South Africa has a large agriculture industry which offers many agribusiness opportunities for entrepreneurs with an interest and drive for farming. Crop farming is one of the largest agricultural industries in South Africa. It involves a plant product, such as grain, fruits and vegetables, that can be grown and harvested to be sold for profit. In addition to providing food and raw material, crop farming in South Africa also provides employment opportunities to a very large percentage of the population.

Starting an agribusiness requires some skill, knowledge and resources. In this guide, we’ll explore some of the most important things to know to help you start a new crop farming venture.

Crop farming in South Africa

Crops provide the food, feed grain, oil, and fibre for local consumption, as well as for export.

Here is a breakdown detailing the various categories of crops.

• Food crops – includes rice, wheat, barley, millet, oats, rye, sorghum, and fruit and vegetables.
• Fibre cops – plants grown to produce fibre for textiles, such as cotton, hemp, jute and flax.
• Oil crops – soybeans, sunflower seeds, rapeseed, canola, and peanuts grown are all sources of oils.
• Ornamental crops – plants grown for decorative purposes in gardens and parks such as roses, orchids, ivy, oleander, tulips, and azaleas.
• Industrial crops – crops  industrially processed prior to final use, such as cotton, sugarcane,  coffee, tea, tobacco, coconut, and soybeans.

In South Africa maize is the most important food crop, followed by wheat and barley. As a staple food in the country, maize is  consumed in its direct form, and is used for products such as sweeteners, bread, and cornmeal.

In terms of fruits and vegetables, the major fruits consumed in the country are apples, pears, litchis, mangoes, plums, peaches, apricots, grapefruit, pineapples, avocados, and lemons. The most demanded vegetables in the country are lettuce, chicory, pumpkins, tomatoes, and carrots.

Read: How to Start an Agribusiness in South Africa 

Potential opportunities and challenges in crop farming in South Africa

One of the biggest challenges for small scale crop farmers is identifying profitable crops for production. It’s important for new farmers to identify market demand for different crops in the country and assess local and international market trends. In South Africa the most profitable crops are sunflower, soybean, grain sorghum, and groundnuts because of lower production cost.

To help you make the right decision, below are the major factors to considered in crop selection, according to the Department of Agriculture, Environmental Affairs, Rural Development and Land Reform.

• Prevailing farm conditions – including climate, soil and access to stable supply of water.
• Crop or varietal adaptability – crops should be selected based on their adaptability to the prevailing conditions in the farm.
• Marketability and profitability – to ensure financial sustainability, crop selection must consider marketability and profitability.
• Resistance to pests and diseases – select a crop and variety with wide resistance to important pests and diseases
• Available technology – whether the technology for the growing of the crop has been well established or easy to learn and apply.

Read: Farming App that Helps Emerging Black Farmers is SA’s Best Business App 

Becoming an entrepreneur generally means starting a new business from scratch. While this is highly rewarding, it also takes a lot of time and effort to get the business operating profitably. There’s also a lot of risk involved in starting something new.

This is why acquiring a business is an attractive option for many entrepreneurs. By acquiring an existing business, you can take over a business model and brand that is already established. You can also acquire a business already generating a profit, so there’s often less risk involved.

If this approach to business ownership sounds appealing, here are some different ways that you can acquire a business.

Franchising

Franchising is a type of agreement where the franchisor (the original business owner) lets the franchisee open up a new branch of the business. The franchisee gets to use the franchisor’s brand name, trademarks, and products.

Franchising can be a smart way of opening a new business, because you get to use an already proven business model, and you start with an already established brand. Franchisors also offer support to franchisees to help them establish and manage the business to the right standards.

The downside to opening a franchise is that the franchisee doesn’t have much freedom to run the business the way they want to. Paying for franchising agreements can also be expensive.

Buying Into an Existing Business

It’s possible to buy into an existing business by purchasing enough shares to put you into an ownership position. You could purchase the business outright, or buy into a portion of ownership and become a partner.

Buying into an existing business can be a good idea because you can join a business that has already established itself and is already generating a profit. When doing this, you should have a good idea of what you can bring to the table to grow the existing business even further.

There are a couple of different options for buying into a business. One example is a management buyout, where the business’s existing management team purchase the business from the owner. This often happens when the owner wants to retire and leave the business in trusted employees’ hands.

Mergers and Acquisitions

If you already own and operate a business, you can purchase another business and merge it into your existing company. Mergers and acquisitions are done when a business purchases another business that can complement what it does, or add another valuable element, product, or service, to expand the existing business’s opportunities.

Mergers and acquisitions can be very complex scenarios that require plenty of assistance from financial and legal professionals.

Joint Ventures and Partnerships

Joint ventures and partnerships happen when two business pool their resources and expertise to establish a shared business venture. Of course, this avenue of acquiring a business is only possible if you already have an established business.

Joint ventures and partnerships are done to help businesses access a wider market share or expand into new markets. This is effective because merging with an already established business helps you generate results straight away, as opposed to starting a new venture from scratch.

Asset Purchase

An asset purchase is when you buy specific assets from an existing company, like their equipment and stock. This often happens when a business closes down and wants to sell everything they own.

In an asset purchase, you don’t acquire the entire business and don’t trade under the original business’s name. This means this approach actually involves starting a new business from scratch.

However, you can take an already-established business, purchase its assets, and simply continue operating in the same way under a new name. Some common examples of this are purchasing the assets of a bakery or petrol station, and continuing the same business model with a different brand.

Auctions and Bankruptcy Sales

Businesses are sometimes sold through auctions or bankruptcy proceedings. If you find a suitable business being sold in this way, it could be a great way to acquire a business at a lower cost.

However, businesses sold through auctions and bankruptcy proceedings often come with a lot of potential risks that you’ll need to take on.

These are some of the best avenues for acquiring a business. Whatever approach you take, make sure that you understand the opportunities and risks involved in each scenario. While acquiring a business overcomes many of the risks of starting a new business, the process still comes with its own unique challenges.

While the e-commerce sector continues to grow in popularity, dropshipping businesses are still largely unexplored in South Africa. Dropshipping is a form of e-commerce and involves selling physical products from an website, but without having to keep stock or handle the product. It’s basically a fulfilment model where a dropshipper acts as the go-between for a customer and wholesaler.

Dropshipping is a good option for first-time business owners for many reasons. It’s relatively low-risk, and has limited capital requirements. Business owners are also able to sell a wide range of products on their online store since they do not have to stock the physical product in a warehouse.

Entrepreneurs must, however, ensure they select the right products as certain products may be more profitable to dropship in South Africa than others. According to Bizcommunity, the top e-commerce product categories in South Africa are clothing and apparel, appliances, baby toys and kids’ books, cellphones, tablets, electronics, fashion and accessories, office stationery, pets,  outdoor, and luggage.

In this guide, we’ll cover a few of the essentials you’ll need to know if you’re planning to start a dropshipping business in South Africa.

Dropshipping versus traditional e-commerce in South Africa

The biggest difference between dropshipping and traditional e-commerce is with the fulfilment of the order after a sale is made. Under the traditional business model, retailers are responsible for order fulfilment, which is the delivery of the products – from start to finish. It includes the entire process such as receiving orders, managing inventory, the storage facility, order processing (packing and getting items ready to be shipped). Other factors traditional e-commerce stores have to consider is shipping, as well as the returns process if customers return an item.

Where the two models are similar is that they both require an e-commerce website where customers can make purchases. This means with a dropshipping business it’s the business owner’s responsibility to build an online store.  It’s also their responsibility  to attract traffic to their online store in order to make sales. Lastly, business owners must secure an online payments gateway.  This technology enables your business to accept bank cards and other forms of online payments.

Read: Find the right e-commerce website builder

Dropshipping business challenges in South Africa

One of the biggest success drivers of a successful dropshipping business is sourcing a good selection of products. This is a major challenge in South Africa because of a limited number of suppliers of products. This makes it harder for business owners as they have limited products and brands to choose from.

In addition to limited product selection, drop shippers do not have a lot of control over the products they stock. Typically, the supplier is responsible for designing and branding the product that is being drop shipped. This can make it difficult to differentiate your product and stand out as your products are not custom-made. Other challenges that are specific to dropshipping are low margins and operating in a highly competitive space.

Overall, dropshipping can be a lucrative business opportunity provided you do your research and source the right products. It’s equally important to market your online store to increase the visibility of your business among potential customers.

Starting a real estate business in South Africa is an excellent idea for ambitious entrepreneurs. It’s one of the best ways to get into the property industry, and real estate businesses offer a lot of room for making money.

South Africa is a buyers’ market, and there are always opportunities for new real estate businesses. However, it’s also a competitive market, so you need to take the right steps to strategically set up your business.

In this guide, we cover the main steps and processes you need to follow to start a real estate business.

Qualify as a Real Estate Agent

Before you can start a real estate business in South Africa, you’ll need to qualify as a real estate agency principal. This is essential if you plan on selling property under your own company.

Here are the three main steps you’ll take to do this.

Complete Your Internship

All new estate agents need to obtain their Fidelity Fund Certificate (FFC), which can be obtained through 12 months of work experience with an existing real estate agency.

The main purpose of this internship is to build up a portfolio of evidence (PoE) which you will submit to the EAAB.

Not only is this a necessary step in qualifying as a real estate agent, but it also helps you to gain valuable industry experience and knowledge. This is essential if you want to start a successful real estate business.

Complete Your Studies

Once you receive your Fidelity Fund Certificate (FFC), you will need to complete the following within two years:

• National Qualification Forum Level 4 Real Estate (NQF4)
• EAAB Professional Designated Exam Level 4 (PDE4)

These qualifications let you work as a full-status real estate agent.

Qualify as an Estate Agency Principal

You need to be qualified as an estate agency principal if you want to run your own real estate business. To achieve this, you’ll need to gain at least two years of work experience in a management role, or running a real estate agency.

You will also need to complete your NQF 5 course, gain a certificate of competency from SSETA, and submit your PoE to the EAAB. Once you have qualified as a real estate agency principal, you can now start your own real estate business.

Create a Business Plan

As is the case with starting any kind of business, you’ll need to have a solid business plan in place before you get started. This should outline all the details of how you will establish and operate your business.

Importantly, this should cover:

• The area and market you plan to operate in
• The type of real estate business you plan to run

For example, you could specialise in a certain geographic location, focus on residential or commercial properties, specialise in leasing, focus on property development, and so on. Your business plan will also need to cover detailed market research, your financial plan, business goals, and any other relevant information that will help get your business up and running.

Register Your Company

When your business plan is ready, you’ll need to register your real estate company. You need to do this through the CIPC and gain your official registration documents. The type of company structure you choose should depend on how many people are involved in the business and how your business plans to operate.

Market Your Business and Develop Strategic Partnerships

Once you have established your real estate business, you’ll need to get clients. This is why having a good marketing plan is so important. Figure out how people will discover your business, how you will attract clients, and how your business will grow.

It’s also important for real estate businesses to develop the right strategic partnerships. This could include partnerships with law firms, property developers, and other types of property-related businesses. The right relationships and partnerships can play a big role in how much new business you generate.

Starting a real estate business can be done relatively easily. With the right commitment, anyone can become a registered estate agent. Compared to other business models, you can also start a real estate business with minimal upfront capital.

The opportunities are also enormous. As long as people are buying and selling property, there are great possibilities to make money. If you’re interested in working with property, then getting into real estate is one of the best ways to enter the industry.

SEE ALSO: HOW TO START A PROPERTY BUSINESS.

Starting a property business is appealing to many entrepreneurs. There’s a lot of money to be made in property, and property has always been regarded as a reliable investment option.

The good news is that there are also many different paths you can take if you want to start a property business. While developing and investing in property is where the big business lies, you can always get a foot in the door through other approaches.

To help you get started, here’s a quick guide on what you need to know about starting a property business.

Establish What Type Of Property Business You Want to Start

First of all, you need to establish what type of property business you will run. There are many business opportunities that exist involving property.

Some of the most popular options include:

• Property development
• Renting out property as a landlord (commercial or residential)
• Flipping properties
• Managing properties
• Bird dogging properties
• Selling properties as a real estate agent
• Offering property-related services (law, real estate photography, accounting services, etc)

Of course, if you’re looking to start a property business, you’re probably thinking of investing in property. However, if this is not financially viable, there are still other ways to enter the property business.

How to Invest in a Property Portfolio

The biggest challenge to starting a property business is finding the capital to invest in your property portfolio. While this may seem daunting, there are various options available to those looking to invest in property.

Apply for a Home Loan

The most common strategy for purchasing property is through a home loan. This is when the bank finds the property, which you pay back through instalments. Ideally, you’ll be able to put down a large enough deposit to gain a better interest rate and lower monthly instalments.

Other People’s Money (OPM)

Using other people’s money to invest in property is a strategy that many property investors use. To do this, you’ll need to partner with other investors to purchase a property. These kinds of partnerships need to be mutually beneficial, where each partner plays on their strengths.

Other People’s Property (OPP)

Taking an OPP approach is when the seller funds the purchase of the property themself under the agreement that you will pay them the value of the property over time.

Purchasing Shares

If you’re not ready to invest in direct property ownership, you can invest in property shares. This could be done via a broker or on the stock market.

Look for Property That Will Generate a Profit

If you’re investing in property as a business, you’ll want to look for an affordable property that will be able to generate a profit from the start. One of the best ways to do this as a beginner is buying to let.

This is when you purchase a property to rent it out, and you use the rental income to cover the property purchase. To do this successfully, you’ll need to find a property and area where you can consistently generate a rental income.

Ideally, you’ll also want to try to find a property that will significantly increase in value over time. It’s important that you weigh up the price, yield, and risk factors associated with the property to help you find the best possible property for your business.

Steps to Start a Property Business

Once you have established what type of property business you want to start, you’ll need to take the right steps to set your business up.

No matter what kind of property business you’re going to establish, here are the general steps you’ll need to take to do it:

• Develop a business plan outlining your property business’s scope, goals, and strategy
• Conduct in-depth market research to understand your target audience, competition, and industry trends. Of course, you’ll also need to understand the state of the property market
• Secure financing or investment for the business, if necessary
• Register your business with the CIPC and obtain any necessary licenses and permits
• Develop a marketing strategy to promote your business and attract customers
• Hire staff or contractors, if needed, and establish an operational plan for the business
• Launch the business and continually evaluate and adjust your strategies based on your business performance and market changes

These are the basic considerations you need to make when starting a property business. Although, each property business is unique, and will have its own specific requirements. This is why it’s so important to thoroughly understand your particular business model and its requirements when you get your business off the ground.

Demand for quality South African beef products is consistently growing, both locally and internationally. This means there’s a steady demand for cattle farming in South Africa. Cattle farming forms an important part of South Africa’s agricultural landscape. If properly approached, it can be a highly profitable and rewarding type of farming to get into. However, cattle farming also involves a significant investment, and there’s a lot of hard work that goes into establishing a cattle farm.

In this guide, we’ll cover a few of the essentials you’ll need to know if you’re planning to get into cattle farming in South Africa.

Understanding Cattle Farming in South Africa

You can split South Africa’s cattle farming industry into two main sectors – cow-calf operations and feedlots. Cow-calf operations refer to farms that breed and raise cattle to sell them. These farmers are focused on raising quality cattle that are suitable for the specific industry they sell them to, such as dairy cattle or beef cattle. Feedlots purchase cattle and prepare them for the final stage of the beef production process. Feedlots are focused on feeding up matured cattle and making sure they have the right medical clearance to continue onto the beef production process. Of course, you do also get cattle farms in South Africa that combine both elements.

Considerations for Cattle Farming in South Africa

If you want to start cattle farming in South AFrica, there are a few important considerations to make.

Cattle Production Systems

There are three types of commercial beef cattle production systems you can run:

• Intensive conditions: Where cattle are kept in confinement and are fed with water and feed.
• Extensive conditions: Where cattle have the freedom to roam outdoors and graze as their main source of feeding.
• Semi-intensive conditions: A combination of both of the above systems, where cattle are exposed to extensive and intensive farming methods.

It’s important to choose a cattle production system that makes sense for your type of cattle, your land, and how your cattle farm plans to operate as a business.

Cattle Breeds

A vital part of starting cattle farming in South Africa is selecting the right livestock breeds. This is expensive, and you want to ensure yous et your farm up with good genetics from the start. There’s a lot to consider when choosing cattle, such as their age, size, condition, and reproduction statistics. Although, the best type of cattle for your farm really comes down to your farm’s climate, your farming methods, and the purpose of your farm. Understand the pros and cons of different cattle breeds and make sure you choose the right breed for your farm. This is critical for the success of your cattle farming operations.

Cattle Health

You need to keep your herd healthy if your cattle farm is going to be a success. Maintaining good herd health is one of the most important parts of cattle farming. Be sure to properly vaccinate all of your animals and apply proper parasite control measures to your farm. You will need to work closely with a veterinarian to make sure your cattle stay healthy.

Feed and Nutrition

Another essential part of keeping your herd healthy is providing them with the right feed and nutrition. Beef cattle consume around 3kg of feed per day for each 100kg of body weight. This means you need plenty of feed available to maintain a healthy herd. Ensure your pastures are properly managed, and that you have enough space for cattle to graze sustainably. The more you let your cattle graze, the more attention your fields will need.

Investing in high-quality feed for your cattle will help you produce healthier, stronger animals. Of course, this is also a major expense that needs to be carefully controlled. Access to clean drinking water is also essential, as adult cattle can drink up to 70l of water per day.

While cattle farming poses a great opportunity, you need to be properly prepared if you’re going to get into this area of agriculture. Successful cattle farms require a lot of space, a lot of resources, and a lot of specialist knowledge. You need to make sure your farm is properly set up to keep your cattle healthy while providing enough output – whether that be through beef or dairy.

However, with the right production and herd management systems in place, starting a cattle farm can be highly rewarding. As this is an area of farming with plenty of demand, there’s always room for new high-quality cattle farms to enter the market.

Event planning is an exciting business idea that presents many opportunities for entrepreneurs with the organisational skills and network to succeed. While the industry has a relatively low barrier to entry, it’s important that budding business owners know what goes into starting a business in this potentially lucrative industry.

Read: A Guide to Starting a Business in South Africa

What does an event planning business do

An event planning business is a service-based business. Clients pay for you to coordinate and supervise planning duties such as choosing and securing a venue, catering services, and hiring the entertainment. Event planners also work with relevant vendors to set up the event.

This guide will cover some of the key steps, compliance and funding requirements that event planning business owners need to know.

Understand the market

South Africa boasts an active events calendar which makes it suited for a wide variety of event planning businesses.

As the event planning industry is diverse, there are various areas your business can specialise in including private, social and corporate events. Private events such as weddings, birthday parties, and family reunions, are tried-and-tested and continue to be popular. However, the boom in music and food festivals has also opened up the market for planning these kinds of events. Additionally, some event planning businesses have found a profitable niche in South Africa’s corporate sector, and plan events such as as conferences, exhibitions, product launches, galas, and award ceremonies.

Find a way to stand out

It’s important to stay ahead of the competition in what is an increasingly crowded market. To do this, identify a specific market (niches) to target your services towards. Ideas to try include virtual events, which in the wake of COVID-19, have become increasingly commonplace. Travel and tourism events also present new opportunities as borders continue to open up to help people create unforgettable memories. Other ways event planners can stand out is by meeting demand for more luxurious and exclusive offerings, including gourmet catering, and high-end service, décor and entertainment.

Get a business plan

It’s a good idea to put together a business plan for your new business. Your plan should outline the type of business you plan to launch, including the following details:

• Company details
• Industry and competitor analysis
• Financial plan
• Marketing plan

Your business plan won’t only provide a useful guide for where you want to go, but it can also help you evaluate the viability of the business, as well as help you secure investors.

Access funding

While event planning does not require much startup capital, you will still need some funds to get started.

There are a number of options available for raising capital for your startup from government grants, bank business loans or crowdfunding (if you are looking for alternative financing options). Business owners can also choose to bootstrap and use their personal income to fund the business.

Read: Find out the requirements for business loans in South Africa

Once your business is up and running, use accounting software to stay on top of your finances. Must-have features include record keeping, invoicing, sales tracking, cash flow management and tax management features.

Hair is big business in South Africa. While there are all kinds of hair salons and retailers that exist in the country, one of the biggest areas to focus a hair business on is natural hair. Natural hair products are becoming increasingly popular, and starting a business selling natural hair products could be a great way to enter the popular hair market.

In South Africa, where afro-textured hair is most common, selling natural hair products makes sense. In this guide, we’ll cover what natural hair products are, why they’re a great idea, and what to consider if you start a business around natural hair products.

What are Natural Hair Products?

Natural hair refers to maintaining your head of hair without using any chemical straighteners, relaxers, or texturizers. It’s a way of maintaining afro-textured hair in its unaltered state, without altering hair to conform to Eurocentric hair and beauty standards. Natural hair is all about encouraging African people to embrace their natural afro-textured hair and curls.

This means natural hair products are any hair products designed to maintain this natural hairstyle. Natural hair products contain ingredients that won’t perm, dry, relax, or chemically alter the hair in any way.

As the name suggests, natural hair products are often made from more natural ingredients – avoiding any harsh chemicals that will alter your hair. These products are generally focused on maintaining moisture and cleanliness in hair, without changing the way the hair naturally grows.

Why are Natural Hair Products a Good Idea?

Natural hair products celebrate afro-textured hair for what it really is. For many years, African people with this type of hair have used different products and methods to try to straighten and flatten out their hair. Natural hair is all about embracing hair in its natural state.

Beyond this, it’s a healthier way to take care of your hair. Natural hair products don’t contain chemicals that weaken the hair or make it more prone to breakage. Relaxers contain strong chemicals that could damage the structure of your hair or even burn your scalp.

So using natural hair products is a great way to make people feel better about themselves, while also promoting healthier hair habits.

Selling Natural Hair Products

There is an enormous market available for natural hair products – a market that is still largely untapped. In South Africa, people are willing to spend a lot of money on their hair. It’s a top priority for many. By taking advantage of the rising popularity of natural hair, there is major potential to build a successful natural hair product business.

This starts by having a great product. You could either try to develop natural hair products yourself or use a wholesale supplier. Whatever the case, ensure you have a quality product that meets all of the right natural hair requirements.

Then understand the market and establish how your business will fit into this. While there is a lot of potential for hair products, it’s also a highly competitive market. It’s important that your natural hair business comes with a strong unique selling proposition (USP), and that you understand who your target audience is and why they would be interested in your products.

Establish a clear business plan that outlines how your business will start and operate, what operational requirements your natural hair business has, how you will market the business, what your finances will look like, and so on.

Natural Hair Styles

With natural hair comes the ability to enjoy a range of different hairstyles. These include braids, twists, afros, and Bantu knots. Without any chemicals or straighteners in your hair, these styles work particularly well.

If you plan to establish a business around natural hair products, it could also be worthwhile looking into natural hair styling. The two areas are closely related and offer lucrative opportunities for small businesses.

There is an enormous market available for natural hair products, making this a great area to start a business in. There is also a lot of room to start a small, local business selling natural hair products, with the opportunity to expand into the larger market.

People will always place a lot of value in caring for their hair, and using the right natural hair products is the best way to do this. Focusing on natural hair products and styles is only growing in popularity. So, if you’re interested in hair, this can be a great area for starting a business.

SEE ALSO : LOCAL BEAUTY BUSINESSES WORTH SUPPORTING 

UPDATE: This article was originally published in May 2015, but due to its popularity it was updated with brand new information on 09 February 2023.

One of the more important requirements of starting a business is making sure you have all the necessary associated permits and licences within your chosen industry. The food service industry is made of restaurants, hotels and inns, as well as catering and vending companies. The most important regulations that business owners in this sector have to comply with are health and safety permits, licenses for the selling of liquor and tobacco as well as zoning permit to operate in certain locations.

We speak to Cindy Leibowitz of CL Legal Consulting, who gives us a break down of these licenses and permits that are required when opening a new food service business.

What kind of licenses/permits do I need when starting a new small business in this industry?

Business licenses – In terms of the Businesses Act (1991), where a person is starting a business with the purpose of selling or supplying any foodstuff in the form of meals for consumption on or off the business premises, or any perishable foodstuff, then that business is required to hold a business license. Therefore, any person who wishes to start a new restaurant, even if it is a take-away restaurant, will need to apply for a business license under the Businesses Act.

There are certain instances where a restaurant does not need such a license. For example, a restaurant business which is carried on by an educational institution where the profits derived from the business are devoted to the purpose of that or another institution. Accordingly, a school tuck shop would probably not need a business license under the Businesses Act.

Health and safety – Under The Health Act (1977), there are the Regulations Governing General Hygiene Requirements for Food Premises and the Transport of Food, in terms of which any person who handles food or permits food to be handled, such as a restaurant, is required to possess a certificate of acceptability.

Liquor licensing – If you plan on selling liquor in your restaurant, then you will need a liquor license. The granting of liquor licenses is dealt with at provincial level, which means that every province within South Africa has its own specific laws governing liquor licensing.

Sound and music – Further, if you plan on playing music in your restaurant, even if it is background music, then (depending on certain factors) you will need a license from The Southern African Music Rights Organisation (SAMRO) as well as a license from The South African Music Performance Rights Association (SAMPRA). These are two completely separate companies, and therefore two separate licenses. A license from SAMRO covers the copyright in the actual song (i.e. the composition and the lyrics), and the royalties payable by you in terms of this license will be distributed by SAMRO to music publishers and songwriters. On the other hand, a license from SAMPRA covers the copyright in the recorded version of the song, and the royalties payable by you in terms of this license will be distributed by SAMPRA to certain record companies. The requirements for a business license may differ from one local municipality to the next

Why do business owners need to obtain such permits and licenses?

A restaurant is required to hold a business license and a certificate of acceptability due to the impact which owning a restaurant and selling food may have on public health and safety if certain standards are not adhered to. In relation to liquor licensing, due to the socio-economic effect of alcohol abuse, it is essential that the supply of alcohol is regulated, and that restaurants are required to hold licenses to sell liquor.

Music licenses are necessary for the protection of intellectual property rights. A license from SAMRO is necessary to protect the intellectual property of composers and authors by providing them with adequate accreditation and compensation. A license from SAMPRA is necessary to protect the intellectual property of record companies by providing them with adequate accreditation and compensation.

Where can I apply for them?

The location of the restaurant will determine where you will apply for a business license, a certificate of acceptability and a liquor license. For a business license and a certificate of acceptability, you would need to apply to the local municipality within which your restaurant is situated. In relation to liquor licenses, each province has its own Liquor Authority/Liquor Board which is responsible for the granting of licenses to the restaurants within that province. For music licenses, you would need to contact SAMPRA and SAMRO directly to obtain licenses from each of them.

• See also: Everything You Need To Know About Enterprise and Supplier Development In South Africa

What are the requirements for each of the permits and licenses?

The requirements for a business license may differ from one local municipality to the next, so it is advisable that you contact your particular local municipality to find out the specific requirements applicable to your restaurant. For a certificate of acceptability, you will generally be required to provide information regarding the nature and type of food being handled on the premises, the nature of the handling (e.g. preparation, packing, processing etc), and certain other information.

In relation to liquor licenses, the requirements may differ from one province to the next, so it is advisable that you contact your local Liquor Authority/Liquor Board to find out the specific requirements applicable to your restaurant.
SAMRO and SAMPRA each have their own requirements for obtaining a license. In an application for a license from SAMPRA, for example, you would be required to inform SAMPRA whether the music used in the restaurant is played via TV, radio or other means; the floor space of the restaurant etc.

What are the repercussions that business owners may face if they do not have the proper documentation?

Where a restaurant does not hold the required business license, certificate of acceptability or liquor license, it is an offence under the applicable law. The offence may be punishable by way of a fine and/or imprisonment. Where a restaurant plays music without the required music licenses, then this may constitute a copyright infringement in terms of South African copyright laws, and the restaurant may be sued by the copyright owner.

What are some other laws and legal aspects need to considered when opening a restaurant?

One would need to be mindful of certain other laws when starting a business in the food service industry. The Tobacco Products Control Act (1993) contains certain requirements regarding smoking in public places, such as restaurants. In addition to this, as a restaurant owner, you fall within the hospitality industry, and there are certain labour laws which you may be required to adhere to in relation to your employees, and there are certain bargaining councils which operate within the industry.

Further, in terms of the Consumer Protection Act (2008), the customers which dine at your restaurant are entitled to good quality food and service, and you may incur a liability claim under the Consumer Protection Act if this is not adhered to. The good news is that, if you own a restaurant which is part of a franchise, then the Consumer Protection Act may actually work in your favour. In terms of the Consumer Protection Act, the franchise agreement between yourself and the franchisor must contain certain prescribed clauses, which protect you as a franchisee.

On the commercial side of the business, you will most probably be leasing premises out of which your restaurant will operate, and this will mean signing a lease agreement. It is also likely that you will need to sign supply agreements with the companies which supply you with the produce used in your business. It is advisable to ask an attorney to review these agreements so as to ensure that they do not contain any hidden clauses which may be detrimental to your business.

• This is a first in what will be a series of articles focusing on licensing and permit requirements for each industry.

What are the costs for a business license for a food business?

Depending on whether you are a hawker or informal trader, or you run another type of food business such as a takeaway or restaurant, or guest house, the tariffs differ for each. Anyone with a food business should either apply for a business license or trading permit – the application process can be done online or you can do a walk-in at your local municipality.

Hawkers and informal traders

Whether you are a hawker or informal trader who sells meals or perishable food, or you own an accommodation establishment (such as a hotel, guest house, lodge or bed and breakfast), you need to apply for a trading permit at your local municipality, according to the City of Ekurhuleni. The trading permit must get renewed on an annual basis. Trading permits can cost from *R200 for hawkers and *R850 for accommodation establishments. An occasional event trading permit can cost from *R250 per event.

Other food businesses

If you are selling or supplying meals/ food from a restaurant, a takeaway, tuck shop, spaza shop, fast food outlet, supermarket, grocery store, or wholesaler, you need to get a business license and can have it renewed every year. It can cost from *R850 for a business license.

Other licenses that you apply for and pay separate tariffs for including the provision of health facility or entertainment, inspection fee for Fire and Safety inspection, and the grading of the stalls or demarcated space for trading.

*Prices/ tariffs are set annually and are subject to change. You need to inquire at your local municipality about their tariffs.

The application process

According to the City of Johannesburg, the application will be forwarded to five departments to check that the requirements are met for:

• Environmental health
• Noise and air pollution control
• Public safety
• Urban planning
• Building control

Once all five departments have returned a recommendation for approval, only then your business license or trading permit will be issued.

What do you do if you are moving your food business?

For those who already have a business license in one province but would like to apply for a license for a food outlet in another province, you need to apply again at the local municipality that you want to trade-in. This is because the requirements can include having your landlord’s signed consent (where your food outlet will be), as well as consent from the Town Planning Department.

Facility standards you should adhere to on food premises

When providing food you are required to ensure that your facilities are hygienic and that the surface of any place where food is handled is smooth and its material is non-toxic. Utensils need to be stored in such a way that dirt does not accumulate on them. It is important to note that utensils and cutlery are not to be used if unclean or cracked in any way.

Any utensils, such as plastic cutlery, which are used once have to be kept in a dust-free container and can only be used once as intended. It is also important to note that any person handling food has to wear clean and suitable protective clothing so that food cannot be contaminated.

COVID-19 Opportunities: Delivery Services

The restaurant industry will experience major changes due to the COVID-19 pandemic with a shift to food delivery for many restaurants. 

We take a look at what regulations restaurants will need to adhere to when delivering food. 

Options available for delivery

1. Self-Delivery

Restaurants may deliver their own food, however according to a Food Focus article, ‘R638 Regulations Governing General Hygiene Requirements for Food Premises, the Transport of Food and Related Matters,’ regulation 638 of General Hygiene Requirements for Food Premises, the Transport of Food and Related Matters Gazette no. 41730 requires business owners to adhere to the health and safety regulations as set out in the Regulations Governing General Hygiene Requirements for Food Premises, the Transport of Food and Related Matters, taking into account standards and requirements for the transport of food. These include the prohibition of transportation of food:

• In a vehicle that has not been cleaned
• Together with contaminated or waste food
• Together with poison or harmful substance
• An object that may contaminate or spoil the food

2. Other options

Register your restaurant on one of the following food delivery platforms. They are beneficial as they have a large footprint and can expose your business to new customers. However, take note that these delivery platforms operate within a certain radius and take commission for handling delivery.

• Uber Eats
• Mr Delivery
• OrderIn

Access Unilever’s Food Delivery Template. Available here for download.

• Looking for a Professional Lawyer that can Help with Licensing Your Business? Find one on Startwise

• See also: RocoMamas Founder on Customers Genuine Love for the Brand

You can also see below, the Ultimate Legal Guide to opening a Restaurant in South Africa

About the contributor: Cindy Leibowitz (BA cum laude, LLB cum laude, Advanced Company Law I and II) is the owner of CL Legal Consulting. Cindy is an admitted attorney with 8 years’ experience in corporate, commercial law, drafting contracts, commercialisation of intellectual property, media and entertainment law, IT law, statutory compliance and providing general legal advice to clients.
This article contains generic references to some of the main licenses, permits, laws and legal aspects to be considered when opening a restaurant. This article should not be construed as a comprehensive overview of all of the legal requirements associated with operating a restaurant. It is advisable that you consult with an attorney in order to obtain more detailed advice.

Local businesses form the core of South Africa’s economy. If you’re thinking of becoming an entrepreneur, then chances are you would like to open a small local business. Local businesses are all about the specific markets they serve and fulfilling the needs of a clearly defined target audience. Understanding these factors is necessary for running a successful local business. You also need to implement strong local marketing tactics and know how to survive in a confined and competitive local market. In this quick guide, we’ll cover what you need to know about starting local businesses in South Africa.

What are Local Businesses?

As their name suggests, local businesses are any businesses that are restricted to operating within a certain area. Unlike businesses that could operate online, or serve clients remotely, local businesses have specific geographic limitations. Some common examples of local businesses include coffee shops and restaurants, hair salons, home services, and retail stores.

How to Set Up a Local Business

There are a few essential considerations entrepreneurs to make when establishing local businesses in South Africa. No matter what kind of business you plan to open, here are the general steps you’ll need to take. Keep in mind that this is a simplified list of steps. Starting a business will require additional steps that depend on the specifics of your business model and how you plan to operate.

Understand Your Market

Local markets are very specific, so local businesses need to have a deep understanding of their market environments, This involves understanding their target audience, the competition that exists, and what kind of business environment exists in your local area.

Establish a Business Plan

Local businesses need to have a clear business plan in order to succeed. This should cover everything outlining what the business does, how it plans to operate, how it will start, what its estimated finances will look like, and so on. This acts as the roadmap to understanding whether a business will be viable and how it will get started. A key part of a business plan is also establishing what competitive advantage your business will have and how it will fit into the local environment. This is essential for local businesses.

Funding Your Business

Local businesses need money to get set up and start trading. This is necessary for securing the right location, buying equipment, purchasing stock, hiring staff, and so on. Local business funding could be secured from traditional business loans, private investors, or even through government funding.

Choose the Right Location

When it comes to local businesses, location is everything. The business’s scope of customers and earning potential is based on its location, so it’s critical that the business operates out of the best possible location. Taking enough time to find the right location is important. When choosing a location, consider how customers will find the business, how visible it will be, and how easily accessible it will be. Factors like parking, security, and other local businesses that exist in the area should be considered. It is also possible to start a local business from home – like a catering, baking, or services business.

Marketing Your Local Business

Marketing local businesses are different from creating a marketing strategy for businesses that serve a wider audience. This is because you want to make sure you only target the right potential customers with the right content. Your goal isn’t to reach as many people as possible. Instead, it’s all about reaching the right people. Some tried and tested local marketing tactics include:

• Establishing a local social media presence and targeting people within your location with paid ads
• Creating a strong Google Business profile
• Getting your business listed on local directories
• Flyers and posters
• Reaching out to local media for marketing opportunities
• Optimizing your website for local SEO

You need to make sure you apply the right local marketing tactics so that you can reach the right customers and drive sales in your area.

Local businesses are essential to South Africa’s economic landscape. As long as you understand your local market and have a strong business idea, then starting your own local business can be a highly rewarding process. It’s essential that you understand exactly what resources are required for your business, that you know the market well, and that you have a strong grasp of your target customers. Many massive enterprises started as small local businesses in South Africa, so there is endless room for growth for any budding entrepreneur.