How to become a profitable small business in South Africa
Business in Africa is a-buzz and the South African landscape offers many different opportunities to small business owners.
If you are planning on moving to South Africa to start your business you will need to have business and work permits in order. If you are a South African citizen you must register the company within the first 21 days of it being operational at the South African Registrar of Companies (foreigners will need to do so once their permits are in order). If your business has to do with food or health you will need to register at your local authority as well.
Broad-based Black Economic Empowerment (B-BBEE)
To be considered a legitimate business in South Africa you need to be B-BBEE complaint. This means you must agree to pay a certain percentage of your revenue to the South African Revenue Service which will fund skills and development building in the country. This is to rectify the inequalities that were present in South Africa’s past.
B-BBEE for Start-up Small Businesses
This Act does take the struggle of starting a business into consideration and are deemed Exempted Micro Enterprises (EMEs). These businesses are exempt from the BEE scorecard until the business makes R10 million or more in turnover annually.
B-BBEE for Growing Small Businesses
Qualifying Small Enterprises (QSEs) are businesses that make more than R10 million turn-over every year but less than R50 million. The B-BBEE is usually introduced by employing and training black staff and buying from BEE certified suppliers in support of black owned businesses and black communities.
With these elements in place your business will be free to grow further than the R50 million mark. Then you will be given the Generic Enterprises BEE scorecard.
Before your business gets too big for you to handle you may want to consider letting someone else handle the logistics of your B-BBEE requirements for you. All you have to do from there is focus on building a business that will allow South Africa to grow alongside it.