Small business owner suffering in SA

Small business owner Jonathan C shares the hard realities of running your own business in South Africa. He has two small businesses of R2m. As an accountant he does everything by the book and to him the biggest stumbling block is the returns required by the SA Revenue Service (Sars):

Tax returns

• EMP returns (employee tax) 1 per month 12 per year
• PAYE recon 2 per year
• Got staff – perhaps 6 – 12 IRP5s or IT3s
• VAT 6 per year excluding the 4 (in my case) VAT reviews.
• If you have a claim? Mine has not been paid back despite recording a conversation that it will.
• Now if you are a sole proprietor you will have another 2 provisional returns and a your own annual tax return.

Labour laws a small business has to comply

Now besides dealing with Sars one should also know these Acts:

• Occupational Health and Safety Act
• Compensation for Occupational Injuries and Diseases Act
• Basic Conditions of Employment Act
• Employment Equity Act
• Labour Relations Act
• Unemployment Insurance Fund Act
• Skills Levy Act
• Cipro return – if a company.
• Coida  return and
• any Act that may be specific to your business.

…and of course the laws are always changing.

Staff issues challenging a small business

Now we need to run the business. I have staff:

• who constantly have to be paid, have to get a minimum salary and increase, even if they are not worth it.
• want to borrow money – otherwise they don’t come to work as they cannot afford taxi fare.
• who stay off work anyway.
• who go on leave – so keep a leave roster.
• who want a bonus at the end of the year – so prepare to have no cash over December.

Customers 

You need to market, advertise and perhaps deliver your product. If you want to play with the big company’s get a BBBEEE certificate.

Suppliers
If the suppliers are VAT registered and you’re not, your cost is already 14% higher and Sars does not want small vendors, so you are immediately at a disadvantage. If you sell back to a VAT registered customer, they will need to further add 14% VAT on. Your product could be uncompetitive.

IT
If your computer breaks you can’t call the IT guys next door – fix it yourself or take it somewhere and remember to backup.

Accounts
Keep a Cashbook, debtors, credits, fixed assets, stock control, VAT and diary – and at the end of the day one may still have to make a product, as I do. So you need time and without this product everything above is pointless and must take a secondary seat. If you are selling a skill, then things are a lot different.

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Skills for Business

Skills for Business: Entrepreneurs in South Africa are constantly faced with the challenge of attracting and retaining people with the vital skills and experience required to grow a business.

When a business grows and starts facing a range of challenges, the entrepreneur relies more on staff for the support, expertise and dedication needed to keep the business on track. There are a number of ways to attract and keep essential skills within a company, despite numerous offers that your staff may be getting from bigger businesses.

1) Smaller companies can offer potential employees the following advantages:

•  Less red tape and bureaucracy.
• Closer relationships between leaders and employees.
• Greater depth and exposure to other parts of the business.
• More flexibility, diversity, personal growth and development.

2) Recruitment of skilled employees

Business owners that are not confident about their interviewing or assessment skills should consider hiring a specialist recruitment company to do the initial screening. However, if you prefer to do the entire process yourself, you should take these factors into consideration:

Does the candidate have traceable references?

• How do previous employers regard the candidate? Speaking to each employer personally is essential.
• Is the person a job-hopper? If a candidate has had three jobs in three years, they could be unreliable.
• Does the prospective employee have a sound credit rating?
• Does he or she have any criminal convictions?
• Does the candidate have the temperament to work in an environment where teamwork is essential?

Skills for Business (Photo credit: Wikipedia)

3) Job Satisfaction

Attracting the right skills is one thing, but keeping them in the business requires equal attention. Happy employees help to enhance the success of a business. In a smaller business, it is possible for employees to feel stagnant. By constantly encouraging them and providing feedback on their performance you can enhance personal well being and protect your business from being disrupted if a key employee leaves.

The following factors can increase job satisfaction:

•  Providing an environment conducive to learning and development.
• Allowing employees to personalise their workspace.
• Introducing flexi-time for employees if applicable.
• Encouraging those with computer-based jobs to work from home if applicable.
• Conducting regular performance reviews.
• Encouraging employees to become multi-skilled by learning from others.
• Encouraging growth, development and efficiency within the business.
• Encouraging employees to make work-related suggestions and operational recommendations.
• Providing small job perks.

4) Communication is key

Communication is the most important skill for any entrepreneur to master. If employees know what is expected of them, and know that they can approach you to make suggestions, raise issues or questions, you are more likely to keep them.

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4 Ps of Marketing for your success

Once the initial adrenaline rush of establishing a business has passed, most entrepreneurs begin worrying about the bread and butter issues required for making their businesses sustainable. Usually, this involves building a company reputation that ensures a place in what could be a crowded, highly-competitive sector. What this boiled down to was ensuring that the business met the time-honoured four Ps of marketing.

The four key activities of marketing must be brought together and blended to produce results in the chosen business sector. The good news is that they do not require the allocation of massive budgets to be implemented successfully:

4P’s of Marketing (Photo credit: Wikipedia)

• Product: To be accepted in the market, a product has to satisfy the requirements of the purchaser from the first point of contact through to after sales service. The product must therefore incorporate the design elements, features, packaging, and quality that customers demand.
• Place: The location of the business, shop, or outlet must be visible and easily accessible to customers. pending on the nature of the business, this may also need to be supported by a distribution network and suitable logistics for getting the product to the customer.
• Price: Keen pricing is essential in highly-competitive sectors. Attention has to be paid to pricing, discounting, credit and cash purchases as well as credit collection.
• Promotion: Having the correct products, at the right place, with the correct prices is of little use if people don’t know about you and your company. This means using advertising, marketing and other promotional activities to convey the value and benefits of your products or services. Activities can also include direct marketing, personal selling and the internet.

 If the 4 Ps of marketing are applied to the satisfaction of the market, success is bound to follow.

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Office in transition

Office in transition: A new generation of employees is entering the workforce and business should adapt to handle the dynamics that come with such employees. Over the last few decades we have seen a major shift in business and how we work. Together with a new generation of employee that is entering the workforce, with different work styles and expectations as well as technology that is advancing rapidly, it is crucial for companies in South Africa to ensure that their organisations are flexible and adaptable:

A collaborative culture 

Establish a culture of collaboration by giving employees, customers, suppliers and partners the tools and flexibility to achieve business objectives, make good decisions, resolve issues and share knowledge.

Team space (Photo credit: Wikipedia)

Evolve and adapt

Embrace innovation. In the workplace today, more time is spent in team spaces using collaborative technologies such as video conferencing and far less time is spent at desks. Empowering people to interact, inspires creativity and increases productivity.

Embrace technology

Technology allows a team to collaborate by exchanging knowledge and ideas across a city or the globe. Successful collaboration hinges on having access to the right technologies at the right time to support effective communication. Social media also plays a critical role in collaboration. Studies show that social media has the potential to increase productivity of workers between 20 to 25%.

Use available data

Today, about 49% of available office space is being used. As mobile and collaborative work patterns evolve, there may be even less of a need to maintain existing real estate portfolios. Data collected from sophisticated building management systems is already helping facility teams make fast, accurate decisions on energy strategy. For example, real-time data gathered by occupancy sensors is used to help identify spare capacity.

Promote agility

Adopting an attitude of agility has a direct impact on productivity. When leaders support a flexible, mobile, collaborative work environment, workers are inspired to work harder and smarter. Workplace strategies that encourage innovation, unlock hidden potential.

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