Two out of three companies (of all sizes) begin in a spare bedroom, garage, basement or sometimes even a bathroom. That’s how companies as diverse as Apple Computer, Baskin-Robbins ice cream, Hallmark cards and Mark Shuttleworth’s Internet security company, Thawte Consulting, began.
If you want to operate from your home, either permanently or temporarily, here are some things you must consider:
1. Firstly, is it legal to do so? This is one of the many possible restrictions on your being allowed to make your home a working castle. Whether and how flexibly you can operate a business from your home is covered in local zoning ordinances and also by the codes and restrictions of body corporates, home owner associations and the like.
2. How are you going to separate your home and your workplace? While the demanding hours required to start any business affect an entrepreneur’s family, when you bring the workplace into the home, your family’s needs must be taken into account even more.
3. How are you going to establish and maintain a professional image? This is especially important if your address is on Cow Path Lane, your dog loves to bark or your teenager loves to play his drums in the room next to your home office.
Most cities have zoning ordinances that limit, to a degree, whether you can operate a business from home. While many communities have modernised their zoning ordinances to recognise that a computer-based business isn’t like a noisy auto body repair shop, an odorous hair salon or a 6am gathering point for a construction or cleaning crew, many communities ban certain kinds of businesses and prescribe limitations that may limit some businesses.
Here are some common activities communities don’t like and may restrict within their zoning code:
- Increased vehicular traffic, both moving and parked on the street
- Prominent signs
- Employees not related to you who are working in your home
- Use of the home more for business than as a residence (determined by the percentage of space used for the business)
- Selling retail goods to the public – sometimes communities limit this to specific hours
- Storing dangerous amounts or kinds of materials inside or outside your home
So, if you’re planning to launch your business from home, the first thing to do is to check out what commercial activity your city allows in your neighbourhood. While many people blithely ignore zoning, a complaining neighbour can put a real kink in your business plan, as you may find yourself with a cease and desist order and have to suddenly move or close down.
So find out what you’re allowed to do, and get along with your neighbours. With their support, you may be able to get a waiver of restrictions, called a variance or conditional-use permit. Since most people who operate a home business have a family, keeping personal and work spaces separate is critical to peaceful domestic relations.
So location is the first thing to think about when you’re planning where your home office will be. If you can have your office in a separate structure, like a garage or a guest house in the backyard, you probably need to think no further.
What are the do’s and don’ts of securing an online domain name?
We asked Domains.co.za founder, Wayne Diamond, what the do’s and don’ts are when it comes to entrepreneurs registering domain names for their start-ups…
There’s that L-word again:
“Location, location, location”. It’s the make or break decision. Every estate agent and business owner cannot overemphasise the importance of this Critical Business Decision Number 2 (Number 1, of course, has to do with what you’re going to sell!).
Whatever business you’re in, being close to customers and convenient to business partners and suppliers is essential. That bricks-and-mortar wisdom is equally true in the world of online commerce. Having the right domain name and the right support for your online presence has emerged as a real driver of success.
Some figures put the scale of the opportunity into perspective: US e-commerce is predicted to reach $440 billion by 2017, showing a compound annual growth of 13.8%. While the Internet economy is in its infancy in South Africa and Africa, it is growing strongly: research by World Wide Worx showed that consumers, small and medium businesses and government were already purchasing products and services worth R59 billion on the web three years ago.
So how to secure the best and most profitable Internet real estate to make sure your business can ride the e-commerce wave?
It’s all in the name:
The first decision is what domain to use. One of the exciting developments is the launch of new Internet domain names, so it’s definitely no longer a choice of .com or .co.za. The proposed dotAfrica (.africa) geoTLD (geographic Top Level Domain) is one option that’s set to come online around the first quarter of next year, but what about the ZAdotCities domains of .joburg, .capetown or .durban? Domain names within these additional geoTLDs will be able to be snapped up by the public around November this year.
While .com remains a good choice for truly international businesses, choosing a domain name with some local flavour is probably going to work well for many companies.
The greater range of domain names also makes it more possible that you will be able to choose the right name for your business. When it comes to the more established domains, like .com or .co.za, chances are higher that the name you want has already been taken.
When it comes to that all-important name, received wisdom used to be that short was best, but the trend nowadays seems to have reversed—even phrases are now used. The key is to choose a name that is easily recognisable, that will stick in peoples’ minds and that describes the business well.
Perhaps a good example is the domain used by the writer of this article: www.domains.co.za is both a brand name and a name that perfectly describes the nature of the business. At just seven characters in length, “domains” is also an easy to spell, easy to remember word – keeping names under ten characters is guaranteed to help audience recall.
Something people will remember easily is absolutely vital.
Some companies use specific names for individual campaigns, but always make sure the business as a whole has its own web address.
Experience has shown that it’s probably worthwhile to register similar domain names to the one you choose, just to keep competitors from taking them in an effort to sow confusion.
My final advice: it’s always a good idea to use an ISPA (Internet Service Providers’ Association of SA) member to help you register the chosen address of your start-up. That way you’ll be sure that all the formalities are correct, and that the company you’re dealing with abides by ISPA’s code of conduct.
Finally, as there are already almost 950 000 .co.za domains registered, it’s a good idea to surf to www.domains.co.za and perform searches to see if the domain you would like is indeed available.
 Chuck Jones, “Ecommerce is growing nicely while mcommerce is on a tear”, Forbes, 2 October 2013, available at http://mashable.com/2013/02/05/ecommerce-sales-top-1-trillion-worldwide/.
 “Internet 2% of SA economy”, 29 May 2012, available at http://www.worldwideworx.com/internet-2-of-sa-economy/.
How to protect your business idea when sending them to financial instituitons?
Signing an NDA, is it necessary?
How can I protect my business idea before I submit my business plan to financial institutions and other agencies for help?
You have a few options:
Firstly, you can include a disclaimer as an introductory clause, saying that any and all information contained in the business plan and related documents remain the Intellectual Property of xxx (your name) and may not be reproduced, copied or used in any manner without express written consent. This is not legally binding, but usually enough.
Secondly, you could ask them to sign a non-disclosure agreement, which is more binding from a legal perspective. The downside of this is that it can come across as arrogant, especially from someone who is approaching us for help. Personally I refuse to sign any NDA from clients who approach me for help, it just smacks of mistrust and arrogance.
On a final note, good ideas always get copied. If you are that worried that your idea will be stolen, you may need to re-look at it and find ways to make it difficult to replicate, or better yet, make sure you are first to market.
Does the South African government award grants to franchisees?
In my experience, unless you as the entrepreneur have some ‘skin in the game’ and a reason to get up and make the business work every morning, it seldom will.
I am considering purchasing a children’s education franchise and wanted to know if the government offers grants. The cost of the franchise is R 86 000. If so what are the criteria to qualify and how does one go about it?
Accessing grant funding for a franchise may prove challenging, unless that franchise is registered and accredited, in which case there is a fund that may consider it – see CNBC for more info.
Otherwise, you could look at www.investmentincentives.co.za and see if any of those sources of financing are of interest. It naturally depends on your own PDI (previously disadvantaged individual) status as many of these funds are focused on youth, women and PDI’s.
Finally, on an emotional level I would caution against going all out for grant funding and not loan finance. In my experience, unless you as the entrepreneur have some ‘skin in the game’ and a reason to get up and make the business work every morning, it seldom will.
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