The Ins and Outs of Running a Laundry Business
Many entrepreneurs, who open a laundrette, have little or no prior formal training in the laundry business. Most simply run the numbers and decide that starting a laundry equals a good business opportunity. However, as is the case with any business venture, it is recommended that entrepreneurs conduct thorough research into the industry by talking to laundry owners and reading trade literature.
While formal experience may not be necessary, a background in machine repair or a knack for fixing machines helps. Owners who have experience with laundry equipment are able to cut down on the cost of repairs.
But others have found that they can learn about the machines and make some repairs themselves, or hire a maintenance person and avoid the headache altogether.
In addition and fundamental to successfully running any business is a solid understanding of financial, sales, marketing and management principles.
“You must have some kind of business background in order to run a business. You need to know how to keep records of transactions, salaries, expenses as well as the cash coming in”, says Tracey Lehmbeck, who has worked in the laundry industry for the last ten years.
13. The Laundromat Personality
You many think that the laundry business is about clothes, but what it’s really about is people. It’s a service business, and like any service business, you need to treat your customers well if you want them to return to your shop.
Related: Free Business Plan Template Download
If you are friendly, your customers will want to use your store. By taking the time to talk to them, you will also be able to learn about their laundry needs and preferences for services. Ultimately, this kind of information will help you improve the quality of your business so that you can attract even more customers.
Even if you decide to hire employees and leave the customer relations to them, you still need good people skills to hire and supervise employees. The more closely you work with them the better they know and like you, the better job they’ll do.
If you have an unattended laundry that you visit twice a day to clean and collect coins from the machines, you still need to greet customers with a smile on your face and an attitude that’s ready to help.
So if small talk with strangers leaves you cold, you can’t stand the thought of answering customers’ questions (often the same ones over and over), the laundry business may not be the one for you.
However, if you think you’ll like meeting new people, helping them work the machines, and listening to them talk while they wait for dryers to finish, you’ll find this business rewarding. Lehmbeck believes customer interaction is very important.
“If you get to know your customers, it’s offers huge spin-offs. My staff is on a first name basis with many of our customers, and I put this down to good customer service!
Word-of-mouth is the best advertising you can get, if the message is positive…and the most destructive if service is poor. In reality this business is not just about laundry as much as it is about offering brilliant customer service.”
What are the day-to-day operations involved in running a laundry business
So what’s it really like to own a laundry business? Whether you do all the work yourself or hire someone to run it for you, there are tasks you will need to take care of on a daily basis.
You will need to open and close your shop promptly each day, clean it, collect money and fill vending and change machines. You will need to keep track of which machines are being used and how often.
Those laundry owners who have employees will have other duties, too.
They will be hiring and supervising those employees and overseeing additional services such as wash-and-fold or ironing.
Laundries are generally open between 7am and 6pm seven days per week. Because weekends are usually the business days for laundries, you should definitely keep your doors open on a Saturday and perhaps even on Sundays.
In some instances, you many want to adopt alternate hours, especially if the market you serve or the location of the laundry lends itself to having its doors open at other times of the day.
If you own an unattended coin operated laundry in an area that is close to a university, college, gym or business district you could operate on extended hours because students and some executives are notorious for keeping odd hours.
Your first duty of the day is open your laundry, and you must be on time because customers may plan their day around getting their laundry done at a certain time.
In South Africa most drop-off laundromats close at 6pm. “They are more popular than coin operated self-service laundromats”, says laundry business owner, Tracey Lehmbeck.
The coin operated Laundromats can close later than drop-off laundries, sometimes as late as 10pm, but you should consider locking the door at 8.30pm, leaving enough time for the last loads of laundry to be finished.
You can either let the customers out yourself or install a lock system that allows them to leave, but prevents others from coming inside.
12. Running the Store
The first order of business is for you or staff to clean your store thoroughly, at least once a day. This will take about two to three hours a day. You or your employee will need to do the following:
- Mop the floors
- Wide down the machines
- Clean the soap dispensers in your front-load washers
- Wash off the folding tables
- Clean the restroom
- Empty rubbish bins
- Wash the windows
The best time to clean is after customers have gone – that way you or your staff can clean more efficiently.
You’ll also avoid the risk of customers slipping on wet floors or tripping over cleaning equipment. If you have a large or busy laundry, you may find that it requires cleaning twice a day.
You can wipe down the machines and folding tables easily while customers are in the store, but save the floor for after they’ve left or for a quiet period of the day.
One chore you’re not likely to delegate to an employee to collecting money from coin operated machines. You’ll need to empty each machine, preferably daily. You’ll want to pull (take out the coins) from one type of machine at a time so you can determine how often your customers are using each type of machine, starting with the top-loaders.
Count these coins and record how much money you made on this type of machine, follow the same procedure with the front-loaders and the dryers.
For recording purposes, you should draw up a chart with seven rows, one for each day of the week, and columns for each type and size of equipment: top-loaders, front-loaders, dryers and vending machines. Then record on the chart how much money you withdrew every day.
Stocking vending machines
The last bit of daily business in the shop is restocking the vending machines. If you rent a cold drink and snack vending machine, make sure it is full every day. In South Africa, the location of the laundry plays a vital part in whether or not you would have vending machines in the shop.
“It all depends on the retail set up of the businesses that operate in the centre or close vicinity of your laundry. You don’t want to encroach on other businesses, especially if you operate a coin operated laundry.
If there is a supermarket near the shop, you don’t need to sell washing powder or softener. Coffee shops and video stores in the centre eliminate the need for a vending machines of this nature in the shop’, says Lehmbeck who speaks from personal experience as she also owns Laundry XACTIX in Randburg.
Bookkeeping & Management
When you’re done with daily in-shop duties, you’ll need to take care of some additional office work. Many laundry owners do this at home, though some may find it easier to work at the laundromat if there is enough space for a small office or work area.
You’ll need to take care of accounting and track equipment usage by customers who frequent the laundry. It is important to record how often each type of machine is used so that you can determine if you’ve got the right mix of equipment.
For example, if you find that front-loaders are getting six turns a day (the number of times a machine is used each day) and your top-loaders only two, you may need to add front-loaders and remove some top-loaders. Your customers are likely waiting for front-loaders and possibly going elsewhere, so you could be losing money.
The last thing you need is unwanted expenses, which is why it’s so important to cover all your bases right at the beginning. When you write your business plan and develop your model, you need to start thinking about the extras you’ll need to get your dream business up and running. This can be anything from the premises and equipment to the specific staff that you’ll need to hire.
11. The Costs
How much does it cost to set up a Laundromat?
The cost of setting up a laundry business depends on many factors and you will have to conduct your own research to determine how much money you will need to raise.
There are various suppliers around the country that will be able to give you quotes on buying new or reconditioned machines.
You could also consider leasing the equipment. The needs will be based on the size of the laundry as well as the kind of services you intend to offer.
Speed Queen has supplied the commercial laundry industry for many years throughout South Africa. Contact Speed Queen and these suppliers for price details:
- Laundry Equipment Service
- Cater Zone
- Laundry Online
Contact Laundromat owners and ask them what the going salary rate is for staff. There are also franchises available in South Africa, such as Fresh Laundry, a new domestic laundry franchise. It will also be able to give you the information you require. Click on the Entrepreneur franchise directory for details.
How much money can be made owning a laundry?
The amount of money you can make from a laundry varies tremendously. If you’re planning on operating just one or two laundries, you’ll be in good company. Three quarters of laundry owners own only one shop, and very few have more than two.“There are a few local chains starting to grow in various parts of the country, but 99% are privately owned”.
A little more than half of laundry owners operate their business full-time. Others take the moonlighting approach – they manage other businesses or work a day job. But more laundry owners are starting to own larger shops and more than one.
These people are able to survive on the income larger stores or multiple stores generate.“It is a good, steady cash income”, explains Lehmbeck. The steady income that a laundry generates is a plus for many people.
If you’re looking for a business that will keep cash flowing no matter what the rest of the economy is doing, you’ve found it in laundries. Clean clothes are a necessity, not a luxury, so people are going to Laundromats no matter how the stock market is performing.
The business is fairly steady, month in and month out.
10. Using your Space
How much space is needed to operate a retail laundry and dry cleaner?
First determine the services you wish to offer, then work out how much space you will require to cater for those.
Related: Space Maximised
There is no ‘prescribed’ minimum space for a laundry and dry cleaning business. You will need to first determine the services you wish to offer, then work out how much space you will require to cater for those.
- If you wish to offer ironing as a service, you must calculate how many employees you are likely to have at any one time, and how much space they will require. Where will the clothing bundles be stored?
- Will you offer coin-operated machines and if so how many? What are the sizes of these machines?
- Will you offer a seating area for customers who wish to wait for their washing?
- Do you intend you having vending machines in store? These take additional floor space
- Where will you conduct the management of the business – the space you will manage the books and overall management? How big will this office be?
- Also, consider potential for future growth
What to look out for when buying an existing laundry business?
Six issues to consider before buying a laundry going concern.
If you are considering buying an existing business there are various issues you must look into:
- The books must be right, remember a laundry is a cash business
- Check warranties and the service history of the machines carefully
- How well known is the laundry and how good was the previous reputation of the Laundromat
- How strong is the existing customer base?
- Is there scope to attract more customers?
- Screen the staff who work at the laundry and make sure you are happy with them because good staff makes a business successful and bad staff will destroy it. After all a Laundromat is a service industry and if service and good work are not offered, customers will quickly move to a laundry that does offer excellent service
How to start a laundry business from a retail centre
Like things neat and clean? Then starting a coin-operated laundry might be your ticket to entrepreneurial success.
Internationally, the coin operated laundry industry has undergone a revolution. No longer are dingy, unsafe, boring places that customers must endure on a weekly basis, laundromats becoming fun and attractive multiservice centres that customers enjoy visiting.
“You don’t need experience, but you need training in order to operate machines and keep them running at their best”, explains Tracey Lehmbeck, who has worked in the laundry industry for the last ten years.
She is a sales consultant for Lead Laundry & Catering a large suppler of commercial and industrial laundry equipment and has her own laundry in Northwold, Johannesburg.
Newer laundries are located close to coffee shops or supermarkets. Some offer a service where customers can leave laundry which is washed and ironed and pick up dry cleaning.
Many laundry owners also employ full time staff to keep an eye on the shop, help customers use the equipment and do ironing.
9. Coin Operated
The coin operated laundry industry is changing in response to several trends currently impacting the business. The first is that, for most of us, meeting the demands of work and our personal lives leads to a time crunch – there just aren’t enough hours in the day to accomplish everything we would like to.
Laundry owners are capitalising on this reality by offering their customers time-saving convenience in the form of wash-and fold (drop off service) and a dry-cleaning service. Many laundromats take on contract work from guesthouses, restaurants, coffee shops and factories where uniforms need to be laundered.
In addition, owners have realised that they can maximise their profits by providing customers with access to multiple services. Since they’re paying a set amount of rent on their commercial space, they might as well use that space to its fullest potential.
Many owners around the country offer a variety of other related services. Because many new laundries are bigger now than they were in the past – overheads are higher, and owners are looking for ways to cover the cost.
These additional services demand little increase in overhead because the rent is already paid for. Customers benefit by being able to use several services all in one convenient locations.
8. Additional Services
South African Laundromats offer a variety of other services which generate more business for them:
- Shoe repairs
- Dying service
- Heavy load laundry such as curtains and duvets
- Some offer ‘Spotting Stations’ which offer a professional stain removal service
Another trend laundry owners have recognised is that customers prefer to visit laundries with a more pleasant atmosphere.
Many laundry owners offer coffee, keep a supply of detergents and hire staff that is friendly and helpful.
7. Being the Best
Other social phenomena, like the prevalence of two-income families, suggest that convenient services such as wash, dry and iron will continue to grow in popularity as working parents have less time to attend to household chores like laundry.
In addition, office dress codes are growing increasingly less formal. And as more people wear casual clothing, (which don’t require dry cleaning) to work and leave the nicer outfits for special occasions, you may find that consumers will be making more trips to the Laundromat.
Although economic growth and property development has slowed in recent months, room for growth in this industry in South Africa remains – particularly in suburbs that are experiencing population growth. “There is room for growth in this industry, especially in developing areas, explains Lehmbeck.
“I should know, besides selling equipment, I help to install and teach owners how to get the best out of their equipment. So, I am in touch with what is going on in the laundry industry.”
Competing for the ‘Mature Market’
When it comes to established areas, new laundry business incumbents enter the industry by purchasing an existing laundry business and renovating it.
Some also find that they can build a new laundry in an area with competing laundries and thrive by offering a bigger shop and more services such as an in-house tailor and better customer relations.
So, as you consider getting into the laundry business, keep the words, ‘mature market’ in mind. Don’t buy a store just because it’s for sale or build a new laundry just because you have a great idea for a new gimmick.
You’ll need to be very careful to make sure there’s enough of a customer base to make your business thrive.
You may be able to draw a little extra business from people who like using your store better because of its cleanliness and because they use your wash-and-fold or ironing service, but the core of your business will be clients who just want to get their laundry done quickly and conveniently.
If there are already enough Laundromats in the neighbourhood to serve their needs, they’re not as likely to patronise your laundry.
Many start-up businesses, base themselves from home until they grow big enough to afford a premise. But what about living your big dreams through a growing business and still choosing to keep your business based at home for lifestyle reasons? What about a work-from-home business where you can still hire staff?
6. Home Based
How to run a laundry from home
Offering a service where customers can leave laundry so that it can be washed and ironed, can be a good source of income.
This is because the prevalence of two-income families, suggest that convenient services such as wash, dry and iron will grow in popularity as working parents have less time to attend to household chores like laundry.
Do careful research before you start
You will have to decide how you will market your home laundry business. Research is vital. Canvas the area in which you will be operating the home business in order to determine if there is a need. Check if there are laundries near you and if there are, be sure you can offer better value and service.
Target the market
Decide how you are going to target the market that you believe will make use of the service you intend to offer. Prepare a business plan. This will ensure that you cover everything and have a plan to follow.
For the business plan, work out what equipment you will need. This might include washing, dryers, folding tables, irons and ironing boards and in time, even dry cleaning equipment.
As you are operating from home, make sure that you have enough space. Equipment, unwashed clothes and washed clothes will take up space. The location of your laundry business should have adequate space to house all the necessary materials and collaterals.
Another major consideration is are you simply going to wash and fold laundry or are you offering to include ironing as part of your services? This is an important point because ironing takes so much more time and needs to be factored into your rate schedule and your business plan.
A major key to success in this type of home based business is scheduling. Taking on ironing as part of the project will definitely be a drag on the quantity of work you can do and prices should be gauged accordingly.
Using the electronic media
Consider setting up online appointments – customers can make appointments to have their laundry picked up and dropped off. If you don’t want to run a collection service you can still use SMS’s to provide automatic alerts when the laundry is ready for collection.
Some clients may want to use a credit or debt card to pay for the services that they have purchased from you. It is important that you are able to transact this way. Contact your bank for details and the costs involved in operating debt and credit cards.
Making sure that the assets of your business are properly insured is something that every emerging or already established company needs to do in order to ensure success in the long run.
Not having the assets of your business such as vehicles, equipment and insurance cover for the clothing left in your care can leave your business vulnerable to loss due to crime or unforeseen disasters.
Plan for breakdowns
As you are running a service business, so you need a back-up plan if you washing machine, dryers or irons breakdown. You’ll also need to factor in time to take care of accounting and track equipment, water and power usage so that you can be sure that you are charging the correct amount and not running at a loss.
4. Legal issues
If you are going to employ staff then you must register them with UIF and SARS. You should also notify your local council that you are running a small business from home as there maybe zoning regulations that you would have to take care of.
If you plan on running a home-based business that will have no employees and no walk-in trade, the zoning question may never arise. If employees or customers are coming and going, making noise, or taking up parking spaces that would normally be used by residents, you can expect neighbours to complain and report you to the municipality.
3. How to attract more customers to the laundry
Consider giving your laundry a theme or gimmick. For example, in the United States one Laundromat plays classic black-and-white movies on their TV, and other walls are covered with photographs of movie stars from the 1920’s and 1930’s.
Another store displays the owner’s collection of antique laundry equipment. A theme gives your laundry more personality; customers will remember it, and they’ll find your laundry a more interesting place to come to. A clever gimmick may also get you some free publicity from the local press.
If you want to create a gimmick for your Laundromat, think about who your customers are and what sort of theme they will appreciate.
For the kids
When selecting a venue for your business, look at what is offered close to your shop. If there is a children’s play area in the centre, it will make a visit to the Laundromat so much more attractive to moms and caregivers.
A supermarket will be a draw card and so would coffee shops, a video store, game arcade and even a hairdresser. Other options include pinball and video games; you could approach a video game supplier about having a video game console fitted in the shop and share the profits with the supplier.
If you want to start a self-service coin operated Laundromat, and you’re thinking of putting in an area especially for children, check with your insurance company that you are properly covered with regard to liability.
Professional advice is needed to help you design the area to maximise safety and make sure that you won’t be responsible in case a child gets hurt. In fact, you may need to place signs saying you’re not responsible for children’s’ safety.
Even the big kids get bored
Even adults will get bored at a Laundromat. After all, mostly what they are doing is waiting around for clothes to wash and dry. Many laundries these days have one or more TV’s mounted on the wall or has music playing and offer a selection of magazines to read.
Some laundries keep the TVs tuned to one channel, some play videos, and others let customers change channels themselves.
If your laundry is unattended and you want to let customers change the channel, mount the TV low enough on the wall so they can reach the channel and volume buttons. Customers are likely to walk off with the remote control, even if it’s tacked to the table.
2. Snack time
It’s likely that customers who are at a coin operated self-service laundry will get hungry or thirsty while waiting for the laundry to finish.
Even if your shop is in a shopping area or near one, customers wisely don’t want to leave their clothes. So having a vending machine that has cool drinks, chips and sweets or even a hot drink vending machine can create extra profit.
1. Where to find contacts for equipment and electrical contractors
Lead Laundry & Catering
SA Cleaning Equipment
For a complete list of registered electrical contractors throughout South Africa contact the Electrical Contractors Association (ECA).
Want To Start A Property Business That Buys Property And Rents It Out?
Information on starting a property renting business.
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.
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:
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
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.
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.
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.
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.
How Do I Start Chicken Production In South Africa?
A guide to becoming a poultry farmer in 7 easy steps.
Where can I get training on poultry farming and the agriculture sector?
For training in poultry production, chickens, ducks, turkeys contact the South African Poultry Association.
Related: How To Start A Farming Business
If you need training in the area of poultry farming contact the South African Poultry Association who offer courses throughout the year.
Agricultural Research Council
- Agricultural Research Council – For training in poultry production, chickens, ducks, turkeys: Agricultural Research Council (ARC) offers a number of courses which include: Poultry production. Contact them here.
- Sustainable Rural Livelihoods (Livestock) Programme – Is a research, training and small business programme that addresses the basic issues underlying emerging farming systems and SMME Development in product processing and marketing. They provide guidance in areas small-scale poultry producers. Contact them here.
What regulations do I need to comply with as a poultry farmer?
A start-up must comply with health regulations but does not require a permit or licence to start a poultry production business. These differ from area to area, check regulations in with the local authority or associations in your area.
1. Abattoirs for broilers
As the establishment of an abattoir is an expensive and complicated to install. It is best for new members to market and sell their broiler chickens live. Click here to learn more.
2. Transport regulations apply
If you wish to transport slaughtered poultry. You must obtain and study the Meat Safety Act No 40 of 2000 for all the rules. All other regulations including these will be found under the General Regulation of the Public Health Act, 1919. Click here to learn more.
3. Animal welfare is extremely important
It is essential to ensure that birds are well tended to, that cages are not overloaded and high health standards are maintained. A shower and a disinfectant foot bath are a must before anyone is allowed to enter a broiler house.
4. Halaal and Kosher Certification
To obtain certification to sell Halaal and Kosher poultry products, your business has to have official certification from the Beth Din (Kosher) and the South African National Halaal Association to produce and sell products for Kosher and Halaal use. Businesses that produce for these religious entities are evaluated and inspected and impromptu audits take place regularly.
Only four kinds of poultry have been found to be profitable; chickens, ducks, geese and turkeys.
Ducks and geese have a further advantage as their feathers have always been an important by-product of the industry; this additional revenue stream and can mean the difference between success and failure.
What about ducks?
Down was a by-product of birds slaughtered for their meat. This isn’t the case any more as ducks and geese are reared for their down, which can fetch R1 000 a kilogram.
Irrespective of species, quality can vary according to the season the birds are plucked, their age, the temperatures they are kept at, as well as their living conditions.
To run a successful duck farm a combination of good nutrition and proper management are essential for raising healthy ducks.
Funding your Chicken Production business
You will need start-up capital to get your chicken farm going. There are various ways that you can acquire funding for your business.
1. Bootstrapping your business
The majority of start-ups are started without capital injection from venture capitalists and angel investors. If you are serious about turning your idea into a reality you are going to have to dip into your own pockets and bootstrap your way to the top.
It isn’t easy, but it can be very rewarding – both personally and financially, as you retain 100 percent of your equity.
2. Government funding and grants
There are numerous government funding and grants available, however you must match the criteria in order to qualify.
This comprehensive guide to Government Funding and Grants for Small Businesses gives you an indepth overview of the programmes available.
Chicken Production Handbook
Chicken Production Handbook Book’ (Afrikaans) is a practical handbook packed with valuable advice on how to start your chicken production venture in South Africa. To buy a copy of ‘Hoenderproduksie-Braaikuikens’ The publisher of the book and DVD, Johan Olivier (Kejafa Knowledge Works).
Now that you know the ins and outs of starting a chicken production your next step is to create a business plan.
Here is a Free Farming Sample Business Plan to get you going.
How Do I Start A Security Company?
There are two kinds of security companies, one that sells products and one that sells services or you can combine both.
The Security Sector
To start a security service company in South Africa you must register with the Private Security Regulatory Authority (SIRA).
There are two kinds of security companies, one that sells products and one that sells services or you can combine both. It is estimated that the private security industry in South Africa employs over 400 000 individuals.
You need a lot of capital
Starting a security business requires a good deal of capital outlay and it’s highly recommended that one should have a background in this field.
Want to start a business but don’t have the funds? Take a look at How To Start A Business With No Money for tips and advice.
Decide what kind of company you want to start
There are two kinds of security companies, one that sells products and one that sells services or you can combine both. Each sector falls under its own regulatory body.
Greg Margolis is the CEO of NYPD Security, a niche security company that has operated for the last five years in the leafy northern suburbs of Johannesburg.
“To run your own security service company I think that you have to be well rounded in terms of not just being a good business person, but you also have to be a people person, a marketing person and know a good deal about the business.
There’s tough competition, but I love what I do and wouldn’t sell my business even if I was offered triple what its worth. I am passionate about what I do”, says Margolis.
Starting a Security Services Business
To start a security service company in South Africa you must register with the Private Security Regulatory Authority (PSIRA). This includes paying a registration fee of R2 280 and writing an exam.
Once you have passed the exam, proved that you do not have a criminal record, SIRA will conduct an inspection to establish whether or not your business meets the infrastructure requirements. A further fee of R1 710 is charged for the assessment.
Each year the business is re-accessed which costs a further R500 plus the annual renewal fee or R520.
The following documentation is required for registration:
- An authenticated copy of the CM1, CM2, CM27, CM29, CM31 and CM 46 (apply at Registrar of Companies or Attorneys), if the applicant is a company;
- An authenticated copy of the Partnership Agreement if the applicant is a partnership;
- An authenticated copy of the trust deed and the letter of authorisation to the trustees from the Master of the High Court if the applicant is a business trust
- The Suretyship form (SIRA 4) to be signed by the natural person who has taken full responsibility of the security business
- Every director, member, partner (as the case may be) applying for registration as a security business must have successfully completed, at a training establishment accredited in terms of law, at least, the training courses Grade E to B
- An authenticated copy of the Tax Clearance Certificate from the South African Revenue Service (SARS)
- An authenticated copy of the VAT Registration Number from SARS.
- An authenticated copy of the PAYE number from SARS
- An authenticated copy of the COID number (Compensation for Occupational Injuries & Diseases) from the Department of Labour
- Sufficient information in writing to enable the Authority to ascertain that the applicant security business meets the requirements with regard to the infrastructure and capacity necessary to render a security service;
Related: Get going with a One Page Business Plan.
This include, inter alia, the following:
- Submit a business plan to the Authority including the location and activities
- A resolution by the applicant security business stating that it will be able to operate for the next year
- The applicant proves that it has an administrative office that is accessible to the inspectors of the SIRA
- The applicant must have equipment which is necessary for the management and administration of the security business, e.g. fixed telephone, fax machine, a hard copy or electronic filing system for the orderly keeping of all records and documentation
- Show that the affairs of the applicant security business are managed and controlled by appropriately experienced, trained and skilled persons
- The applicant security business has at its disposal a sufficient number of registered and appropriately trained and skilled security officers for the rendering of a security service for which it has contracted or is likely to contract
- The security officers must be properly controlled and supervised
- The applicant security officer has at its disposal sufficient and adequately skilled administrative staff members for the administration of the affairs of the applicant
- The business must have has all the necessary equipment, including vehicles, uniforms, clothing and equipment that must be issued to its security officers
- The applicant security business is in lawful possession of the firearms and other weapons that are necessary offer security services in respect of which it has contracted
The most important thing you can do to start and operate your own business is to develop a good business plan.
It’s invaluable because the business plan forces you to come to terms with your business. Selling the business concept seems to the problem, said Margolis. These are his five tips that will help to get the business going.
“The security industry in South Africa is very competitive. You have to get out there and you have to keep knocking on doors, there isn’t an easy solution”, explains Margolis.
1. Look at your business plan and decide if you have a competitive advantage. If not, work out how you can make the market understand the unique value your small business has to offer.
2. It is important to make yourself known. It isn’t difficult or expensive to increase awareness about the business. Attend ratepayer meetings, spend time at the local police stations, and attend meetings the police have with residents and businesses in the area. This way people get to know you and respect you and half the battle is won. Networking is the way to go.
3. It’s my experience that bigger companies are reluctant to give security contracts to a company that is a one-man show. Make sure that you have a structure in place. Clients need to know if something happens to you, the business will not fall apart, and the services they have paid for and you have agreed to supply, will not cease. Clients need to understand that besides experience, that you are credible and that all the checks and balances are in place. This must be one of the key selling points.
4. Consider taking on a partner. Choose a partner who has the attributes that you lack. The ideal partner would be one with strong links and contacts in the community that you want to work with. Let your partner control the selling side while you handle areas you’re strong in, such as expertise and service delivery. The other option is to employ sales staff.
5. Stay abreast of new trends in the field, and update your skills. This is something that I strongly believe in. You have to be well rounded in terms of not just being a good businessperson, but you also have to be a people person, a marketing and sales manager and know a good deal about the neighbourhoods you work.
For more information contact Private Security Regulatory Authority (PSIRA)
Are you new to starting a business? Read 15 Things Every Newbie Needs to Know About Starting a Business
What are the requirements to start a security product supplier business?
If you are starting a security company that sells electronic alarm systems and other security products it’s wise to become a member of SAIDSA in order to provide your business with the credibility it needs to be taken seriously by the public and security service providers.
The objective of SAIDSA is to upgrade the quality and standards of electronic security and to protect the public from unscrupulous, “fly-by-night” operators. When a security system is purchased, an ongoing relationship is entered into between the purchaser and the security service company concerned.
The security service product supplier must have the infrastructure and the required expertise to support the relationship continuously.
Security Sector Regulatory Bodies
The security industry has established a number of bodies to regulate itself. Membership in these bodies is voluntary. They include:
- Security Association of South Africa (SASA), whose membership is open to companies offering any type of security service
- South African National Security Employers Association (SANSEA), an employers association for companies in the security industry.
- Electronic Security Distributors Association (ESDA), an association of importers and distributors of electronic security equipment
- South African Intruder Detection Services Association (SAIDSA), an association of companies providing alarm monitoring and armed response services
- Safety & Security Sector Education & Training Authority (SASSETA)
- Vehicle Security Association of South Africa (VESA)
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