ithala starting and running your own business_booklet

8/7/2019 Ithala Starting and running your own Business_booklet

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Starting & Runningyour Own business

Produced as a joint venture initiative by

DEVELOPMENT FINANCE CORPORATION LIMITED

Department of

Economic Development

and Tourism

KwaZulu-Natal


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page

1 introduction 1

2 what drives one to start a business? 2

3 identifying business types 4

4 selecting the appropriate business entity 6

5 purchasing an existing business 10

6 developing a business plan 12

7 business finance 20

8 operating and managing a business 22

9 the franchise option 23

10 legal aspects 25

contents


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South Africa faces many major economic challenges as it

continues infiltrating the global m arket.

Two such challenges include sustainable economic growth

and the significant reduction of unemployment within the

country. The development of the small business sector

is vital to this country and to vast numbers of its

economically active popu lation, as this sector has emerged

as the engine room for both economic growth and

employment.

Given the importance of South Africas small

business sector and the daunting task individuals

face when starting small businesses, KwaZulu-

Natals development finance agency, the Ithala

Development Finance Corporation Limited(Ithala), in consultation and co-operation w ith the

KwaZulu-Natal Department of Economic

Development and Tourism, has produced

this useful Small Business Booklet to guide

prospect ive ent repreneurs through the

fundamentals of launching and operating a small

business enterprise in South Africa today. It is not

designed to provide com prehensive answers to business-

related questions, but, instead, offers an insight to :

business types;

selecting the appropriate entity th rough w hich to dobusiness;

purchasing an existing business;

compili ng a business plan; and

business finance.

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introduction


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To make a success of a business, one must be driven and

it is therefore important to start an enterprise for the righ t

reasons and with realistic goals in m ind.

Before committing oneself, it would be useful to ask and

answer a wide range of questions, including those that

follow. Only then will one be sure about taking the first

step tow ards entrepreneurship.

Why do I want to start my own business? It is

important that you are honest with yourself and that

you establish the true reason for wanting to see

yourself in business.

What kind of business would I like to operate? You

must ensure that you have the necessary and relevant

knowledge and skills. This may involve you having

worked for someone else within a particular industry to

gain experience.

Do I have the required knowledge, training, certificates,

interest, attitude and freedom to undertake a particular

business? Once obtained, you should

undertake intense self-analysis.

Is there a market for the products or

services I wish to deliver? A brief market

survey in the area will assist you to

determine market needs.

Where do I intend locating my business?

It is imperative that you have a clear idea of

location; this plays an important role in

determining business success.

Is it possible to operate my business from

hom e? Is the business type such that you

need not operate from formal business

premises, thus saving on expenses.

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what drives oneto start a business?


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Do I need to meet any requirements in order to work

from home? Determine your local councils by-laws in

this regard.

When do I take the first step? It is necessary to plan

meticulously for the day on which your business wil l be

launched. Dont rush.

When will I begin delivering my products/services?

Determine when your business will be fully operational.

Plan to meet this critical deadline.

Does business require a partner, manager and

employees? You may need staff. You need to interview

and select staff who will complement you and your

business.

What should I know about accounting and book-keeping?

You may wish to contract with a book-keeping /

accounting firm to assist with the bookkeeping / record-

keeping of the business.

From whom will I buy supplies? Have you established

a relationship with prospective suppliers?

What form will my legal structure take? Should I trade

as a sole proprietor, close corporation, company or

partnership? Obtain advice from a firm of attorneys

and your accountant.

How will I combine my personal life with my business

operation? Starting a business requires personal

sacrifi ces. You must reconcile your famil y and yourselfto this fact.

How much money do I need to start my business?

Determine your f inancial requirements for equipment,

stock and w orking capital.

How am I going to finance my business? Determine

the level of self-funding you can afford and how much

loan finance you will r equire.

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Where should I go for f inancial assistance? Approach

financial institutions, such as Ithala and other

commercial banks. They will give you professional advice.

It should be noted that successfully answering these

questions does not guarantee business success.

Regrettably there simply are no guarantees. However,

those who take the time and trouble to answer these

questions, have a better chance of success than those who

do not.

identifyingbusiness types

There are three general business types, namely

manufacturing, trading and service enterprises.

MANUFACTURING BUSINESS

A m anufacturing business involves the processing of raw

materials and the production of finished goods or other

forms of raw m aterial. An advantage of a manufacturing

business is that occasionally certain Government

incentives are made available, provided the necessary

requirements are met.

In establishing a new manufacturingbusiness an entrepreneur must face

a n d o v e r c o m e a r a n g e o f

constraints. One such constraint is

access to capital. Other issues to consider

include the availability of a suitable site, suitable premises,

adequate raw materials, appropriate infrastructure,

distance from suppliers and markets and the necessary

production expertise.

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TRADING BUSINESS

A trading business involves the buying and selling of

already manufactured goods to the benefit of end-user

customers. Very few special Governm ent incentives are

made available to entrepreneurs active in this sector.

An advantage of operating a trading business is that

detailed technical knowledge is unnecessary, although an

above average general knowledge of products is vital. It is

generally considered that establishing a trading business

is not as comp lex as launching a manufacturing concern.

SERVICE BUSINESS

A service business is any business concerned with the

supply of a service to customers, such as the provision of

personal advice, based on some special knowledge. A

service business is normally the simplest and most

inexpensive to launch, and would include such activities

as business consulting, book-keeping and accounting,

plum bing, carpentry and the like.

Entrepreneurship is defined as : The pursuit of oppor tunity

without regard to resources currently controlled .

Entrepreneurship is thus synonym ous with the bearing of

risk and application of innovation. Entering business

inevitably carries a degree of risk, which may be offset

through an understanding of problems and constraints

associated with entrepreneurship.

In identify ing w hich business type to pursue, it is necessary

to evaluate ones knowledge, skills and interests within a

particular business environm ent.

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There are essentially four business entit ies in South Afr ica,

namely Sole Proprietorships, Partnerships, Close

Corpo rations and Companies.

SOLE PROPRIETORSHIP(single person b usiness)

A sole proprietorship is a business owned and operated by

a single person. This is the easiest, least costly

and least regulated type of business to access.

The proprietor has sole responsibility and

control, but is personally liable for all claims,

taxes and debts against the business, as well as

for injuries caused by or to employees during

their employment. This business entity mayexpose the individual to litigation and is

normally only selected by smaller business

types.

PARTNERSHIP

A partnership is an incorporated business

owned and operated by two or more people,

but limited to 20 persons (natural or juristic persons)

except fo r partnerships of certain recognised professionals,

including accountants and attorneys, where up to 50

persons may be incorporated.

A partnership m ay be formed by w ay of a verbal

agreement between the parties. As with a sole

proprietorship partners are responsible for

any debts of the partnership. No other

statutory provisions govern partnerships. It is

important to be aware that each partner may be held

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personally liable, just as in a proprietorship. In addition ,

partners are taxed in their personal capacity. There are no

separate legal entities and no registration formalities exist

in relation to partnerships. Individuals may also carry on

business as sole proprietors.

CLOSE CORPORATION

A close corporation m ay be formed by at least one, but not

more than 10 members. The only persons qualified to

become members are :

Natural persons, a trustee of a testamentary trust who is

not a j uristic person, trustee, administrator and executor or

curator for a member who is insolvent, deceased, mentallydisordered or otherwise incapable of m anaging his or her

affairs.

The objective of the Close Corporation Act of 1984 is to

provide for a simpler in-expensive business entity for the

single entrepreneur o r a few participants.

The close corporation is governed by the Close

Corporation Act. The close corporation has a legal

identity distinct from its members. Each member stands in

a relationship of faith/trust to the corporation and may

become liable to the corporation for losses suffered as a

result of a breach of faith. However, unless the mem bers

have signed deeds of surety, they cannot be sued in their

personal capacities for the ccs debts and would thus not

be liable for such debts. When borrowing money,

however, most financial institutions would require

the members to sign surety for the debt. The members

may enter into a membership agreement to govern

relationships between them.

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ADVANTAGES OF A CLOSE CORPORATION

Format ion : It is very easy to fo rm.

Liab il it y : The members have l im ited l iab il ity. Taxat ion : Taxat ion is separate to that of the

members.

Legal Entity : The Close Corporation retains a

separate legal identity from members.

DISADVANTAGES OF A CLOSE CORPORATION

Membership is limited to not m ore than 10 members.

Financial institutions m ay require sureties from each

member before granting a loan.

COMPANIES

All companies must register wi th the registrar of

Companies and comply with the provisions of the

Companies Act.

A company is treated as a separate and distinct unit from

its shareholders. A company m ay enter into contracts and

may sue or be sued in its own name. Legally it is treated as

an artificial person having rights and duties of its

own. This business entity is usually the most

costly to form . Further, audited financial state-

ments are required.

ADVANTAGES OF A COMPANY

Liab il it y : Limited l iab il it y for share

holders.

Continuity : Transferability of shares and

thereby ownership.

Credibility : Easier to raise capital.

Possible to separate business functions into

different companies.

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DISADVANTAGES OF A COMPANY

More expensive to launch and maintain.

Legal form alities are sometim es cumbersome. Control and regulations.

Possible liability of shareholders.

Private companies may not offer shares to the public.

Companies have share capital and may be divided into two

types, namely private and publi c companies.

PRIVATE COMPANY

A private company is one which, by it s articles

restricts the right to transfer its shares;

lim its the num ber of its shareholders (other than

employees of the company) to 50; and

prohibit s any offer for the subscription of any shares

or debentures to the public.

Private companies are recognised by the words

(Proprietary) Limi ted or (Pty) Ltd.

PUBLIC COMPANY

A public company is not subject to the restrictions of a

private company. The name of the public company ends

with the words Limited . A public company may offer

shares to the public. It must have at least seven

shareholders (unless wholly-owned) and at least two directors.

BUSINESS TRUST

Generally speaking, a trust is not a legal personality. It is

represented by the trustee who embodies it and holds title.

He/she deals wi th the property in which t rust rights exist.

Contracts with regard to the rights and property affected

by tr usts are the contracts of the trustee. He/she in person,

is liable for them. He/she is not acting as an agent or

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representative of another. He/she is acting for himself/

herself, but with fudiciary obligations to others. It differs

from a corporation or partnership, in that the former is a

legal person, whilst the latter is an association of

individuals united for transaction of business.

Co-operative

A co-operative is a form of business that is voluntarily

owned and controlled by i ts users. It is operated for them on

a cost basis. Examples of co-operative businesses are: farm

supply, financial purchasing, health, day care and housing.

purchasing anexisting business

Purchasing an established business is the quickest and

most direct way to enter the business environment.

However, thorough investigation is required in order to

avoid taking on the problems of other. The extent of the

investigation wi ll depend largely on the size and nature of

the business. It is therefore crucially important t o consult

attorneys. The following issues should be closely

investigated before any sale agreement is finalised.

REASON FOR SELLING

Establish why the present owner is selling. Very few

people sell their businesses if the enterprise is doing well,

although entrepreneurs enjoying success are forced into

selling because of age, failing health and the like. Extra

care should be taken should investigations reveal a

business is being sold because of poor performance or

location, a declining customer base, or sim ilar problems.

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PURCHASE PRICE

Determine exactly what you are buying. Many different

assets are involved, such as equipment, machinery, stock,land and buil ding. There are num erous factors to

consider before assessing whether the selling price is fair.

A point of departure should be to closely examine audited

financial statements covering at least the past three years.

You should consider requesting sight of bank statements

and compare these figures against tax return reports and

investigate any discrepancies. Also consider interview ing

some of the Sellers employees.

SETTING YOUR PRICE

Set the price you are prepared to pay for the business from

a financial perspective. There are various formulae used to

calculate the fair value of a business. Most selling prices

include aspects such as goodwill, the difference between

the book value of the assets and the selling price of the

business. Verify with your accountant whether the

goodw ill is a realistic figure.

It is recomm ended that you consult with your accountant,

business broker or financier regarding a fair selling price

for the business.

OTHER THINGS TO LOOK FOR

Thoroughly check the stock. Stock items may well be

old and/or damaged.

Investigate any lease agreements, including the expiry

date and rental escalation clause.

Thoroughly investigate the existing creditors and

debtors of the business.

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Check the asset register, consider using a

knowledgeable person, such as a professional

business evaluator, to ensure all the assets of thebusiness are properly accounted for.

Check with local authorities regarding licencing

requirements, permits and zoning.

Establish whether there are any future obligations

such as guarantees, warrantees, unfulfilled contracts,

pending damage claims and lawsuits which would

affect the business.

Investigate any new environmental standards that

wil l affect the future of the business.

Check the agreements with employees andcustomers.

WHAT IS A BUSINESS PLAN

A Business plan is a docum ent which prov ides a detailed

programme outlining all the aspects that will impact on

your business, including the environm ent in which you w ill

operate. To a degree, a business plan is a sellin gdocument and the description should therefore also be

attractive, as you will almost certainly use this document

to sell you r idea to potential investors or bankers.

Drawing up a business plan is a time consuming, though

very necessary, exercise, but by doing your research, you

wil l learn a lot about yourself and the proposed business.

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developing abusiness plan


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THE IMPORTANCE OF A BUSINESS PLAN

It is important that you provide sufficient time to conduct

adequate research and to compile your business plan.If prepared properly, this document will allow one to :

Put your thoughts dow n on paper in a logical order.

Address pitfalls in the planning stages.

Measure performance against targets set in your plan.

Use the business plan to apply for financial assistance.

Use the business plan as an effective decision making

tool.

There are nine steps involved in the formulation of a

business plan.

STEP ONE

PREPARE A COVER PAGE AND CONTENTS PAGE

The cover page should be well presented, business-like,

neat and professional. It should portray the following

information :

Name(s) of the owner(s);

Name of the business;

The address and telephone number of the owner(s) of

the business; and

Type of business.

The headings within the contents page should be clearly

detailed and numbered.


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STEP TWO

INTRODUCTION AND BACKGROUND INFORMATION

The introduction should be concise and interesting,

covering the following points:

Describe briefly w hat you intend producing or selling;

Where the business is situated;

When you intend launching;

Why you believe the business to be viable; and

Short, medium and long-term business goals.

It is important that your introduction be brief, yet

addresses the above requirements.

STEP THREE

PURCHASING PLAN

It is vital that you determine who your

suppliers will be and that you develop a

relationship with such businesses. In this

regard, you should address the follow ing :

Explain products needed to be purchased;

Detail the suppliers from w hom you intendpurchasing and highlight lead times

between the placing of o rders and delivery

thereof;

Explain the credit terms suppliers are prepared to offer,

if any; and

Highlight the reliability of individual suppliers as

regards their ability to deliver.


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STEP FOUR

MANUFACTURING PLAN

(If applicable to your proposed business)

It is necessary to document exactly how you propose man-

ufacturing your product, detailing the facilities

available and the resources required. In particular, you

should address the following :

A brief step-by-step description of the production

process;

Provide a graphic layout of the factory floor;

Provide a w orkflow diagram of the processes involved

in your manufacturing programme;

List all the required equipment, clearly detailing the

production ou tput of such machinery/equipment; and

Detail the costing and pricing of the products to be

manufactured.

STEP FIVE

MARKETING PLAN

Investors usually look very closely at this

section of a business plan prior to deciding

whether to invest. Because sales figu res are

the most difficult to forecast accurately, thesefigures are the most im portant to justify.

The following should be contained in the marketing plan :

Explain and substantiate your specific target market or

customers base. This may be broken down into

geographical areas, income groups, age and sex

groupings. It may be necessary to contact your local


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council or Central Statist ical Services f or the necessary

inf orm atio n. The following probing questions may assist

in determining your m arket, namely:

Who are your customers ?

Where are they ?

Why do they buy ?

When do they buy ?

Explain what market share you expect to capture

and why.

Determine you r competitors and consider :

Where they are;

How long they have been in business;

How m uch of the m arket they enjoy; and

What are their strengths and weaknesses.

Explain any differences between your products/

services and those of your competitors.

Also explain how you intend packaging, selling and

promoting your products, detailing distribution networks.

Considering the above is necessary to enable you to

quantify your market in terms of monthly sales to

determine an annual sales figures for the first year. This is

normally the most difficult part of the business plan.

Contact your accountant or nearest Ithala office for

guidance.

STEP SIX

FINANCIAL PLAN

One of the most important aspects in starting a business is

the preparation of a financial forecast.


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The financial plan should contain the following

information :

A detailed income statement for a projected period of12 months (see Annexure A for an example);

From the income statement generate a monthly cash

flow forecast for the business (see Annexure B for an

example);

Breakdown your financial requirements into three

categories, namely, building, equipment and working

capital;

Reflect the amount of your own contribution/or funds

that you have available to invest in the business;

Detail levels of security o r collateral you have available,providing an estimate of the market values. Fixed

deposits, fixed property, life policies with surrender

values, endowment policies are all reasonable forms

of security and are normally accepted by financial

institutions; and

A complete set of financial statements reflecting at

least the past two years, should be attached in the case

of an existing business.

If you experience difficulty in respect of t he financial plan,

it is advisable to contact your accountant or nearest Ithala

office, for guidance.

STEP SEVEN

PERSONNEL PLAN

The people involved in the business must have the

necessary skills and experience if the business is to be

successful. To adequately assess personnel, you should :


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Detail the educational qualifications, previous work

experience and training courses attended by the

owner(s) (you might attach a brief CV of the owner(s));

Indicate the number of staff to be employed;

Indicate the job designations and functions within the

business;

Detail personnel remuneration packages, incorporating

provisions for leave pay, annual bonus and the like;

Indicate any plans for expanding in the short-term and

corresponding increases in the staff complement; and

Indicate the owner(s) remuneration requirements,

considering their personal commitments.

STEP EIGHT CONCLUSION

Just as your introduction should be interesting, so yourconclusion should be positive and motivating.

It should compri se :

A summ ary of why you believe your business plan will

succeed; and

Why you believe finance should be approved.

Other sources of inform ation

When compiling a business plan it will be

necessary to research much of what is requiredfor such a document. The follow ing are someof the resources available to you :

Ithala offices : Client Liaison Advisors;

Central Statistical Services;

Council for Scienti fic and Industrial Research(CSIR);

National Productivity Institute (NPI);

Local Councils;

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Department of Trade and Industry (DTI);

Chamber of Commerce;

Magazines; Libraries;

Universities;

Competitors;

Own experiences;

Local Business Service Centres;

SMME Desk at the Department of Economic

Development and Tourism; and

Durban Manufacturing Advisory Centre

THE WAY FORWARD

Should you require financial assistance, you are now in a

position to submit your business plan to a financial

institution, such as Ithala and other commercial banks, in

order to seek loan finance.

Remember that you have gone to great lengths to develop

an accurate and comprehensive business plan, and that

such a plan must be regularly evaluated. Ensure that you

measure your actual performance against forecasts set.

STEP NINE

GENERAL

If you are applying to Ithala or other commercial banks, for

financial assistance, it is necessary to attach your

business plan to a completed application form. Ensure all the

necessary supporting documentation as listed on the last

page of such an application is also provided You m ay


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submit your application, business plan and supporting

documents to your nearest Ithala office, or branch of

commercial bank selected. In the case of an application to

Ithala, the application o r enquiry should be directed to our

Client Liaison Advisor.

Before launching a business it is necessary to establish

your financial requirements. Adequate start-up capital is

critical to any fledgling enterprise and failure to plan for

this is a major cause of small business failure. Before you

open for business, it is critical to p lan how much cash you

wi ll need. You should also ask yourself what you needmoney for; how much you need; does the amount allow

for unexpected developments; how and when you will

repay the money; can you afford the cost of borrowing;

and what is the outlook for business in general and your

business in particular?

Initially, a financier is likely to ask three questions :

How wil l you use the loan?

How much do you need to borrow ?

How wil l you repay the loan?

By carefully planning your f inancial projections

(see business plan section) you will

successfully negotiate the situation of future

shortages of funds. Borrow carefully in order

not t o over-extend yourself.

finance


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21

SOURCES OF FINANCE

There are a number of sources of finance available to the

small business entrepreneur. These may include:

Formal Financial Intermediaries such as:

Provincial Development Finance Corporation

Commercial Banks

International Financial Institut ions

Inform al Financial Intermediaries such as:

Khula Retail Financial Intermediaries

Stockvels

Non-Governm ent Organisations (NGO's)

Other Famil y and friends

Trade credit. Remem ber, that if trade credit can be

arranged and if you do not over extend yourself,

this is regarded as a good form of financing as it is

normally interest-free: The supplier "builds" his

return into the price of the article anyway, so use

trade credit where possible.

It is important to shop around for fi nance in order to get

the best possible deal.


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PRESENTATION

The appearance of a business is important in terms of

projecting a professional image. The business premisemust be clean, displays tidy and high traffic flow flow areasused effectively. Pricing of items must be clear andcompetitive.

SECURITY

Fraud and theft are a comm on occurence in business todayand regular stock-taking is therefore an effective method ofcontrolling thi s problem. Without this control measure thenet profit of the business may be adversely affected,resulting, possibly in business failure.

MARKET TRENDS AND OPPOSITION ACTIVITY

It is vitally important for a business to move w ith the tim esin order to capture its potential market share. Beingpro-active in this regard will enhance business, whereasneglect in this regard could result in the loss of turnoverand, ultim ately, failure.

It is also important to remain aware of your oppositionsactivities in order to counter various products,promotions, and the like.

MERCHANDISING

If the stock and sales are monitored correctly,slow moving products may be discontinued,a n d f a s t m o v i n g p r o d u c t s p r o m o t e d

simultaneously, in order to prevent loss ofprofit by the good sellers replacing the slowsellers, thus increasing turnover.

PURCHASING

In order to survive in a very competitivemarket, one needs to shop around for the bestprices in order to retain profit margins or evenenhance them.

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operating and managinga business


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PROMOTING

The promotion of new l ines, products and even old stock,

carried out in conjunction with suppliers is a vital part ofany business. If possible, take new products on

consignment so that they may be returned if they do not

sell.

SELLING ON CREDIT

Avoid buying for cash and selling to clients on credit. The

opposite, however, is obviously greatly beneficial, to the

entrepreneur. Attempt to obtain your goods over 90 days

and sell for cash.

CREDIT CONTROL

Strict credit control measures must be implemented toensure that outstanding debt is paid timeously.

CUSTOMER SATISFACTION

All these controls may be of no use if the customer leaves

your place of business dissatisfied. It is extremely

important to meet customer needs. Be friendly and polite

and ensure that your customers return regularly.

Remember that w ithout customers you have no business.

WHAT IS FRANCHISING

Franchising i s simply a way of doing business whereby the

owner (franchisor) of a proven business system grants the

right by contract to an entrepreneur (franchisee) to

the franchiseoption


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establish a similar business which will be run according to

strict quality standards and trademarks. The franchisee

receives marketing support, detailed work manuals,

start-up training assistance, advice on equipment and raw

material selection and regular visits by the franchisor.

FORMS OF FRANCHISES

MANUFACTURER - RETAILER

A manufacturer takes the responsibility for production,

marketing and national advertising whilst the dealer

accepts responsib ilit y for sales levels in his/her area. A

prime example of this is the giant mo tor car concern, Ford.

MANUFACTURER - WHOLESALER

A m a n u f a c t u r e r g r a n t s a f r a n c h i s e t o awholesaler who, in turn, sells to a retailer.

Example: Coca Cola which franchises the

syrup to w holesalers, who bottle the product

and then sell it to retailers.

VOLUNTARY CHAIN OR CO-OPERATIVES

Retailers set up franchise co-operatives for the benefit of

bulk buying and national advertising. Good examples of

this approach include Spar, Link and Plus Chemists.

SERVICE - TRADE MARK

This system is know as business form at franchising. This

is the type of franchising with which most of us are

fami liar. It includes Kentucky Fried Chicken, Steers, Supa

Quick, Wim py and the like. It is known as business format,

because the franchisor provides the entire business format

including product, store lay-out, clear manuals and

standards, quality control and ongoing managerial support.


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REQUIREMENTS FROM A

FRANCHISEE APPLICANT

Before a financial institution considers financing a

franchise, the prospective franchisee must have been

screened and accepted by the franchisor. This norm ally

involves the franchisee having to pay an up-front f ranchise

fee to the franchisor. Without this, mo st franchise

companies will not consider talking to a financier about

proposals, projections and costs.

A trading site must be identified and be accepted by the

franchisor (in terms of the geographical trading rights of

other f ranchisees).

A normal business viability study must be completed

taking into account the franchisees business acumen, theviability of the business and security offered, with the crux

being the potential turnover. Gross profit and expenditure

details are normally available from the franchisor

according to industry norms and success or failure

ultimately depends on achieving the necessary minimum

turnovers. Industry norms greatly assist the financier in

completing projections. An own contribution of not less than

20% would normally be required from a franchisee applicant.

When starting a business, it is im portant to ensure that the

business does not transgress the law. One should register

yourself and or the business with the follow ing instituti ons

Inland Revenue, with regards to provisional tax;

Inland Revenue, registering as a VAT Vendor (if the

turnover of the business is to exceed R150 000 per

annum);

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Workmans Compensation Commissioner, if you

employ staff;

Sampro, if you are to provide music within yourbusiness premises;

Department of Manpower : Unemployment Insurance

Fund, if you employ staff;

Join t Services Board in respect of regional services and

establishment levies;

Department of Trade and Industry with regards to

import/export requirements; and

Any other councils/organisations within your type of

industry that by l aw, you have to register with.

It is also advisable that you study o ther legislati ons such as

the Basic Conditions of Employment Act and the

Employment Equity Act. As far as practicable, get a

professional legal opinion on these legal matters.

26


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Ithala regionalbranch offices

(in each case the enquiry should be directed to our Client

Liaison Advisor) :

Durban Branch Office

(Game City, Umgeni Road)

P O Box 47662

GREYVILLE 4023

Tel. (031) 3091073

Fax (031) 3091086

Umlazi Branch Office

P O Box 54001

UMLAZI 4031

Tel. (031) 9071155

Fax (031) 9075113

Port Shepstone Branch Office

P O Box 1015

PORT SHEPSTONE4240

Tel. (0396) 823254

Fax (0396) 820703

Ngw elezana Branch offi ce

P O Box 292

EMPANGENI 3880

Tel. (0351) 942301Fax (0351) 942358

Jozini Branch Office

Private Bag X005

JOZINI 3969

Tel. (035) 5721223

Fax (035) 5721322

Ulundi Branch Office

P O Box 87

ULUNDI 3838

Tel. (0358) 700361

Fax (0358) 700814

Madadeni Branch Office

P O Box 1281

NEWCASTLE 2940

Tel. (03431) 92078

Fax (03431) 91721

Ezakheni Branch Office

P O Box 780

LADYSMITH 3370

Tel. (0361) 341415

Fax (0361) 341896

Pietermaritzburg

Branch Office

P O Box 2573

PIETERMARITZBURG 3200

Tel. (0331) 458351Fax (0331) 946468

Alice Street Branch Office

127 Alice Street

DURBAN 4000

Tel. & Fax (031) 3092529


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projected income and

expenditue statement

DETAILS NOTES DEPARTMENT 1 DEPARTMENT 2 TOTAL

R R R

Income 1

Less cost of sales 2

Gross income

Stock turnover rate

Average stock

Less overheads

Staff salaries/wages 3

Telephone 4

Accounting fees 5

Elect/water 6

Insurance 7

Transport 8

Owner drawings 9

Stationery 10

Advertising 11

Rental 12

Security 13

Repairs and maintenance 14

Depreciation 15

Bank charges 16

Nett operating income before tax

And interestLess Proposed loan interest 17

Less other interest 18

Nett income before tax

Less tax 19

Nett income after tax


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Starting & Running your Own business

DEVELOPMENT FINANCE CORPORATION LIMITED

Department ofEconomic Developmentand TourismKwaZulu-Natal

Paton Tupper Associates


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ithala starting and running your own business_booklet

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