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I am looking to sell herbal products to health shops. How do I find the target audience for health shops in SA, and how do I approach the finances?

Breaking into the health store industry.

Entrepreneur

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The first thing you should do is draw up a business plan.

To complete your business plan, you’ll need to thoroughly research your industry and your product. A good place to start would be contacting the Health Products Association of Southern Africa, the industry association in your sector.

Other things to consider include:

  • Do you know who your suppliers will be?
  • Your distribution channels?
  • Who is your competition?
  • Do you have a point of difference that will set you apart from the crowd?

When it comes to finance a good place to start is the small business division of your bank.

They will be able to steer you in the right direction and give you sound financial advice.

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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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 To Become An Airtime Supplier

You can make money as a cell phone airtime vendor.

Entrepreneur

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The question you have to think about is how much money do you want to make and will the turnover sustain your needs?

Related: Free Sample Business Plans

Nevertheless, this is a great way to start your own cellular business – first selling prepaid airtime and then adding other services such as prepaid Eskom electricity vouchers, a repair service and selling new phones to the community.

Virtual airtime sales through your PC

There are software programmes that you can install on a PC to sell airtime without having to order and buy stock. These systems work on a pre-paid basis.

Related: The Basics of Registering a New Business

When you deposit funds into the supplier’s bank account, your virtual account is credited as soon as the funds reflect in the supplier’s bank account.

Your margins are typically 5% to 10%, depending on the voucher provider. Accounts are viewable online and you would use a password for Airtime transactions. The online account shows all the deposits made, commissions paid and earnings from customers.

It also lists the names and cell numbers of your clients, plus all their deposits from which you will be earning commission.

Cellphone recharge

airtime-recharge

This is an efficient system where a client purchases pre-paid airtime by sending an SIMS to a server. The supplier will then reply with a pin number that becomes the virtual voucher.

One of South Africa’s well-known suppliers, Smartcall, has specialised in providing prepaid cellular services and products to South African mobile vendors since 1998. Today they are one of the largest distributors of starter packs and prepaid airtime to vendors in South Africa.

Through their packages, you can recharge your customers and yourself with airtime at up to 9% discount. Registration is easy and after paying a minimum of R100 deposit you can start selling Vodacom, MTN and Cell C airtime and Telkom PrepaidFone credit from any Vodacom cellphone.

Vending

You can also make money with your own prepaid airtime vending machine. Prepaid airtime vending machines work well in rural areas, blocks of flats, schools and at universities or collages.

These vending solutions enable vendors to offer customers pre-paid airtime from the convenience of a small electronic device.

For Airtime Vending machines – contact Kazang on their website.

You don’t need much capital to start this kind of business

There is nothing stopping you from buying airtime vouchers and paying cash for the vouchers and receiving cash in payment when you resell the vouchers.

You can buy airtime at a discount of up to 10% and resell it to your clients, friends, or family.

Contact Vodacom, MTN, Virgin and Cell C for more information, or become a pre-paid airtime and electricity vendor that you can arrange through a number of companies around the country like Kazang for example.

Funding-for-Black-Entrepreneurs-Free-EBook

Open a bank account

It is always best to have a banking account. It’s much safer and by having a bank account you can build a credit record which will be necessary if you wish to expand your business later on.

If your business grows you would have to register your business declare your income earned from the business to the South African Revenue Services (SARS).

Related: How to Approach Your Bank for Funding

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Start-up Industry Specific

How do I start a radio station?

A information filled guide to starting a radio station.

Entrepreneur

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Broadcasting in South Africa is regulated by the Independent Communications Authority of South Africa (ICASA), which issues broadcast licenses; ensures service and access; monitors the industry and deals with disputes; controls and manages the frequency spectrum; and protects consumers from unfair business practices.

The Licence

Types of licences

In the past 10 years, 94 community radio broadcasting licenses and 10 commercial licenses have been awarded in South Africa.

Each radio station is aimed at a specific market which means that there are only a certain number of consumers it can reach with its advertising. A station which reaches a larger consumer audience can charge more for its advertising rates.

In South Africa there are three types of radio licences:

  • PBS (Public broadcasting)
  • Commercial
  • Community

“It isn’t too difficult to get a community broadcast license, but the station has to be of interest to a specific community broadcasting information specific to a community like religion,” says Neil Johnson, Kaya FM programme manager.

How to apply for a licence

This year the Electronic Communications Act changed regarding frequency regulations.

“The Act now makes allowance to create your own frequency. Once you have the frequency you can apply for the license. As long as the application fits into a community of interest i.e. religion or has the right geographic footprint, a community license will be granted”, says Cathy.

“The cost to submit an application is R3000 which is non-refundable and you have to submit 26 copies to ICASA. In real terms the application costs a lot more because of the research and work required to complete the application. If you have never been in radio you have to learn the process and completing the application forces you to learn the process.”


How to Register Your Radio Station as a Business

Find out everything you need to know about registering your new business with the Companies and Intellectual Property Commission.


Music rights

In order to broadcast music it’s necessary to register with the Southern African Music Rights Organisation (SAMRO).

It was established to protect the intellectual property of composers and authors, as well as to ensure that composers and authors are adequately remunerated both locally and internationally for music usage.

The cost of music usage is based on the income of the radio station.

The Equipment

Where to source radio station equipment

“Before buying radio broadcast equipment first apply for a broadcast licence which you can obtain through ICASA.

The cost of equipment to set up a fully functioning radio station costs between R450 000 and R1.5million.

At the moment there is no available frequency in the Johannesburg area, but things might change when the digital system replaces the analogue system”, says Russel Jones, Systems Engineer for BNI.

Here are some of South Africa’s most established suppliers:

BNI

BNI has 21 years of technology experience in Africa, and over 100 years of accumulated experience in the broadcast and telecommunication industry. They offer consultation services and work closely with clients in order to meet their studio and transmission requirements.

Related: Start-ups: Creating A High Tech/High Touch Environment

They also assist clients with licensing and regulatory obligations, geographical surveys, propagation surveys, and prediction and interference studies. “For example when you set up a radio station you have to select a high site in order to get a signal, this is where our expertise fits in”, advises Jones.

EMS Africa

Enhanced Media Systems Africa are distributors of essential products for the music, studio and broadcast markets. They specialise in broadcast and recording systems and offer a comprehensive range of broadcast solutions – from a community based radio station to network radio and TV environments.

SoundFusion

Sound Fusion has 25 years accumulated research, development and manufacturing of professional broadcast equipment. Most of the equipment is made in South Africa. They offer the sale and installation of radio equipment.

Related: No Money to Start a Business? No Problem. Try These 5 Options

SoundFusion also offer training courses which are designed to give learners an understanding of the professional audio environment and to provide them with sufficient skills to play a useful role working in the live sound, recording or radio studio industries.

Your Options

Commercial Radio Stations

There are a number of commercial radio licenses which will be available up until the end of September 2009.

For example, applications for Capital Radio’s broadcasting license are open until 30 September. In order to get a commercial license, you have to apply to the Independent Communications Authority of South Africa (ICASA).

According to a recent Bizcommunity report, “The Independent Communications Authority of South Africa invites interested parties to apply for the Capital Radio commercial broadcasting license to serve the eastern coastline of KwaZulu Natal and the Eastern Cape.”

Costs of set-up

The Department of Communications has put a price tag of R6 million to be paid by the successful broadcasting license applicant. The license is valid for 6 years from the date of issue. This gives a very good indication of the cost of equipment when setting up a commercial radio station.

“However, one cannot buy equipment to start a radio station until a license has been granted. In South Africa licenses are very hard to come by as there is so little frequency left,” says Cathy Kaler, director of ChaiFM 101.9 which was granted a community broadcasting license in 2007 and began broadcasting at the end of 2008.

There are fixed expenses to cover such as equipment, technical assistance and rent. A community station such as ChaiFM 101.9 runs with a volunteer staff. “Community buy-in was crucial to our success. We do our own advertising which has been incredibly useful as we understand first-hand what works and what doesn’t.”

Community radio stations

There are an estimated 10-million radio sets in South Africa, with listeners many times that number. The country now has over 90 community stations, who broadcast in many different languages. Examples of Community radio stations are:

  • 906 FM Vaal Radio
  • Bay FM
  • Bush Radio
  • Campus Radio
  • CCFM

How to qualify as a community radio station

To qualify as a community radio station the business has to be registered as a Section 21 company or as a Trust.

How do you reserve and AM or FM frequency?

The best way to find out which frequencies are available is to contact ICASA.

Broadcasting in South Africa is regulated by the Independent Communications Authority of South Africa (ICASA), which issues broadcast licences for AM, FM and MW. This body controls and manages the frequency spectrum.

To reserve a frequency

“At the current time there are no FM or AM frequencies available in the Gauteng area, says Tshifularo Sigwavhulimu”, Radio Frequency Specialist at ICASA.

But there is good news. ICASA will shortly be making available a number of AM frequencies to anyone, meaning commercial or community stations, this year. “At the moment we are not sure when we will be issuing invitations to apply for licences, but it will be during 2010,” explains Sigwavhulimu.

In order to receive notification that applications must be submitted email tsigwavhulimu@icasa.org.za as soon as possible so that you can be notified via email to submit your application in good time.

Finding a frequency

During 2009 the Electronic Communications Act changed regarding frequency regulations regarding community licences.

Related: The Basics of Branding Your Station

“The Act now makes allowance to create your own frequency.  Once you have the frequency you can apply for the licence. As long as the application fits into a community of interest i.e. religion or has the right geographic footprint, a community licence will be granted”, says Cathy Kaler, director of ChaiFM 101.9.

Revenue Sources

How does a radio station generate revenue?

There are three ways that a radio station can earn revenue.

Radio stations earn most of their revenue through advertising. Most stations earn from the 30 second spots which are aired throughout the broadcast.

The second form of revenue is earned through non- traditional methods which include:

  • Promotions
  • Events
  • Competitions
  • Giveaways
  • Sponsorships

Lastly, radio stations can earn revenue through ad sales on digital platforms such Internet broadcasting through streaming audio and also the station’s own Internet website, e-mailers and SMS campaigns.

Did you know?

In the US during 2003, revenue from “online streaming music radio” was $49 million. By 2006, that figure rose to $500 million. In 2007 a survey of 3 000 Americans (released by Consultancy Bridge Ratings & Research) showed that 19% of U.S. consumers 12 and older listen to Web-based radio stations.

Related: How To Survive 150 Straight Rejections

This means that there are around 57 million weekly listeners of Internet radio programmes. One in seven aged 25-54 listen to online radio each week and more people listen to online radio than to satellite radio, high-definition radio, podcasts, or cell-phone-based radio according to Wikipedia.

Prefer Digital?

Where to find internet radio stations

The wonderful thing about Internet radio services are that they are usually accessible from anywhere in the world – for example, one could listen to an Australian station from Europe or America.

Some major networks like Clear Channel in the US and Chrysalis in the UK restrict listening to smaller areas because of music licensing and advertising concerns.

The most common way to distribute Internet radio is via streaming technology.

The cheapest way to start a radio station is to broadcast through the internet.

If you want to start your own radio station and don’t have much capital, it isn’t too difficult using the Internet. You need a computer with a large hard drive, some spare dedicated bandwidth, and a good sized collection of music.

There are sites such as Poromenos, Shoutcast or TechCrunch which offer tutorials on setting up internet radio streaming. Depending on your level of technical expertise and the tools available to you, you can either setup your own server, or find a hosting solution from a third party.

It’s quite possible to start an Internet-based Radio station that operates for the purpose of profit and generating re

How to locate internet radio stations in South Africa

Use a specialised search engine to track Internet streamed radio stations. One such tool is Streamfinder.com. This search engine has been running since 2005 and its main aim is to assist users in finding streaming internet radio stations from all over the world while at the same time assisting these radio stations in promoting their names amongst potential listeners.

By visiting www.streamfinder.com you can use their search bar to find an internet radio station by typing in a specific keyword, country, genre or even artist name if you know it. The website will them provide you with a number of listings that matched your search.

By clicking on the various options you will be taken to a page that will provide you with a brief description of the station and what you can expect as a listener. If you would like to listen you can click on the image of their website which will take you to their site so that you can begin streamlining and listening to your favourite station.

A few examples of South African internet radio stations include:

1. Student Radio.

This is site promotes a number of student radio stations such as TuksFM and UCT Radio and ensures that all students are catered to with regards to the latest local and international music right from their computers. Their website also provides listeners with event and gig guides as well as celebrity news from around the world. www.studentradio.co.za

2. Rhythm 100 Radio.

This urban radio station broadcasts throughout the day and night and brings African, hip hop and R&B music to their listeners. www.rhythm100radio.com

3. Radio Veritas.

This online streaming station caters to catholic listeners from all over the country. Their shows are broadcasted on a daily basis, well into the evening. www.radioveritas.co.za

4. Sound Republic Web Radio.

Derek the Bandit is the creator of this website which offers a variety of music options including a 24/7 streamlining radio station and a variety of podcasts. www.soundrepublic.co.za

 For more information

Unesco has released a free downloadable book which goes into the operational detail of starting your own community radio station. Topics covered in this book: Facilities, management, installation of equipment, financing and securing the broadcast license.
www.icasa.org.za

Related: Enterprise Development Programmes For Black Entrepreneurs

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