Connect with us

Start-up Industry Specific

How To Guide For Starting A Liquor Store

In South Africa anyone wishing to sell or distribute liquor is required by law to have a liquor licence.

Entrepreneur

Published

on

89-how-do-i-start-a-liquor-store

Start your business today

Getting business licenses is about as much fun as having a root canal treatment at the dentist, but is has to be done and done correctly. One of the most common mistakes that Entrepreneurs make is not getting all the necessary licences and permits right in the beginning.

In South Africa anyone wishing to sell or distribute liquor is required by law to have a liquor licence. If liquor is sold without a licence it is considered as breaking the law and the police can close down a business and confiscate its assets.

Making an application and paying the required fees doesn’t necessarily mean that a licence is automatically granted.

Related: Free sample business plans here

The liquor act and its regulations are complex and applicants should seek professional advice in order to gain a successful result with regard to the application of a liquor licence.

Content in this guide

  1. Responsibility
  2. By-Laws
  3. Zoning
  4. National Register of Liquor Licences
  5. The law
  6. Trading licence
  7. Alternatives
  8. Running the Store
  9. Suppliers List
  10. Security

Responsibility

Social-responsibility-alcohol

Drink responsibly – sell responsibly.

Social responsibility has become an important issue which has to be considered by new applicants.

This means that there has to be serious commitment to black economic empowerment and a positive contribution has to be made in order to combat alcohol abuse.

New licence holders will have to show how they intend to restrict or promote job creation, provide diversity of ownership, promote exports and deal with competition.

By-Laws

Apart from the requirement of a valid liquor licence to legally sell liquor in Johannesburg, there is legislation and municipal by-laws with which a business owner or manager must comply in order to operate legally.

Related: Choosing the Best Location for Your Liquor Store

These differ from municipal area to municipal area.  Failure to comply can and will result in fines, prosecution and/or the forced closure of the business.

Zoning

South-African-map-zoning

South African zoning laws

Liquor outlets can ONLY be run legally from a property if it is zoned for the type of liquor outlet being applied for.

Related: What You Need to Know About Zoning in South Africa

Zoning and consent information is not given over the phone. It can be obtained from the local municipality.

National Register of Liquor Licences

A National Register of Liquor Licences is operated by the DTI which lists the name, address, activities permitted, and conditions attached to any liquor licence that is issued in South Africa.

As well as being published on the Dti website, the register can be viewed and copies made on request, but a fee is payable for this information.

Those who cannot apply for a liquor licence are:

  • Minors
  • Un-rehabilitated insolvents
  • Persons committed in terms of the Mental Health Act, 1973;
  • Persons who have contravened this Act or provincial liquor laws to the extent provided for in the Act.

The law

South-African-law

South African liquor trading laws

Liquor licence holders are governed by the Liquor Act, 27 of 1989 (Act) and the Liquor Act (59 of 2003) which states that the holder of a licence who keeps licensed premises open for the sale, supply or consumption of liquor, or sells or supplies any liquor at a time when the sale of liquor is not permitted by the licence shall be guilty of an offence.

The Act provides for the manufacturing and distribution of liquor to be regulated at national level, while micro manufacturing and retailing continue to be regulated at provincial level.

This determines where and how an application for a liquor licence is made.

Time frame during the application procedure:

On the first Friday of the month:

  • The completed application must be delivered to the Magistrate in the district where the premises to be licensed are situated.
  • Two weeks before the application is forwarded to the Magistrate:
  • A notice of intention must be sent to the Government Printers in Pretoria for publication in the Government Gazette.
  • This notice in the Government Gazette is the only notice of the application provided to the public.
  • The police (DPO) for the district will lodge a report with the Magistrate.
  • The public has 42 days in which to reply, in writing, to the police report and any objections.
  • If there were no objections received and the police report has been received, the application can be forwarded to the secretary of the Liquor Board.
  • The Liquor Board will consider each application in terms of the applicant, the premises and the public interest.

Smart Marketing Ideas for Your Small Business

Fees: Less than R5 million turnover

  • Application: R500
  • Initial Registration: R2000
  • Notice to Review: R500
  • Annual renewal of registration: R2000
  • Transfer fee: R1500
  • Request for variation of conditions: R1500
  • Notice of change in location or activities: R1500
  • Appointment of person to conduct activities: R1500

Trading licence

liquor trading licence

Liquor trading licence in SA

Certain businesses in South Africa such as a retail liquor store require a trading licence. Trading without a valid licence is punishable with a fine of up to R2 000.

How to apply for a trading licence

Steps to follow when making application:

  • Download the application form (RPI) here for the City of Johannesburg or collect one from your nearest municipal office
  • Pay the Application/License fee.

These documents must be attached to application form (RPI):

  • In case of a company, close corporation or partnership a copy of the company certificate and list of directors is required
  • Copy of menu
  • Copy of 10 documents of directors, partners and copy of 10 of person in charge are required
  • Copy of liquor licence
  • Copy of SARS tax certificate
  • Copy of approved building layout plan
  • Zoning certificate.

When an application is made and the application form is complete with copies of all relevant documents which are attached to the application, a receipt will be issued in regard of fees and application received.

The next steps are:

  • Request for reports will be drafted and forwarded to relevant departments
  • In the case of requirements have been set by a department; the applicant
  • must comply with the requirements and then arrange a re-inspection with
  • The officer or department concerned.
  • Only when all departments have retuned favourable reports and recommend approval the trade license will be issued.
  • If the applicant trades while waiting for a trading licence to be approved, the applicant is doing this at his or her own risk.

Note: The licence fees quoted above are those that apply in the Johannesburg municipal area. The fees change from area to area and the requirements may also change depending on the by-laws of the area that you’re applying in.

Alternatives to Starting Your Own Liquor Shop

business-investment

Advice on starting a liquor business

Buying into a franchised system or buying an established business will assist you in getting your venture off the ground much faster that starting your own business from scratch.

Franchises

Franchises are safer but more expensive. One of the perks of buying a franchise is that the franchisor supplies liquor to the store as well as designing and decorating the shop.

Related: Should You Purchase An Existing Franchise?

As a franchisee you receive ongoing training and franchisor support. Another huge advantage is that you have access to group marketing and strong purchasing power through the franchisor.

Buying an existing liquor store

Existing businesses can be a lot cheaper to get started.

Ready to Write Your Business Plan? Here’s the Format to Follow

You must find out why the business is for sale and it’s very important to ask for copies of the financial statements for the last three years.

Take them to an accountant for an opinion on the performance of the business to date. Check whether or not there are any new developments planned in the area. You don’t want to pay a lot of money for a business only to find out that a new centre is going to be built next door featuring a huge discount liquor store.

Always ask what the owner is planning to do after he sells the business and if he or she is planning to open another liquor store.

Running the Store

liquorland

Liquorland store in South Africa

Fitting the shop

Besides a “point of sale” counter, you will need free-standing units to display wine and spirits. Depending upon the size of your shop, you could also have displays in the middle of the store.

You can achieve this either with modular shelving units or display units which can be bought new or second-hand. If you are good with your hands, you could buy attractive DIY units which you can assemble yourself.

Suppliers and distributors will from time to time supply promotional material which can be used to advertise products and add to the liquor store ambiance.

Signage

You will also need signage – the name of the business must be placed strategically outside the shop front.

Related: Say It With Signage

Inside the store you will need a cash register, telephone and computer to run various programmes to control stock and to run all the necessary accounting practices that a business needs to keep track of what goes in and out and who you owe money to etc.

Creating Your Own Suppliers List

Beer-crate-suppliers

Liquor store suppliers in South Africa

SAB

The next step is to get a list of suppliers for your liquor and soft drinks. In order to buy directly from wholesalers you will have to contact them directly and negotiable the best deal possible. For beer and cider South Africa’s biggest supplier is South African Breweries Ltd (SAB).

You have to apply to one of their depots in your area and complete a credit application. On approval they will be able to supply you with fridges to keep drinks cool. But each depot has its own set of requirements.

To find the nearest SAB depot visit the SAB website and contact them for details.

ABI

Amalgamated Beverage Industries (ABI) is the soft drink division of South African Breweries (SAB). ABI supplies products from Coke and mixers to energy drinks, but do not deliver unless an order 20 cases or more at a time. They also supply fridges.

In order to buy from them you will have to supply the following:

  • A copy of your ID document
  • A copy of a cancelled cheque or bank details
  • Copy of your CK document
  • Vat registration number
  • If you are renting premises they require a letter from the landlord.

Wine & Spirit Suppliers

Distributors supply liquor stores, restaurants, night clubs and pubs.

You need to investigate distributors to find out whom would be best suited to your needs and if they are able to supply to the area that the business is located in.

The web is a useful source of South Africa’s distributors and wholesalers.

Here are some useful sites:

Local products

If you are considering stocking local wines you can buy directly from wine estates. Contact wineries either through the internet or by visiting estates to select brands you know will sell. Pay attention to price and types of wines that you think your clients will enjoy.

Choose the furnishings, and racks that meet your budget. You can always upgrade later after sales pick up. If you decide to stock wine, this product lends itself well to easy and fun marketing events.

The store will be able to host tasting events and wine appreciation classes. If these events are free they will draw customers, and in this way you will be able to grow your customer base.

Security

You need to consider carefully how you are going to protect your investment. Installing high-tech equipment and having security personnel in the store are options you can make use of.

Are you looking for business ideas? Here are 10 business ideas that are ready to launch.

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
2 Comments

2 Comments

  1. Frik Liebenberg

    Aug 22, 2014 at 14:57

    The writer is confusing the requirements of the National Liquor Authority with that of the Gauteng Liquor Board with his/her comments about the “Fees for less than R5 million turnover. Requirements of the 1989 Liquor act and the 2003 Liquor act are also not the same and can lead to confusion.

    Frik Liebenberg Liquor Licensing.
    Frik Liebenberg Business Advisory services.

    • Eds

      Sep 24, 2015 at 22:39

      Frik, I still need a licence and perhaps your expertise can be used in this regards, are you still in operation?

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 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

Start-up Industry Specific

How Do I Start A Transport Or Logistics Business?

An all in one guide to starting a transport and logistics business.

Entrepreneur

Published

on

5-what-should-i-know-and-be-aware-of-before-starting-a-transport-or-logistics-business
Prev1 of 9

Thinking about starting a transport business?

Forecasts indicate that the demand for freight transport will grow in South Africa by between 200% and 250% over the 15 to 20 years.

Your Free Cheat Sheet: Transport and Logistics Business Cheat Sheet

Some corridors, (high volume transport routes that connect major centres), such as the corridors between Gauteng and Cape Town (which amount to 50% of all corridor transport) will increase even faster.

The scope in the transport and logistics industry is varied – from a one-man show using a small truck to transport goods and offer services, to a fleet of transport vehicles which travel the length and breadth of South Africa’s roads.

Road transportation includes commuter transport from taxis to bus transportation.

It can be a tough industry and there are many threats facing transport businesses but if you get it right, you can build a successful business.

What is covered in this guide:

  1. How to start your transport and logistics business
  2. How to get funding for your transport business
  3. What are the costs involved
  4. Finding customers and getting transport contracts
  5. Getting onto suppliers lists
  6. Buying trucks and employing drivers
  7. What are the regulations and risks
  8. Where to find guidance to start your business.

Ready to get going? Click the arrow button to learn how to start your own transport business.

Prev1 of 9

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

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

Trending