An internet café/cybercafé or gaming café is a place where one can play online games, surf the internet and email friends and family. Users pay a fee, usually per hour or minute. Internet Cafés have blossomed in South Africa because of broadband availability. Nevertheless, there is still not enough access to the internet in remote and impoverished areas of South Africa.
Gaming and Internet Cafés
A popular variation of the Internet Café business model is the addition of a gaming centre, which is generally used for multiplayer gaming. Gaming is another way to increase profits and services that can be offered to clients.
The Internet Café industry is an unregulated industry with no official industry association. One has to be careful to ensure that start-ups are dealing with reputable suppliers. However, there are municipal regulations that apply. By-laws change from area to area, so it is advisable to check applicable regulations with your local municipality.
Make contact in person
Now that you have decided that you are going to start an Internet Cafe, make contact with a business owner in a similar business. They’ll have a good feel for the industry and specifications that are needed, and can assist in terms of where to acquire skills, which suppliers you can trust and what you can expect to pay for software and equipment.
Do your own surfing
Most industries have business associations that hold regular meetings, have newsletters, blogs and websites that are important to the industry. You can contact business owners through the internet and through various blogs. Visit www.search.co.za/Computers-Internet/InternetCafes, which is packed with local Internet Café’s all offering something different.
The right stuff
You’ll need professional billing, monitoring, and management system software for the Internet Café. There are guides available which will help you to determine what to charge for computer time, what software and what type of computer equipment to purchase and most important which wireless network to select that will work most efficiently in the location that you have chosen to set up your business.
How to Get Started
What happens next?
If you are going to be a business owner, you need to update skills in these areas:
- Business skills to understand finance
- Technical skills regarding product and service
There are companies and internet sites that can help optimise the research and development cycle, help with marketing, operations and finance. Contact the Department of Trade and Industry (dti) or the Small Enterprise Development Agency (seda).
Once training and research is complete, the next important step is to put together a comprehensive business plan. Without a 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.
A business plan is your safety net! Don’t panic if you don’t know how to create a business plan.
The Dti or Seda can refer you to a Business Mentor. Mentors are experienced business people who volunteer to help entrepreneurs through the start-up period, giving advice and helping with business plans, accounting, cash-flow projections, financial planning and budgets, financial viability, marketing, advertising, planning and merchandising.
Register the business
When starting a business you will have to decide if you will operate as a sole trader (under your own name) or register the business under its own name (as a close corporation, partnership, co-operative or company). For more information talk to the Companies and Intellectual Property Registration Office (Cipro)
Don’t forget to pay tax
If you run the business as a sole trader you will pay income tax on your earnings as an individual because business earnings are regarded as your personal earnings. If your business is registered as a close corporation, company or co-operative, then the business has to pay tax on its profits.
You also need to deduct Standard Income Tax on Employees (SITE) and Pay as You Earn (PAYE) from your employees’ salaries, and pay this to the South African Revenue Services.
Finding a good position for the business is crucial. If you go the shopping mall route rentals are high, but prime positions offer an advantage that there is a lot of foot traffic that automatically creates awareness. The other issue to consider is that property owners usually require a big deposit upfront and often won’t conclude an agreement for a lease less than 3 years. A business of this kind needs passing traffic to ensure that it gains customers.
For example if a business is set in the middle of nowhere with little pedestrian traffic, customers will be low. But if the business is located in and area where there are a lot of younger people and schools, collages or universities, then there is a better chance of attracting the right customer, which means higher rate of sales and eventually growing a bigger profit for the business.
How will you create awareness in your target market? It is very important to know your market. You need to reach out to potential customers and find out what they are thinking. Do people need the product or service you are offering? If so, how many people need it? Which services are important to potential clients and which are not? What price would customers be willing to pay, and why?
The cost of market research
The cost of market research depends on how it is done. If you approach owners of similar businesses to gather data, it would not cost much except in terms of your personal time. You can run your own surveys and approach people and ask them relevant questions such as if they would be interested in using the cybercafé and what they would be prepared to pay and what they would expect to find in term of games and hardware.
Premises and Equipment
Buy or lease
When setting up this kind of business you have to decide whether it is better to buy or lease equipment. Computers eventually become obsolete. If you lease the hardware, you pass the financial burden of obsolescence to the equipment leasing company. With a lease, you have a pre-determined monthly payment, which can help you budget more effectively. Many small businesses struggle with cash flow and must keep their coffers as full as possible. Because leases rarely require a down payment, you can acquire new equipment without tapping much-needed funds.
Equipment leases generally require that the leasing company maintains the equipment and if their service isn’t good, it could be bad for your business. When you buy the equipment outright, you decide who will maintain it. If you go the lease route, make sure you understand how long the lease is for. Usually, leases for computer equipment run 24, 36 or 48 months. The longer your lease, the lower the monthly payment.
Check if the lease includes insurance. If not, make sure you insure equipment. Without adequate insurance, your business could be crippled. There are other costs that also must be considered other than rent, the lease or purchase of hardware and that is the money you will need for software, set-up costs for networking the hardware and overall insurance for the business.
Have you worked out what you’ll charge – what the market is willing to pay?
You should have a good idea of what you will charge for the services that you offer from the research that you have done through talking to similar players in the industry and by visiting their gaming venues. One of them most important details of working out your financials is to determine the break-even point. The break-even point is the volume of sales required so that the expenses of the business are equal to the income received. To work out your breakeven point you will need to establish your fixed costs and variable costs.
What are fixed and variable costs?
Fixed costs (or overheads) are costs, which you will incur regardless of your level of sales. Examples rent, electricity, rates, wireless access, interest on debt, insurance, repairs and maintenance, stationary, licenses, and salaries. Variable costs are typically goods or services sold sales commissions, sales or production bonuses, and wages of part-time or temporary employees.
The finer details of starting an internet café
What is an ISP?
ISP stands for “internet service provider”. An ISP is a company that collects a monthly or yearly fee in exchange for providing the subscriber with Internet access.
Choosing a provider
When looking for an internet service provider, your most important consideration is the type of access you need to run a successful internet café. You need to have the fastest service at the best possible price. To achieve this you will have to shop around. ISP services range in price according to the package offered and type of service. Dial-up is least expensive but slow, and perks vary greatly between ISPs.
Reliability is the single most important factor in choosing an ISP. Go for an ISP that offers services such as strong technical support and hosting. Choose a service provider that is known for excellent service and who updates equipment regularly. Some services providers offer a 30-day guarantee so that you have recourse if you are not happy.
Make sure that when you select a service provider, that there is a cancellation clause that is in your favour. Make sure you know exactly what is included in the package you sign up for.
Questions to ask
One of the best ways to test an ISP’s reliability and speed is to use the most comprehensive test – word of mouth. Ask these questions:
- How does the ISP address queries
- How responsive is the ISP’s tech support
- How long have you been with the ISP
- How often is the service unavailable
The responses to these questions should help you decide the ISP provider that’s best for you.
You can test ISP for performance and security simply by downloading and installing free applications which you can find on the internet such as PingPlotter. PingPlotter enables you to collect data to pinpoint where problems may be occurring. You can also test your ISP’s performance online
Talk to others in the same industry
Make contact with a business owner in a similar business. They’ll have a good feel for the industry and specifications that are needed, and can assist in terms of where to acquire skills, which suppliers you can trust and what you can expect to pay for software and equipment.
NETucation, one of South Africa’s leading experts regarding the Internet Cafe industry conduct workshops on how to set-up the Internet Cafe from scratch. Everything is covered in this eight-hour workshop from hardware, software, renting vs. buying, technical support, becoming a reseller, staff training, wireless hot spots, additional revenue streams, business plans, online marketing and more.
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.
How To Start A Farming Business
Keep these nine points in mind when launching your new farming business.
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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