To give you an overview of the competitive marketplace, we’ll take a look at the various faces and configurations of selling to the consumer.
Keep in mind that all these enterprises began as a simple concept and grew to various proportions through popularity and perseverance. At this point in your exploration, anything is possible for you, too.
1. Shop retailing
The retail scene in South Africa is a dazzling array of independent shops, department stores, discount enterprises, corner cafes & national and regional chains, conventional supermarkets, and other large-scale enterprises that seem to dominate the retail sector.
Shop retailers operate fixed point-of-sale locations designed to attract a high volume of walk-in customers. In general, shops have extensive merchandise displays and use mass-media advertising to attract customers.
They typically sell merchandise to the public for personal or household consumption, but some also serve business and institutional clients.
These include establishments such as:
- Office supply stores
- Computer and software stores
- Building materials dealers
- Plumbing and electrical supply stores.
2. Specialty retailing
While power retailers like Pick n Pay or Checkers tend to sell “needs”, specialty retailers tend to sell “wants”. They focus more on neighbourhood convenience, the richness of the shopping experience, and inventory that meets the needs of their target customer on a personalised basis.
Small shops show surprising strength and resilience in the face of competition from large-scale retailers and e-commerce outlets. They offer the consumer a warmer atmosphere, and perhaps a broader and deeper selection of merchandise. Many shops can be owned and operated by one person with minimal assistance.
Compared to manufacturing operations, specialty retail outfits are relatively easy to start both financially and operationally. However, a number of failures are due to under-capitalisation, poor location and insufficient market analysis.
3. Non-store retailing
Home-based businesses are primarily engaged in the retail sale of products through television, electronic shopping, paper and electronic directories, door-to-door selling, in-home demonstrations, portable stalls, vending machines, and mail order.
With the exception of vending, these businesses do not ordinarily maintain stock for sale on the premises. There are many advantages to this type of retailing – one being that buying, maintenance and protection of a large stock is not necessary as you contract with others to handle these matters.
4. Mail order
From glossy wish books to basic brochures, catalogues are popular with those who live far from shopping areas, in rural areas, and those who simply hate to shop. With direct mail, sales materials can be sent to thousands of potential customers at one time to either make a sale or generate a sales lead.
Mail order enterprises include general merchandise businesses, companies that sell specialty goods of all kinds, such as CDs, DVDs, books and so on. You can work out of your home, a warehouse or a shop.
An up-to-date mailing list is the key to direct-mail profits with back-end fulfilment and relational database support. If you think this is the retail area for you, read our extensive how-to on mail order for more information.
5. The internet
The internet has changed the retail landscape, connecting companies, markets and individual consumers. When you look at the array of business opportunities in retailing, be sure to include the internet.
The South African online retail market for 2009 is estimated to be worth around R1.6 billion, says Arthur Goldstuck who heads World Wide Worx which conducts industry-relevant market research on trends in information technology, telecommunications and the strategic business.
“The retail internet industry is growing annually between 20 and 25 percent”, says Goldstuck. Each type of retailing has strengths and weaknesses, so you decide which approaches you want to use in your business. For more information visit world wide worx.
6. Vending machines
Automatic merchandising – or vending machine retailing – has been a proven business concept for more than a century. Vending Times, a trade magazine in the US, reports that snacks and soda sales in that country alone totalled more than $20 billion in 1999.
As with any other sales venture, having the right product in the right place at the right time is key. This business is highly appealing because of the low start-up cost, low working capital and low overhead. This is a cash business, with you collecting the money when you replenish supplies.
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)
Ready to get going? Here’s 10 Steps to Start Your Business For Free (Almost)