As with any business venture, having the right product in the right place at the right time is key. Vending is highly appealing because of the low start-up cost, low working capital and low overheads. This is a cash business, with you collecting the money when you replenish supplies which must be done frequently.
Location is very important
The key to a successful vending machine business is selecting the right location. A good location not only requires lots of foot traffic, it must be visible to passers-by and easy to access. The location should also be within easy traveling distance from where you live. Once your sites are up and running, you will be required to keep them stocked with products on a regular basis. At the same time you will “cash” the machine.
A well stocked and maintained machine, on average, makes a profit of around R1500 per month. For example if you run five machines a month you could generate a profit of R 7 500 a month and 10 machines could generate up to R15 000 a month.
Profitability depends on foot traffic. The best location combines visibility, and the right choice of product. Factories, offices, hospitals, schools and universities would all benefit from having a snack/cooldrink vending machine on their premises.
Many businesses see snack vending machines on their premises as an advantage as this often reduces the amount of absenteeism whilst employees go to shops for a snack during working hours. According to the Vending Association of South Africa, “Approximately 10% of all the people on a site will use a vending machine.
These clients will not necessarily only buy one item, such as a can of a soft drink, but also a packet of crisps and maybe even a chocolate… generating three sales. Thus a site of 100 people may generate anything from 10 to 30 sales per day.
This once again is not a hard and fast rule. There may and will be sites with 50 people that generate 100 sales per day, while there may be sites with 200 people that only generate 30 sales per day”.
A good vending machine supplier must offer:
Training which should include training on mechanical aspects of the equipment, how to adjust the coin mechanisms and taught how to carry out routine service and repairs.
- Delivery and set-up of machines
- Assistance with financial applications
- Full technical support and backup
- Product selection and the right to purchase stock from any supplier (so you can shop around for the best prices
Contact the Vending Association of VASA for guidance. They do not trade, sell machines or products, but provide advice, know how and suggestions free of charge, totally unbiased as a service to the Industry and to those interested in Vending.
The renting option
If you cannot raise enough money to buy your own vending machines you can rent them. There are other companies who offer rentals. Vendtec located in Gauteng offer a rental programme from R500 per month per machine.
Raising enough money to buy machines
If you do not have any collateral and are unemployed, it will be difficult to find finance. Banks won’t lend money unless you have some form of security in the form of investments, property, or insurance policies. Some of the larger Vending companies offer their own finance programmes and maybe will to help.
For more information
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How Do I Start A Security Company In South Africa?
There are two kinds of security companies, one that sells products and one that sells services or you can combine both.
To start a security service company in South Africa you must register with the Private Security Regulatory Authority (SIRA). There are two kinds of security companies, one that sells products and one that sells services or you can combine both. It is estimated that the private security industry in South Africa employs over 400 000 individuals.
If you’re looking at starting a security guard company in South Africa, the following guide will be able to assist you in the deciding if it’s the right decision for you.
You need a lot of capital
Starting a security business requires a good deal of capital outlay and it’s highly recommended that one should have a background in this field.
Decide what kind of company you want to start
There are two kinds of security companies, one that sells products and one that sells services or you can combine both. Each sector falls under its own regulatory body.
What about area competition?
Greg Margolis is the CEO of NYPD Security, a niche security company that has operated for the last five years in the leafy northern suburbs of Johannesburg.
“To run your own security service company I think that you have to be well rounded in terms of not just being a good business person, but you also have to be a people person, a marketing person and know a good deal about the business.
“There’s tough competition, but I love what I do and wouldn’t sell my business even if I was offered triple what its worth. I am passionate about what I do”, says Margolis.
Starting a Security Services Business
To start a security service company in South Africa you must register with the Private Security Regulatory Authority (PSIRA). This includes paying a registration fee of R2 280 and writing an exam. Once you have passed the exam, proved that you do not have a criminal record, SIRA will conduct an inspection to establish whether or not your business meets the infrastructure requirements. A further fee of R1 710 is charged for the assessment. Each year the business is re-accessed which costs a further R500 plus the annual renewal fee or R520.
The following documentation is required for registration:
- An authenticated copy of the CM1, CM2, CM27, CM29, CM31 and CM 46 (apply at Registrar of Companies or Attorneys), if the applicant is a company;
- An authenticated copy of the Partnership Agreement if the applicant is a partnership;
- An authenticated copy of the trust deed and the letter of authorisation to the trustees from the Master of the High Court if the applicant is a business trust
- The Suretyship form (SIRA 4) to be signed by the natural person who has taken full responsibility of the security business
- Every director, member, partner (as the case may be) applying for registration as a security business must have successfully completed, at a training establishment accredited in terms of law, at least, the training courses Grade E to B
- An authenticated copy of the Tax Clearance Certificate from the South African Revenue Service (SARS)
- An authenticated copy of the VAT Registration Number from SARS.
- An authenticated copy of the PAYE number from SARS
- An authenticated copy of the COID number (Compensation for Occupational Injuries & Diseases) from the Department of Labour
- Sufficient information in writing to enable the Authority to ascertain that the applicant security business meets the requirements with regard to the infrastructure and capacity necessary to render a security service;
This include, inter alia, the following:
- Submit a business plan to the Authority including the location and activities
- A resolution by the applicant security business stating that it will be able to operate for the next year
- The applicant proves that it has an administrative office that is accessible to the inspectors of the SIRA
- The applicant must have equipment which is necessary for the management and administration of the security business, e.g. fixed telephone, fax machine, a hard copy or electronic filing system for the orderly keeping of all records and documentation
- Show that the affairs of the applicant security business are managed and controlled by appropriately experienced, trained and skilled persons
- The applicant security business has at its disposal a sufficient number of registered and appropriately trained and skilled security officers for the rendering of a security service for which it has contracted or is likely to contract
- The security officers must be properly controlled and supervised
- The applicant security officer has at its disposal sufficient and adequately skilled administrative staff members for the administration of the affairs of the applicant
- The business must have has all the necessary equipment, including vehicles, uniforms, clothing and equipment that must be issued to its security officers
- The applicant security business is in lawful possession of the firearms and other weapons that are necessary offer security services in respect of which it has contracted.
Related: Get going with a One Page Business Plan
The most important thing you can do to start and operate your own business is to develop a good business plan.
It’s invaluable because the business plan forces you to come to terms with your business. Selling the business concept seems to the problem, said Margolis. These are his five tips that will help to get the business going.
“The security industry in South Africa is very competitive. You have to get out there and you have to keep knocking on doors, there isn’t an easy solution”, explains Margolis.
1. Look at your business plan and decide if you have a competitive advantage. If not, work out how you can make the market understand the unique value your small business has to offer.
2. It is important to make yourself known. It isn’t difficult or expensive to increase awareness about the business. Attend ratepayer meetings, spend time at the local police stations, and attend meetings the police have with residents and businesses in the area. This way people get to know you and respect you and half the battle is won. Networking is the way to go.
3. It’s my experience that bigger companies are reluctant to give security contracts to a company that is a one-man show. Make sure that you have a structure in place. Clients need to know if something happens to you, the business will not fall apart, and the services they have paid for and you have agreed to supply, will not cease. Clients need to understand that besides experience, that you are credible and that all the checks and balances are in place. This must be one of the key selling points.
4. Consider taking on a partner. Choose a partner who has the attributes that you lack. The ideal partner would be one with strong links and contacts in the community that you want to work with. Let your partner control the selling side while you handle areas you’re strong in, such as expertise and service delivery. The other option is to employ sales staff.
5. Stay abreast of new trends in the field, and update your skills. This is something that I strongly believe in. You have to be well rounded in terms of not just being a good businessperson, but you also have to be a people person, a marketing and sales manager and know a good deal about the neighbourhoods you work.
Are you new to starting a business? Read 15 Things Every Newbie Needs to Know About Starting a Business
What are the requirements to start a security product supplier business?
If you are starting a security company that sells electronic alarm systems and other security products it’s wise to become a member of SAIDSA in order to provide your business with the credibility it needs to be taken seriously by the public and security service providers.
The objective of SAIDSA is to upgrade the quality and standards of electronic security and to protect the public from unscrupulous, “fly-by-night” operators. When a security system is purchased, an ongoing relationship is entered into between the purchaser and the security service company concerned.
The security service product supplier must have the infrastructure and the required expertise to support the relationship continuously.
Security Sector Regulatory Bodies
The security industry has established a number of bodies to regulate itself. Membership in these bodies is voluntary. They include:
- Security Association of South Africa (SASA), whose membership is open to companies offering any type of security service
- South African National Security Employers Association (SANSEA), an employers association for companies in the security industry.
- Electronic Security Distributors Association (ESDA), an association of importers and distributors of electronic security equipment
- South African Intruder Detection Services Association (SAIDSA), an association of companies providing alarm monitoring and armed response services
- Safety & Security Sector Education & Training Authority (SASSETA)
- Vehicle Security Association of South Africa (VESA)
Ready to get going? Here’s 10 Steps to Start Your Business For Free (Almost)
How Do I Start A Transport Or Logistics Business?
An all in one guide to starting a transport and logistics business.
Thinking about starting a transport business?
Forecasts indicate that the demand for freight transport will grow in South Africa by between 200% and 250% over the 15 to 20 years.
Some corridors, (high volume transport routes that connect major centres), such as the corridors between Gauteng and Cape Town (which amount to 50% of all corridor transport) will increase even faster.
The scope in the transport and logistics industry is varied – from a one-man show using a small truck to transport goods and offer services, to a fleet of transport vehicles which travel the length and breadth of South Africa’s roads.
Road transportation includes commuter transport from taxis to bus transportation.
It can be a tough industry and there are many threats facing transport businesses but if you get it right, you can build a successful business.
What is covered in this guide:
- How to start your transport and logistics business
- How to get funding for your transport business
- What are the costs involved
- Finding customers and getting transport contracts
- Getting onto suppliers lists
- Buying trucks and employing drivers
- What are the regulations and risks
- Where to find guidance to start your business.
Ready to get going? Click the arrow button to learn how to start your own transport business.
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