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.
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.
“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.
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.
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.
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.
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.
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.
How Do I Start A Transport Or Logistics Business?
An all in one guide to starting a transport and logistics business.
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.
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:
- How to start your transport and logistics business
- How to get funding for your transport business
- What are the costs involved
- Finding customers and getting transport contracts
- Getting onto suppliers lists
- Buying trucks and employing drivers
- What are the regulations and risks
- 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.
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How Do I Start A Security Company In South Africa?
There are two kinds of security companies, one that sells products and one that sells services or you can combine both.
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.
If you’re looking at starting a security guard company in South Africa, the following guide will be able to assist you in the deciding if it’s the right decision for you.
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.
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.
What about area competition?
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;
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.
Related: Get going with a One Page Business Plan
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.
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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