Arranging the call-out with the supplier and the tenant; overseeing the work delivered; paying the supplier etc.

Business owner development

Above and beyond that, you’re then going to need to develop yourself as a business owner. You will need to equip yourself with the skills and knowledge required to lead and manage this business in order to make it both sustainable and profitable.

This will require a significant investment from you: Time, effort and money. The more you commit to this journey of personal and professional development, the better your chances of success.

If you can picture yourself doing – and enjoying – all of the above, it’s then equally important to consider if this is a viable opportunity.

The greatest barrier to entry in this sector for you as an entrepreneur is probably going to be finance.

You need to be conscious of this from the outset.

  • Do you already have access to the funds you need to purchase the properties you are going to rent out?
  • If not, what are your plans to secure this funding? And what are the returns you are expecting?
  • Also consider the funding of the business itself. How will you finance this, especially during the first year?

My recommendation here is to take the time to do your homework – and the maths. While this could be a business opportunity, it might not be something that will be possible for you to do on your own.

Related: What You Need To Know To Become the Next Property Entrepreneur

If you have a feasible plan regarding the above, you then need to start working on developing a model for this business – as well as a strategy and plan. All of these will require research on your behalf: From reading Entrepreneur to accessing websites, possibly visiting walk-in centres etc.

This will include unpacking the actual opportunity itself – and determining if there really is a demand for your service offering.

Please note that the above are thinking or “trigger-points” – listed simply to give you an idea of some of the things you need to consider, as well as the mindset you will potentially need to adopt as an entrepreneur. Your response to them should give you a good sense of if this is the path you wish to walk.

Related: 9 Quotes Every Entrepreneur Should Live By

Remember that entrepreneurship is a journey – and every day on this road is a learning opportunity. If it is for you, embrace it whole-heartedly, don’t be afraid of failure and be sure to seek out the assistance available to you.

Continue Reading

Start-up Industry Specific

How do I start a placement agency?

A guide to starting a placement agency.

Entrepreneur

Published

on

109-how-do-i-start-a-placement-agency

The first step is to have a comprehensive business plan. Once you have decided on a name for your company, you have to register the business.

There is a governing body Association of Personnel Service Organisations (APSO) that acts as the governing body for the industry and provides credibility to the agency.

However, it’s costly to and complex to register with them. You don’t have to be a member of APSO to start a placement agency, but it is beneficial.

Related: Free Sample Business Plans

Seda (Small Business Development Agency) will be able to advise and guide you through this process and they do not charge for their help.

“As most of the staff that works for placement agencies are employed on a contract or temporary basis, you have to apply for an IRP30 through the South African Revenue Services.

The reason for this is so that the contractors that the agency places are safe-guarded and that PAYE and UIF are paid on their behalf,” explains Janine Lombard, director of ABC Resourcing.

Do your research

It is very important to understand and be familiar with the Labour Law of South Africa. Obviously you do not have to understand the entire act, but you must be aware of what minimum wages are, how to conduct hearings and dismissals and understand how to register for PAYE and UIF.

Choosing candidates

For a placement agency to be successful, an honest workforce is crucial. To achieve this you have to run screening and background checks on your candidates as you do not wish to compromise your reputation because you haven’t done your homework.

“It is a good idea to do a criminal and educational check and obtain references where possible. Companies such as Kroll can do this on your behalf, but you can do them yourself.

Even if the candidate has good references you must test their skills to ensure that they are competent”, says Lombard.

Minimum wage

Normal domestic workers minimum wages for those who work more than 48 hours a week:

  • Urban area: R6.88 per hour; R309 per week; R1340 per month
  • Rural area: R5.63 per hour; R253 per week; R1097 per month

Permanent placements

If you place staff on a permanent basis a fee is payable by the client when the worker starts.

Related: Hiring Your First Employees

It can be anything from 7% to 14% of annual salary plus VAT, covered by a three month warranty and you must have a set of terms and conditions which the employer must sign and accept.

Other responsibilities

If you are setting up a small office, the law is clear that in this kind of business you must have a separate interview room and a separate office.

Before you send a candidate to an interview, you must prepare a resumes and letter of introduction for the potential employer. You must draw up an employment contract for your candidates and or clients to sign.

The CCMA will be able to assist you in this regard.

Dealing with the client

Interview the client and find out exactly what they are looking for so that a comprehensive job specification can be gathered. From this you should be able to short list candidates that are suitable for the client.

Discuss and inform the client of your terms and conditions and make sure that you have an agreement in place that the client signs when accepting a candidate from your placement agency. In terms of the contract the successful candidate would be subject to a probationary period of up to 90 days.

The contract falls within the parameters of the Basic Conditions of Employment Act and clearly outlines all duties and obligations for both parties.

Preparing candidates for interviews

The responsibility of the owner is to set up appointments with prospective employers for candidates and finalising agreements between parties (employment contract). Prepare the candidate carefully for the interview.

Explain that they must be well spoken, polite, smartly dressed and guide them so they know the right questions to ask:

  • What time they start and finish work
  • Discuss tea breaks
  • How they should answer the telephone
  • What their duties and responsibilities are

Establishing a client base

Any new business has to be advertised and a marketing plan must be in place in order to attract business.

Take a small advertisement in the local newspaper offering your services, drop pamphlets from door to door in the area in which you intend to operate.

“In order to attract big contracts with large companies it is very important to have BEE accreditation.

This can be obtained through SEESA who offers clients professional, round the clock employment law support and representation in labour, BEE, skills development and facilitation and all employment matters”, advises Lombard.

Related: How 5 Businesses Built Up Their Client Bases

Continue Reading

Start-up Industry Specific

How do I start a travel agency?

A guide to starting out in the travel agency sector.

Entrepreneur

Published

on

91-how-do-i-start-a-travel-agency

World-wide, tourism is one of the fastest-growing industries; Looking back to 1950 approximately 25 million people travelled abroad worldwide. That figure grew to 700 million by 2001. The World Tourism Organisation predicts that this will increase to over one billion by 2010.

Related: Travel Tour Agency Sample Business Plan

The local travel industry has been boosted by a growing number of foreign tourists coming to South Africa each year and the FIFA 2010 World Cup is expected to boost the industry even more.

The retail travel agency business offers a variety of options. There are three sectors to this industry: retailers (travel agency), wholesalers (selling bulk product to retailers) and tour operators (handle group travel).

A retail travel agency sells everything from airline bookings, accommodation, guided tours, cruises, adventure holidays, car hire reservations and more to the public. One can also operate a home based agency or buy a franchise.

Traditional retail travel agencies

Traditional retail travel agencies are still an option but recent changes in the industry (airlines no longer pay commission to travel agents for booking flights) have seen a growth in home-based travel businesses mushrooming all over South Africa.

Related: Register A Company In South Africa

Many successful small agencies or home bases businesses focus on a particular area of the industry. Here are just some of the many sectors a small business can focus on:

  • Cruise holidays
  • Honeymoon packages
  • Snow skiing tours
  • Adventure trips
  • Eco tourism
  • Golfing holidays
  • Medical recuperation holidays
  • Spa Getaways
  • Luxury holidays
  • Business travel
  • Sports events
  • Airport/hotel transfers
  • Travel guides

Passport and visa services

“We are seeing more and more retailers opening, especially BEE agencies in the Eastern Cape, Limpopo and Mpumalanga and they are running good sound businesses,” says Robyn Christie, CEO of ASATA.

Related: 4 Tips To Secure Funding For Your Start-up

“From a travel prospective securing corporate business is very lucrative, but it is imperative that your business is seen as credible.”

What training is required?

If you plan to sell air tickets through a retail travel agency, then you will need the International Air Travel Association (IATA) Diploma. This has become the benchmark for the travel industry, and provides credibility to deal with airlines and other partners in the travel sector.

The diploma will give you a broad understanding of travel agency and airline operations, equip you to advise clients, make travel arrangements and reservations, calculate airfares, and complete international travel documents so that they comply with IATA rules and procedures.

The best route to take is to get the correct qualification to operate in this industry:

  • You will need to do the diploma at a recognised educational institution; have completed Grade 12 to be admitted to the course.
  • Tourism (N4 to N6) diploma and certificate courses are offered at a number of Further Education and Training (FET) colleges. Contact the FET College in your area and ask about their courses.

Travel and Tourism diploma courses are offered by universities.

Are there formal bodies that a travel agency must register with?

Airlines have moved away from a commission system, so travel agencies are essentially retail service providers who charge a mark-up fee for their professional services. Credibility is therefore become very important.

Credibility

Christie explains that The South African Association of Travel Agents (ASATA) is the regulator of the industry.

“Members are bound by the ASATA constitution. The national and international airlines and ASATA enjoy excellent co-operation and we are also very involved with the environmental aspect of the travel industry.”

Being part of the industry association such as ASATA will give your customers more confidence in your skills and your reliability.

Related: Start This Business With Zero Advertising Budget And No Need For Premises

And because of the strong influence ASATA has over the industry, potential customers will not consider you as a fly-by-night operation.

ASATA Members are engaged in travel business as either a retail travel agent or as a tour operator or wholesaler. Full ASATA Membership may only be obtained if your business has been operating for a period of one year or more.

In order to encourage membership of new travel businesses, Provisional

Membership may be obtained by start-up companies

Within the travel and tourism industry there are a number of organisations and associations that support small business to establish themselves.

They also regulate the industry and ensure that local tourism offers a professional and world-class service to tourists visiting South Africa.

When applying for finance, it’s advisable to have training or experience in the tourism industry or have a partner who does have the necessary experience. These organisations provide funding or funding advice to start-ups in the tourism industry.

 Funding

1. Tourism Enterprise Programme (TEP)
The TEP is a partnership between the Department of Environmental Affairs and Tourism and the Business Trust. This programme supports the growth of tourism SMMEs, often by establishing links between SMMEs and customers.

2. Business Partners
Business Partners supports entrepreneurs with regard to the buying of hotels, guesthouses, game lodges, starting or expanding a travel agency, tour operating business, tourist information centre, a curio shop or entertainment facilities for tourists.

3. IDC Tourism Fund
The IDC Tourism Fund aim is to establish good quality hotels in South Africa and the rest of Africa. It also covers other sectors such as cultural and heritage products, arts & crafts and business tourism.

It supports BEE projects with significant development impact in townships and rural areas while adhering to the Tourism BEE Charter requirements.

It also aims to increase participation in projects related to the 2010 FIFA Soccer World Cup.

4. Khula Credit Indemnity Scheme     

The Khula Credit Indemnity Scheme fund helps entrepreneurs who wish to start or expand small to medium sized businesses but do not have collateral/security qualify through traditional financing institutions such as banks.

Related: (Infographic) The 20 Most Common Reasons Start-ups Fail And How To Avoid Them

The Scheme is open to all race groups; however the fund focuses on Black (African, Indian and Coloured) and female entrepreneurs. All the major banks, such as FNB, Standard Bank, Absa and Nedbank can provide more information.

Is a website necessary for a travel agency?

Consumers are using the Internet more and more to search for travel options and to make bookings. It’s vital that you have a website that attracts customers.

It might be too expensive to build and maintain a site where visitors can make bookings and payments online, but you can at least develop a site with information about what travel options you offer and what special deals are available.

This information can prompt a consumer to contact you by phone or email to make a booking. Beware the virtual world of travel is a highly contested one and ensuring that your website has an online presence will require a large investment.

Search Engine Optimization and online advertising using a medium such as Google Adwords will pay off, but do your research first to ascertain whether you are willing to invest the time and money.

Travel Agency Franchises

If you go the franchise route you will be your own boss and own your own business, but have the professional support of one of an experienced and respected franchisor, such as Harvey World Travel, not just for travel knowledge, but with business practice and financing. FASA is the Franchise Association of Southern Africa.

Related: BrightRock’s 5 Entrepreneurial Tips For Start-ups

Franchising is universally accepted as one of the most successful business formats. FASA, therefore, defines how to franchise and ensures that all parties follow internationally accepted franchise business principles

Tourism support and resources

These associations can provide useful information with regard to marketing and promoting an enterprise in the tourism industry

1. Fair Trade in Tourism South Africa (FTTSA)
Their aim is to facilitate access to tourism markets for disadvantaged tourism enterprises.
Visit FTTSA’s website for more information.

2. Southern Africa Tourism Services Association (SATSA)

SATSA represents major role players including airlines, coach operators, tour operators, accommodation establishments, car-hire companies and more.

3. Tourism Grading Council of South Africa (TGCSA)
TGCSA is responsible for the star grading system to ensure improvement and high standards across all areas of the tourism industry. If you wish to get your B&B graded, you would have to contact the TGCSA.

Related: Why You Shouldn’t Quit Your Job To Start A Business

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending