The Complete Checklist for Starting A Business
South Africa is known for its many inspiring and prosperous start-up companies and entrepreneurs. Starting your own business has many rewards, but unfortunately for some, the journey ends with the idea of being an entrepreneur because the process of launching a business may seem too daunting or complicated. However, with the proper guidance and support, it is manageable, and you can give your business the best chance for success.
Generate a business idea
Many successful businesses begin with a single good idea. However, once you’ve come up with a potential concept, it is essential to test its viability, ask for honest feedback from various parties and do your market research. Do you have something unique to offer, are the people you are targeting willing to spend money on your product or service, and do you have the skills and experience to pull it off?
Have a good business strategy
When you’ve settled on your creative business idea, you need to flesh it out in detail and build a solid business plan. This usually includes aspects like your mission/vision, the amount of capital needed, skills required, procedures needed, products or services to be provided, understanding your competition, understanding your target market and what will make your business stand out. Make sure you have answered the questions we cover in our blog on starting your own business.
If you don’t have the capital to start your business from scratch, one can look at alternative ways to get funding. Options are approaching a financial institution, applying for funding from the private sector or even applying for various types of government funding through the Industrial Development Corporation or the Department of Trade and Industry’s Government Investment Incentives.
Choose a name and register a domain for your website
Choose a catchy and distinctive name for your business that has not yet been registered. You can also look at securing the domain name of your business (an easy-to-remember address to access your future website) so that you can launch your website together with your business. This will give your business a digital presence and credibility, reserving your space online when you are ready to go live.
Register your new company
Regardless of the size of your company or your profit, there are legal advantages to registering your business in South Africa. These include business name protection, tax incentives, financial assistance and business compliance, asset protection and the ability to raise equity capital, and will simplify admin processes. You can register your company as either a non-profit -, profit-, personal liability -, public – or private company.
Get a tax number
All businesses must be registered with the South African Revenue Services (SARS) and comply with their regulations. Once you register, you will be given a tax number for your company. Registration must be done within 60 days after starting operations.
Get a VAT number
Most start-up companies won’t need to pay VAT until their income exceeds a specific profit margin or turnover (R1 million in a 12-month period). It is not essential to register for VAT immediately, but a company can voluntarily register for VAT if its income exceeds R50 000 over a 12-month period. This could be to your advantage while also benefiting any VAT registered companies you work with. Ideally, you should register your business for VAT before starting trading to be legitimate and tax compliant regardless.
Ensure you have operating certifications and licenses if required
Depending on the type of industry you are in, you might also need to obtain a relevant licence to be able to operate. Some examples include food establishments and takeaway restaurants, saunas and other health baths, massage treatments, gaming arcades, casinos, adult venues, nightclubs, cinemas or theatres, food carts/ trucks and establishments selling alcohol.
Open a business bank account
Having a bank account for your business is a SARS requirement. A business bank account will also ensure that personal and business transactions are kept separate for more efficient bookkeeping. Plus, you will be able to keep track of your income and spending more efficiently and get access to business tools and services.
One of the most important tasks in running a small business is completing payroll. Having employees get paid correctly and timeously boosts your staff’s morale and maintains the company’s financial stability. Employees’ wages/ salaries need to be calculated correctly while subtracting relevant taxes and deductions. To do this efficiently, a small business owner could consider outsourcing this time-consuming task or utilising efficient software.
Appoint a tax adviser
An expert business tax consultant will assist your company in having the lowest tax liability possible while remaining compliant. Their invaluable advice can save you a great deal and make your dealings with SARS as painless as possible. They also complete and file the business’s tax returns and use their expertise in tax law, tax compliance, and tax planning to benefit the business owner and offer helpful guidance.
Appoint an accounting team
It’s also beneficial to appoint an accountant or accounting team to match your business needs. Not sure whom to appoint? Read up on an Accountant vs a Bookkeeper. When you start a business, an accountant can help by determining the best business structure for your situation, assisting with the financial analysis of your business plan, providing advice on accounting software, opening a business bank account, tracking expenses during your daily business activities and more. Once your business is off the ground, they can maintain the accounting system and assist on an ongoing basis by overseeing company payroll and payments, closing out your books and creating financial reports at the end of the year.
Need help starting your business?
Need assistance to get your new company off the ground? We can get your business registered, provide assistance with payroll and accounting services, as well as tax consulting and more. Contact us to get an expert on your team and build the right foundation to set your new business up for success!