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Start-up Industry Specific

How Do I Start A Wholesale Fruit & Veg Business?

As a greengrocer or seller of whole foods, fruit and vegetables, you have a lot of scope when it comes to products.

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Get some direction with this Whole food Sea Market sample business plan

Besides selling fruit and vegetables, you would be able to sell other types of produce as well, such as flowers, herbs, eggs, milk, butter, cheese, and specialist foods such as olive oil, nuts and seeds, and organic produce.

Greengrocers can also offer personalised service such as a delivery service, taking orders over the phone, by email or through websites or Sms’s. They can also supply local restaurants, guesthouses, and coffee shops in the area.

The first step to take when starting any business is to prepare a business plan. This will help you understand the business process. There are various points that you must think carefully about.

Can a small wholesaler compete?

small wholesaler

Does size really matter?

To be successful you need a strong interest and a good knowledge of fresh fruit and vegetables – so that you know what is in season, the shelf life of different produce, ripening times, how to identify freshness and quality.

Related: 10 Ways Competition Can Improve Your Business

There is no doubt that one can be successful in this industry, but you will be competing with other greengrocers in your area, so you need to get to know your direct competitors very well.

One useful key to a successful greengrocer business would be to identify potential gaps in the market. These competitors will be independent operators like yourself. However, don’t forget to research other competitors such as large outlets like Fruit and Veg City and the large supermarket groups.

Their buying power makes it possible for them to keep prices low. Greengrocers can over come this by offering better quality products, personalised service and by stocking a variety of speciality fruits and vegetables that a supermarket would not stock.

Location is important – most of your customers will be people living or working locally, so you need to choose a convenient a location with lots of foot traffic.

Where to get fresh produce

fresh produce

Fresh produce in South Africa can be hard to find – unless you look in the right place

Markets

If the business is located in the Johannesburg area, the Jo’burg Market serves thousands of farmers from across South Africa who sends their fresh produce to the Market to be traded every day. Currently, about 15 000 farmers make use of this distribution channel.

Related: The Best Ways to Do Market Research for Your Business Plan

The large buyer base – averaging about 9 000 at any given time comprises of retailers, wholesalers, exporters, processors, informal traders and those buying for households. All major centres and even small towns have local fresh produce markets or co-ops where greengrocers can stock their stores.

Distributors

There are a number of national distributors who offer a reliable national supply chain. Their focus is to service identified target markets in the catering, wholesale and food service industry, with quality and affordable products.

  • Dew Crisp Farms supply fresh vegetables and fruit and aim their products at the “convenience market” where all the products are washed and cleaned, packaged and then distributed to supermarkets and greengrocers.
  • Yukon is the largest local supplier and exporter of baby vegetables in South Africa and supplies some of the most discerning retailers in the world. They also distribute products locally.
  • For farms and produce suppliers in the Overberg are of the Cape.

Niche wholesale businesses

organic-fruit-cut-up

Niche wholesale business in South Africa

Related: 5 Steps You Can Use To Find Your Niche

Interest in organic food continues to grow in South Africa, as many people are worried about the effects of pesticides and fertilisers.

  • Go-Organic.co.za is South Africa’s premier organic website, directory, and marketing company. They trade locally and internationally in bulk organic products. Go-Organic.co.za is a private, commercial organisation committed to social and economic upliftment.
  • Urban Sprout is an organic-eco directory that focuses on organic and eco-friendly products from specialist tea to organic whole foods. To access the directory go to www.urbansprout.co.za.

Equipment Requirements

The outlay could be costly, as you want your shop to look attractive. It should have the following items installed in the shop.

  • Refrigerated display units.
  • A freezer if you plan to sell frozen produce.
  • Budget for shelving at various heights, to display produce.
  • Scales to weigh products.
  • An electronic till.
  • Credit card swipe machine facilities to accept card payments. You can buy or rent these from your bankers.

Ongoing Costs

Food Lovers Market in South Africa

Food Lovers Market in South Africa

The need for a good cash flow is important, as you will have a number of ongoing costs in this kind of business.

  • A constant supply of fruits and vegetables, packaging and promotional expenses should be included in your budget
  • As your business grows you may also need a van with cold storage facilities for deliveries
  • Don’t forget insurance costs such as fire, theft and damage, employers’ liability insurance for staff, as well as motor insurance for any delivery vehicles
  • Marketing
  • Staff costs
  • Book keeping service
  • Insurance.

Related: Start-Up Costs Worksheet

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.

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4 Comments

4 Comments

  1. Sambil Mukwakungu

    Jan 14, 2014 at 11:07

    Thank you for the info. I really find this useful, especially that I would love to establish a fruit and veg in my country!

  2. Steve

    Jan 28, 2015 at 10:27

    This is valuable information. I am farming 3 hectors of vegetables. Who packs vegetables for Pick n Pay? I need to supply green pepper, cabbage, Tomatoes and Onion. Please help even with other contacts where I can supply vegetables.

    • Kevnomor

      Nov 8, 2015 at 13:03

      Call me at 083 470 5230 or 012 757 2882 serole

  3. Muhammed-Khalid Jordaan

    Nov 10, 2015 at 09:22

    Thanks for the information. I’m in the fruit and veg business for almost a year now andI’m always looking for other sources of produce. Especially organic produce. If anyone knows of any other suppliers besides the Joburg Fresh ProduceMarket, please email me info@freggies.co.za

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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 placement agency?

A guide to starting a placement agency.

Entrepreneur

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

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

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

Related: Free Sample Business Plans

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

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

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

Do your research

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

Choosing candidates

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

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

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

Minimum wage

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

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

Permanent placements

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

Related: Hiring Your First Employees

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

Other responsibilities

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

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

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

Dealing with the client

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

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

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

Preparing candidates for interviews

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

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

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

Establishing a client base

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

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

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

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

Related: How 5 Businesses Built Up Their Client Bases

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Start-up Industry Specific

How To Start A Property Development Business

The first thing you must have is a good business plan.

Entrepreneur

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Content in this guide

  1. Business plan
  2. Zoning
  3. Title Deeds
  4. Find out who owns the land
  5. Financial support
  6. Building regulations
  7. Join the NHBRC
  8. Grading levels

1. Business plan

Business plan

Business plan advice

In the business plan you also have to discuss how you intend to cope with the proposed electricity tariff increases and allow for possible interest rates hikes which would affect the profitability of the project.

Another important issue which must feature in your business plan is the cost of managing, maintaining and securing the residence.

Any organisation that is providing millions of Rand to develop such a project will need to be sure that the residence will at all times be properly maintained and is secure.

Without a sound business plan, you’ll be unable to find funding. It’s important to remember that a business plan is more than a means to money; it’s also the blueprint of the business and the best way to test whether or not the business is feasible.

You must show clearly in the business plan that you have researched the market thoroughly and are able to show that the students (who are always short of money) will and can afford to rent the accommodation as they are the key to the success of the project.

2. Zoning

property-zoning

Zone your business using these tips

Make sure that the property is zoned for this type of accommodation. Zoning is the grading of properties in terms of what it can be used for and what can be built on that property. Zoning schemes are imposed by Provincial Legislation and administered by Municipalities.

Zoning is the grading of properties in terms of what it can be used for and what can be built on that property. Zoning schemes are imposed by Provincial Legislation and administered by Municipalities.

South Africa’s laws require that in order to develop townhouses in a residential area the property must be zoned correctly (the property may only be zoned to develop one dwelling and not a number of different units).

Related: Zoning and permits

If the property is zoned incorrectly, you have to apply for rezoning. Each local authority has different parameters in order to rezone property.

3. Title Deeds

Title Deeds

You will need the Title Deeds

In addition to the zoning regulations, development is also controlled by conditions of title. These conditions are set out in the Title Deed of each property, and can restrict the way in which a property may be developed.

Related: How do I re-zone a property for commercial use?

Any development of land that ignores this legislation and its regulations can result in prosecution in terms of the applicable legislation.

The zoning regulations as well as the property description, and the size, orientation and other details can be obtained from the local municipally office and this department can also provide information regarding the National Building Regulations.

If a proposed townhouse development needs to re rezoned the application is a formal procedure. As it is a very complex procedure, it is best to consult a professional town planning consultant or other professional such as a land surveyor or a lawyer.

There are other costs to worry about as well. These include preparing the application, i.e. professional fees, the application fee charged by the council and the cost of drawing up plans.

Depending on the type of application, obtaining a decision may take as long as 12 months.

After the application is submitted it is circulated to relevant Council departments and agencies for comment.

Find out who owns the land

You will also have to find out who owns the land. Every property in South Africa has to be registered with the Deeds Registries Office in South Africa.

Related: How to query details of ownership of commercial property?

The deed constitutes proof of who owns the property. The deeds office keeps a record of all property transactions. If a title deed is destroyed or lost, application can be made to the deeds office for a duplicate original of the deed.

4. Financial support

business-funding

Do you need to fund this business?

As this is an education project, contact the Small Enterprise Development Agency, who provide free mentorship and guidance that will help will all the important steps in starting a successful business.

They will point you in the right direction in order to find funding and may also be able to help you get funding through the Department of Education.

However, although they do not fund projects, they will certainly be able to refer you to the right institutions. Other funders include:

NEF Imbewu Entrepreneurship Finance

They provide risk capital to new businesses in the property development arena. Visit their website for more information.

IDC – Healthcare and Education Fund

This fund supports education. Applications for financial assistance are evaluated primarily for economic merit (viability), while collateral is a secondary issue.  The policy is to have interest rates between 2 below- and 5% above prime overdraft rate. Download the pdf here.

Umsobomvu Youth Fund

Enterprise Finance aims to promote entrepreneurship among young people, so it provides funding to the youth (18-35 years old) to help them start a new business or grow an existing one. However you will have to demonstrate commitment to the venture and that it will be economically viable. Visit the website .

5. Building regulations

building-regulations

Do you know about South Africa’s building regulations

It is widely known that the regulations for the building industry in this country are far less stringent than those of other countries.

A good reputation is so important

A reputable developer will never cut corners when building. By law certain standards have to be met throughout the building process. Architectural plans must adhere to council regulations and be passed by the local municipality.

Approval

Foundations must be approved by a building inspector before concrete is cast; the structure undergoes a damp proof test, the roof structure has to be passed and when the building is complete it must pass a final inspection.

Building inspectors can make or break a development

No loan for the construction of townhouses will be authorised by a bank without a building inspector approved by the National Home Builders Registration Council (NHBRC) passing the structure. If you plan to sell townhouses and have cut corners, buyers will be unable to obtain funding to buy a town house.

The Builders Manual

Before you start building contact the NHBRC and arrange to get a copy of their guide, “The Builders Manual”. It is a complete guide to building and explains costing of materials, planning and just about everything you need to know.

Download ‘A Guide to the Home Building’ manual here.

There is no such thing as a free ride

There is software on the market which is designed to assist owner builders to effectively cost all aspects of construction including labour, materials and equipment. However, it’s unlikely that you will find free software that you can use effectively. Contact the NHBRC for advice.

6. Join the NHBRC

NHBRC-logo

NHBRC

“Avoiding the professional services of a Quality Surveyor could be a foolish decision”, says Zweli Mtetwa, Public Relations Manager for the NHBRC.

“We can help. We look at plans and can advise the best route to take, discuss the right materials and check quotes to ensure that castings’ are correct and that the owner-builder is not being over charged. The only requirement is that the builder has to join the NHBRC. Registration with the NHBRC will also give builders credibility” advises Mtetwa.

Any enterprise that wants to tender work from the public sector in the construction industry, must register with the CIDB.

Before you can register with the Construction Industry Development Board (CIDB) you must have established your business and have a history of various construction projects under your belt.

For registration and membership fees – download the NHBRC registration form here.

The CIDB registration qualifies you for projects in the Public Sector

Any enterprise that wants to tender work from the public sector in the construction industry, must register with the CIDB. To register with CIDB your enterprise must be a registered business entity with the Companies and Intellectual Property Commission (CIPC).

Register the work you have completed

You must register any construction work you have done. These include contracts for the combination of goods and services, extension construction, installations, repairs, maintenance, renewals, renovations, alterations, dismantling or demolition of buildings and engineering infrastructure.

These projects must be above R200 000 for public sector and R300 000 for private sector. This creates a track record for your business which you require to register with CIDB.

Finance is not the only criteria

Your company’s ability to finance a particular construction project does not automatically mean you will qualify for a project; you need to have solid experience behind you. Nor does a grading designation actually determine which project you will be able to do.

7. Grading levels

Grading levels

Nine Grading levels in South Africa

There are nine grading levels

The different grades show the size of contracts a contractor is capable of doing. This is based on financial and works criteria. The financial criterion comprises best annual turnover, track record, and available capital.

Works capability assesses a contractor’s track record and the number of qualified professionals in certain specialist categories (e.g. electrical).

Financial capability

This is evaluated in terms of the contractor’s best annual turnover during the past two years, the largest contract the contractor has performed in the past five years, and the value of the available capital that a contractor is able to secure in order to perform a construction contract.

Works capability

This area is evaluated in terms of the largest contract the contractor has performed in the class of works applied for, as well as compliance with statutory requirements (e.g. registration with the Electrical Contractors’ Board of SA).

The contractor must also have the required number of qualified professionals in their employ for the grade applied for. These can be either full-time employees or full-time equivalent.

There are various levels of CIDB Grading. Always apply for the level you are capable of:

CIDB Grading Level

When the contractor grading is granted it will consists of a combination of alphanumeric characters that represents the capability of the contractor in a particular class of works. E.g., 5GB represents a contractor that is capable of performing a contract to the value of R6.5m in a General Building class of work.

A contractor can also apply for recognition as a “potentially emerging contractor”. Potentially Emerging status indicates that the contractor has significant development potential, but has impediments that must be overcome.

Related: I would like to get started in the property sector. What should I know before starting a real estate or property related business?

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