Content In This Guide
- Bakery Basics
- Business requirements
- Operating a bakery from home
- Other costs
1. Bakery Basics
In South Africa there are an estimated 600 in-store bakeries in the major supermarket groups, 250 franchise bakeries and over 4 500 small independent bakeries. It is estimated that each South African consumes about 63 loaves of bread a year.
On average, one in three South Africans bake for pleasure and interestingly, all age groups enjoy this ‘pastime’. In terms of population groups, more South Africans of Indian origin bake for pleasure (45%), followed by whites (43%), coloureds (34%) and blacks (32%).
Related: Free Sample Business Plans
Start from home or from retail premises
You can start a bakery business from home or rent premises. It can also start as a part-time business. This is a good way to see how feasible and profitable it is before spending a lot of money on equipment and signing leases for premises. It’s a good business choice as there will always be a demand for bread.
There are no compulsory qualifications to run or own a bakery, but you need some training in the basics of baking and you can specialise in different areas such as bread, cakes or pastries. Enrolling for an environmental health course will be useful
What it takes to be a baker
To be a baker you need to be friendly, approachable and have good communication skills and attention to detail. You will also need management skills, the ability to plan, co-ordinate and delegate responsibility. Be prepared for long hours and early rising to get products baked and ready for the day’s business.
Don’t under estimate the power of good research
Research is very important, as you need to understand who your customers will be. However, it isn’t easy getting information and statistics about the people living and working in the area where you want to start the business. Do a survey of your own.
Talk to people in the area and ask them what they would buy from a bakery. If there are other bakeries in the area make it your business to get to know your competitors thoroughly so you can identify potential gaps in the market
2. Business requirements
Once you have decided on a business name and entity (CC, partnership, company, or sole proprietorship), the business name, and entity can be registered through CIPC.
The next step is to prepare a business plan. This must include a description of the bakery, the marketing plan, the management plan and the financial management plan.
Finding money to start
You may need to obtain financial support to start the bakery. Different sources of financial support include personal credit cards, savings, personal investments, a bank loan, government grants, small business loans, help from family, or an investment by an individual who is successful in the field.
Starting marketing the business as soon as you can
Generate interest in the bakery before opening by putting up a sign and distribute pamphlets as soon as possible. This way you can promote the opening by offering a special offer for opening day and promote the products you are planning to sell.
If you are planning to open retail premises, find a suitable building to rent or purchase. It is important that you check with the local municipality that the property is zoned for this type of business.
No business can sell prepared food to the public until they have a health certificate. During a health inspection the council will check:
- Sinks and tables in the food preparation area (these should preferably be of stainless steel, which is easy to clean and does not harbour dirt and bacteria)
- Ceilings, walls and floors (for cracks where bacteria might breed)
- Ventilation and lighting (to avoid damp and dark)
- Storage facilities like fridges and deep freezers (to ensure everything operates at the right temperatures – bacteria thrives between seven and 65 degrees)
- Clothing and equipment (such as headgear, overalls and gloves) to be worn by staff who prepare or handle food.
- Mixers and ovens depending on what you intend to bake
- Wrapping material, bags, boxes, etc. for customers buy goods to take home
- Cooling racks for the food
- Display cases so you customers can see all of the goods you have available.
- Baking dishes and pans in all different shapes and sizes.
- Mixing bowls to accommodate any job
- Chemical detergents and sanitisers to keep you kitchen clean and safe
- Various cutlery and utensils that you will need to make the baked goods
Look for local wholesalers for goods such as flour, sugar, eggs, milk, chocolate and other baking ingredients. Once you find a few, give them a call to check prices.
You can set up accounts with the wholesalers or pay cash on delivery. If you want a successful operation, do not compromise on quality. The cheapest ingredients may not have the quality you want.
Setting the right price
Ongoing costs, such as ingredients and raw materials, packaging and promotional expenses must be factored into your budget.
Prices should take into account things such as employee labour and the cost of the premises including rent and utilities such as water and electricity in addition to the cost of the goods used to make the finished product.
Related: Bakery Sample Business Plan
3. Operating a bakery from home
If you operate from home, the first thing you have to do is to make your home fit for producing and cooking commercial baked goods. This may include installing stainless steel worktops (from R5 000), a large fridge to store fresh and perishable goods (from R6 000), a possible upgrade of your oven and cooking appliances, and a range of specialist utensils for decorating cakes and creating breads.
4. Other costs
You might need a “bakkie” for buying supplies and making deliveries as the business grows. You will also have to consider insurance costs such as employers’ liability insurance for staff, as well as motor insurance for any delivery vehicles. You must also insure your premises and equipment against fire, theft and damage.
The Skills Programmes are divided into fermented goods (bread, rolls and sweet dough), chemically aerated products (cakes, sponges and scones) and pastries (choux, short and Danish). All the skills programmes are registered with the SETA; and contribute to the National Certificate in Craft Bread and Flour Confectionery Baking (NQF 2).
Anchor also offers courses in Baking Theory (Ingredients and Process – 1 Day) and Practical Bread faults (2 days). Learners on all courses receive practical hands-on tutoring and are lectured on the theoretical aspects of all products covered. Planning, preparation, hygiene, and safety are integral parts of all courses.
For a comprehensive list of bakery suppliers from cooling trays to sugar, visit the following websites for more information:
Want To Start A Property Business That Buys Property And Rents It Out?
Information on starting a property renting business.
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.
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:
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
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.
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.
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.
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.
How To Start A Brick Making Business
With the cost of building at an all time high manufacturing quality bricks at an affordable price can be a very successful venture.
Build it up, buttercup
Bricks proven reliability passes the test of time in any climate. Its insulating capabilities and passive solar heat retention make brick equally suitable for hot summers and cold winters. Nature creates the basic material used in brick manufacture. The weather and chemical reactions break up rocks producing fine-grained earth called clay.
Clay is workable when wet and can be moulded to any shape. A brick is made by wetting clay, pressing it into a mould, which creates blocks. These blocks are fired in a kiln until they are hard.
The process of making bricks generally consists of the following steps:
- Gathering, crushing, grinding, screening, and mixing the raw materials producing the brick
- The setting, drying, firing
- Packaging and inventorying is the final processing in the manufacture of bricks
Before you start manufacturing consider completing a business course.
Related: 21 Steps To Start-Up
This will be invaluable as you will learn about financial management, sales, marketing, understanding a balance sheet and more.
Prepare a business plan
It is very important to have a comprehensive business plan which should include your strategic focus, a marketing plan, operations plan, staffing plan and a financial plan.
Related: Download a Business Plan Here
A business plan helps to clarify objectives and spells out what you want to achieve in your business.
There are DIY Machines available in South Africa and there are easy to use brick-making machines at affordable prices, such as:
- A DIY Brick machine, making standard stock bricks from: R2 600
- Output per drop: 6
- Production per day: 3 000
Build for less using the Hydraform system
What makes Hydraform blocks different from a regular brick is that they are composed of soil and just 5-10% cement is needed in the mix, significantly reducing the cost per square metre. Because of the interlocking mechanism of the blocks, there is no mortar required in 75% of the structure.
Not only are the mortar costs for building decreased, but the use of unskilled labour is also maximised because the methods of building are simple and easily taught. In fact, only the plastering, painting, ceilings and foundation preparation need to be performed by a skilled person. Building with Hydraform blocks can be extremely fast.
Typically, a good Hydraform block layer with two block fetchers can place up to 500 blocks in a day. That would be the equivalent of 1 500 standard stock bricks in a day.
Hydraform head office offers local training in South Africa.
They offer two kinds of training: Training in a nearby block yard or training on any current Hydraform development.
Hydraform delivers clients’ machines and offers basic machine operation training at a nominal fee. In addition, training manuals accompany each Hydraform machine and technical advice is freely available.
One of the advantages of Hydraform brick making machines is that they are portable.
It means that the blocks can be produced anywhere, training can take place on the job and rural development is easier as the machine can be transported to remote areas.
Mobile building centres
Hydraform can also provide Mobile Building Centres that move from area to area, providing technical guidance and using communication aids to educate participating teams.
Locals can be taught valuable skills such as block production, block-laying and building process, quality control and machine maintenance.
Regular brick manufacturing
- Hollow brick making machinery 6 inch hollow: R11 168
- Output per drop: 4
- Production per day: 2 000
Why is Hydraform cheaper to produce?
The substantial cost savings are due to the use of freely-available subsoil which is the main raw material; the blocks do not require costly burning; transport costs are minimised since block production takes place on site; unskilled labour can be trained in both block-making and building with Hydraform blocks.
Environmental friendliness is a major feature of the Hydraform system; blocks are produced under high compression from subsoil, without the need for the fuel-wood used to burn bricks.
Contact Hydraform to receive an Information Pack.
Related: DTI Funding
How Does One Start a Petrol Station in South Africa?
How to become a supplier of fuel to the public.
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.
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.
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
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.
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
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.
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.
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.
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