There’s an entrepreneurial maxim that anyone starting a business should take heed of – make time to work on your business, not just in it.
In other words, you need to find a balance between the day-to-day activities associated with running your business, and the bigger, strategic thinking needed to steer your company in the right or desired direction. The former always seems more urgent. But without the latter, your business is likely to tread water when it should be making waves.
Before you open your doors, try to be as prepared as possible for the daily grind. This way, when you’re in the thick of it (sometimes it’ll feel like climbing Mount Kilimanjaro), you’ll still be able to step back once in a while and reflect on where your business is headed.
Here are 3 things to do before launching your small business.
Decide on the structure
Will you trade as a sole proprietor, or as a registered company? The path you choose will determine the preparation needed.
As the name suggests, a sole prop is better suited to businesses that are run by individuals. Under this structure, there is no separation between the business and individual, both from a liability perspective (your creditors can lay claim to your personal assets) and a tax perspective (your business income is incorporated into your personal tax return).
For these reasons, you are not required to register your business, which means less paperwork. Once your value of taxable supplies hits R1 million, you’ll need to register for VAT with SARS. And if you employ people, you’ll also need to register for PAYE, UIF, and potentially SDL. Of course, you can start out trading as a sole prop and register your business at a later stage.
However, there are several reasons to register your business from the start.
Incorporated businesses are generally seen as more trustworthy; it gives your business the opportunity to raise funding, and it creates a legal barrier between your personal assets and the liabilities of your business. The downside to these benefits is more paperwork, both upfront (registration process) and on an ongoing basis (auditing of annual financial statements).
VAT and employer registration work the same as they do for a sole prop, but you’ll also need a tax verification, tax clearance certificate, and a Letter of Good Standing from SARS as a registered business.
Confirm your name, place of business, and industry
Sometimes, there’s more to simple things than meets the eye. The name of your business, where you’ll operate from, and which industry you’ll operate in all need attention before you start operations.
We can’t help you find a name for your business (here’s a good resource for that), but we know what you’ll need to do once you’ve settled on one:
- Confirm that your chosen business name is available using Govchain or the like,
- Register a web domain that incorporates that name using GoDaddy or the like, and
- Register your trademark if you think it necessary, at the CIPC.
Choosing your place of business carefully is also important; try to keep your rental costs low, to begin with, and avoid getting tied into long lease agreements. If you choose to run your business from home, be aware of what’s allowed. Whichever address you settle on, it must be used when opening your business bank account, it must be reflected on all your invoices, and you’ll need to use it if/when you register your business.
The industry in which you work also matters. If you plan to operate in the security, building, construction, cleaning, or health and safety industries, you’ll need to register with the respective regulatory bodies (links to registration for each included). In some instances, licenses will be needed before you can start operating; in others, you might need a BEE affidavit or certificate to compete effectively.
Find useful software
It’s no secret that employing technology in your business can help you get more done without sacrificing quality. Thankfully, there are many affordable or even free programs that are suitable for small businesses like yours. We list a few options below (disclaimer: one of them is ours).
Office software: The ubiquity of applications like Outlook, Word, Excel, and PowerPoint makes a Microsoft 365 subscription the obvious choice for most businesses.
Accounting and payroll software: Invoicing, cash flow management, supplier payments, VAT returns, and paying employees can be done manually, but it’s time-consuming and prone to error and frustration. Sage provides solutions that substantially lighten the burden of managing these tasks, giving you a feeling of greater control and confidence.
Project management: Asana centralises all the information relevant to your business projects to make sure that nothing slips through the cracks. This tool will make your business more efficient to the benefit of your customer service levels, as well as your bottom line.
Communication: If you plan on building a team to support the growth of your business, then Slack can be used to foster the effective communication needed to rally team members around a common goal and improve collaboration.
Marketing: One of the most powerful tools available to any small business is email marketing. It can be used to build trust, acquire new customers, and keep your community up to date with your business happenings. Mailchimp provides a user-friendly platform through which to send emails.
Data visualisation: We all know how important data has become in the world of business. But in its raw, numeric form, its ability to influence is often limited. Tableau Public gives you the tools to visualise your data to tell a compelling story to potential customers, or to help you discover insights on which you can build a better business.
Learning: It can be difficult to take the time to learn anything new as an entrepreneur. And yet continuous learning is a hallmark of any great business leader. That’s what makes Blinkist interesting. Their app offers summarised versions of non-fiction books and podcasts, giving you access to big, inspirational ideas for your business with much less effort than was previously required.
Getting these ducks in a row before you start trading will give you room to think deeply about the strategic decisions that you’ll need to make to ensure your business succeeds. They’ll also help to reduce the pressures of your day-to-day operations once you’re all systems go.
What’s more, any costs you incur in this process can be used to reduce the taxable income of your business once it starts operating. Be sure, then, to keep a record of these costs, including the invoices and receipts (tip: accounting software will make this much easier).
Getting your business off to a good start will give you the momentum to break through the inevitable challenges you’ll face – and that outcome is more dependent on preparation than it is on luck.