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Start-up Industry Specific

How To Start A Passenger Transport Business

Starting a passenger transport business and what is required.

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Content in this guide

  1. Licences
  2. Provincial Operating Licence Boards
  3. Permits are required
  4. Vehicle Requirements
  5. What regulations apply?

For a business to outsource staff transportation to your company, you must provide quality and reliable door-to-door shuttle transportation.

To do this you must comply with the South African transport regulations, the by-laws that affect the area in which you operate and that your business has adequate insurance cover.

Licences

Provincial Operating Licence Board

Gauteng Provincial Operating Licence Board

Before you can transport passengers for gain, you need to have a Contract Operating Licence. A Contract Operating Licence is obtained from the Provincial Operating Licence Board nearest to you.

You need to complete an application with your company particulars and you have to provide the following details:

  • A copy of the contract (Reason: If the contract runs until 2016, the licence will only be issued until 2016)
  • Business registration certificate
  • Proof of insurance. (A quotation from a reputable insurance company will be accepted)
  • The type of public transport service you will be operating
  • The route particulars
  • The vehicle particulars
  • You also need to sign an affidavit stating that you have not committed a violent or serious offence or been convicted of an offence involving illegal weapons. There is a small administration fee. This licence is valid for a period of time, usually five years.

Resource: Free Business Plan Template Download

Provincial Operating Licence Boards

Provincial Operating Licence Board

Western Cape Provincial Operating Licence Board

To find a list of Provincial Operating Licence Board offices around South Africa visit www.transport.gov.za.

Download the requirements for the new application for Operating License/Permit (NLTA, Act no 5 of 2009, section 54 and 62) here.

Permits are required

Staff-transport

Passenger Transport Business permits you may need

To be able to drive certain types of vehicles such as a passenger carrying 21-seater bus, you are required to have a professional driving permit in addition to a driving licence for the Code of vehicle that you plan to drive.

To qualify for a PDP the applicant must never have been convicted of driving under the influence, of reckless or negligent driving, of a violent offence and lastly, never had a driving licence suspended.

There are other documents that you require in order to apply for a professional drivers permit (PDP).

  • Complete form PD1
  • Pay the required fee
  • Produce your ID
  • Provide two photographs
  • Produce a valid driving licence
  • Produce a medical certificate proving good health
  • Produce proof that you do not have a criminal record
  • Show any other professional driving permit or public driving permit that you already hold.

Visit the eNaTIS website to download the forms.

eNaTIS

In order to obtain a professional drivers permit you must contract eNaTIS who control the official register for all vehicle, driving licence, contravention and accident data and information. eNaTIS transactions are performed at provincial offices or local authorities around the country.

Related: How to Write a Funding Proposal

These transactions include all vehicle licensing, vehicle registration, driving licence applications, and contravention, accident and infrastructure transactions.

Visit the eNaTIS website for more information.

Vehicle Requirements

vehicle-transport

Passenger Transport Business vehicle requirements

The law requires that vehicles must be licensed annually. It is your duty as the vehicle’s owner, to ensure that the licence is renewed before it expires. If the licence is not renewed you are liable to pay late licensing penalties and arrears.

Roadworthiness of vehicles is a priority

Any vehicle operating on South African public roads must be deemed “road worthy” by an official private or public testing station. The roadworthiness test checks the following aspects of the vehicle:

  • Identification and documentation
  • Electrical systems
  • Fittings and equipment (including mirrors, safety belts etc)
  • Braking system
  • Wheels (including tyre condition)
  • Suspension and undercarriage
  • The steering is in order
  • The engine
  • Exhaust system
  • Transmission
  • Instruments
  • Vehicle dimensions.

Insurance cover is important

Other than the comprehensive motor insurance cover on vehicles, you must also include Passenger Liability Insurance. This covers you against any claims that passengers might make against your company in the unfortunate event of an accident.

Passenger Liability Insurance covers your liability against potential injury if you are in an accident while transporting passengers. The amount of cover will depend on various factors, such as the size of the vehicle, and can include roadside assistance; hire of another vehicle, etc   However, Passenger Liability Insurance is only valid if the driver is in possession of a valid PDP.

Many business insurance brokers can advise you. Not covering yourself for these liabilities could spell the end for your business should something untoward happen, so don’t risk not taking out adequate insurance cover in an attempt to save money.

It’s important to make sure that drivers are properly qualified:

A bus driver should:

  • Be at least 21 years old
  • Be in possession of a valid PDP driver’s license
  • Be courteous, tactful and patient
  • Get along with others
  • Work well under pressure
  • Remain calm during emergencies
  • Work well without supervision
  • Be emotionally stable
  • Have good eyesight
  • Have good health and stamina.

What regulations apply?

Transportation Board

Transportation Board regulations in South Africa

Each Province has its own Transportation Board that considers and issues permits for the transportation of passengers/tourists/own employees.

Related: Transport and Logistics Business Cheat Sheet

Operating licenses for public passenger road transport services are issued in respect of the following services:

  • Tik-tuk service
  • A metered taxi service
  • Minibus taxi service
  • Bus-type service
  • Education service
  • Tourist transfer service
  • Charter service
  • Staff transportation service
  • Shuttle service
  • Courtesy bus service.

Related: How Do I Start a Transport or Logistics Business?

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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

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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.

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Start-up Industry Specific

How do I start a cleaning company in South Africa?

There are many things to consider when thinking about starting a small business.

Entrepreneur

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Decide how many offices you want to service and in that way you can determine how much you can earn.

Two market groups

The cleaning industry comprises of two market groups namely commercial and consumer. The consumer group is chiefly focused on the residential house cleaner services together with window cleaners and carpet cleaners.

Related: 60-Second Solution – How to Set Your Prices

The commercial arena chiefly focuses on cleaning services, which generally offer services such as window cleaning, bathroom and office cleaning on a daily basis.

Suppliers

There are many companies in South Africa who can supply wholesale commercial and industrial supplies. Consult with Exitol or Wetrok.


9 Answers You Need About Yourself Before Starting Your Own Business

If you think starting a business is only about financing a good idea, you have a lot to learn the hard way.


Factory Shops

The other alternative is to buy from factory shops, where you can buy cleaning products at discounted rates in large quantities.

How to start a business

For more information on how to start a business, read Entrepreneur’s guide: 21 Steps to Start-up.

Business plans

Any business, no matter what it is, must have a business plan, which is committed to paper.

Related: Get Started On Your Business Plan. Here’s a Format Guide

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Start-up Industry Specific

How Does One Start a Petrol Station in South Africa?

How to become a supplier of fuel to the public.

Entrepreneur

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Starting an independent filling station

South Africa petrol stations fall into two categories, independent and franchise operations, both of which are funded in the same way.

Independently owned garages still play a big roll in the South African economy.

According to South African Petroleum Retailers Association (SAPRA), who represents all the stakeholders in the petroleum industry, before a new filling station can be opened, three sets of approvals, authorisations and licenses are needed.

  • Land use rights for purposes of a filling station;
  • An environmental authorisation; and
  • Site and retail licenses.

In terms of the Petroleum Products Act, 1977 (PPA) as amended in 2006, and which is administered by the national Department of Energy, one cannot apply for a site and/or retail license before you have both land use rights and an environmental authorisation.

Related: More on the Government Funding Options Available to You

Existing filling stations are in a particularly strong position because of the PPA which controls the energy authorities to ensure that the number of filling stations is appropriate to local sales volumes and does not exceed the optimal number for an area.

Franchise operations

franchise-operations-for-petrol-stations

Petro companies in South Africa

Petro companies (Engen, Sasol, etc) offer franchises which include intensive training programmes and stipulations for franchisees. Sasol, for example, will mentor and promote franchisees on a monthly basis and assist the franchisee throughout the process. and visit each month and provide support and guidance.

“It isn’t difficult to get a franchise as long as you have funding. A Sasol filling station franchise costs in the region of R1 million”, says Able Mokoena, Franchise Consultant for Sasol.

“If you have your own site, then Sasol will undertake an inspection of the site before proceeding. Licences are required which are included within the franchise agreement”.

Franchise concept comprise of separate business units

BP petrol station

BP petrol station

Often, depending on the franchise company, the concept could comprise of separate business units such as the forecourt, a convenience store, a bakery, car wash or a quick-service restaurant. These can be added under certain conditions.

Each business unit has to adhere to individual standards for methods of operation, service levels, management, profitability and continuous training of staff. Most importantly, each unit is regarded as an individual profit centre, and may not be run at a loss and be offset by the other units.

After extensive market research, the franchisor determines which business units are suitable for the particular site and grants a licence to a single franchisee to operate the entire outlet.

Before you sign an franchise agreement understand clearly what franchise royalty fees, penalty clauses, support, training, and requirements you are responsible for or will receive.

The Franchise offers a certain name brand of petrol related products, which are subject to the rules and regulations of the franchisor.

Related: Look at the Complete Picture Before Investing

Make sure that all licenses, agreements, and permissions are in place. These should also be a pre-condition in the purchase offer. Find out where the competition is located, what services they offer.

A business plan is a must

business plan

Business planning advice

Create a working business plan. Make sure you include a provision on monitoring cash flow. Also, include marketing techniques to promote the filling station. Without one, you won’t be able to apply for funding.

Related: Download a Free Business Plan Template Here

Raising money

caltex-petrol-station

There are many different ways to cook an egg and the same applies to raising funds to start a petrol station, or for that matter, any new business. If traditional options such as banks and private funders don’t work, consider the possibility of collaboration with a group of investors. Visit the following links for guidance:

  • Overcoming financial hurdles
  • No capital, no collateral, no problem
  • Where to get the money

The petrol retail price is regulated by government, and changed every month on the first Wednesday of the month. The calculation of the new price is done by Central Energy Fund (CEF) on behalf of the Department of Minerals and Energy (DME).

The petrol pump price is composed of a number of international and domestic elements. The international element, or Basic Fuel price (BFP), is based on what it would cost a South African importer to buy petrol from an international refinery and to transport the product onto South African shores.

Then a number of other elements are added to reach the final price such as Fuel tax, Customs & Excise levy, Slate levy, Retail margin and the Road Accident fund.

Motivation

Africas Greatest Entrepreneurs

Africa’s Greatest Entrepreneurs

If you are thinking of starting a filling station you should read Africa’s Greatest Entrepreneurs by Moky Makura, (2008) published in paperback by Penguin Books. It tells the story of T K Mmusi, a man armed with little knowledge or experience, who started a Total petrol station in Botwana.

Its success provided the capital to start Pula Carriers, a logistics company with a fleet of 20 tankers, each one fitted with state-of-the-art technology. Today, Pula Carriers is a major distributor of fuel in Botswana.

Related: How to Start a Fuel Transportation Business

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