Issue Date: 
Monday, August 25, 2014

Ease of opening a business

By Werner van Rooyen

www.how2tender.com

25 August 2014

South Africa was recently rated 44th when comes to the ease of doing business according to a survey that is done yearly by the World Bank. This is all good and well if you are an overseas investor with a lot of money and looking for new places to invest in. However, if you are a South African with little or no money, doing and or starting a business in South Africa can be a daunting task!

To begin with, the statistics are against you when starting a business. It is said that 80%-90% of all new start-up businesses fail within the first two years. Of the remaining 10%-20% another 80% bites in the dust within the next three years. So of the original businesses that start out only a handful survive the first five years. These are scary statistics!

You think the large family concern that you are working for is safe from failing, wrong again, most family owned businesses last not much longer than twenty five years. Strangely enough, when it comes to family owned businesses the second generation either loses it all or they make a huge success, even more so than the first generation. The problem is that the second generation usually makes a mess of things and the reasons are fairly obvious. The reasons range from lack of interest to spoiled brats that do not know the meaning of hard work. But mainly because siblings despise the business because their parents worked so hard to make a success that they neglected the children and now the children don`t want anything to do with the business.

But let us get back to the ease of opening a business in South Africa.

You will have to have a fixed address from which you are going to operate your business. Keep this in mind because South African legislation dictates that you must supply a legitimate address when registering for a multitude of things.

If you are going to open a legitimate business (and I really hope this is the case) then the second thing you will need is a bank account. This is a fairly easy process and I recommend that you start out with a savings account with little or no bank charges if you starting out with a small one man business. Obviously you must consider the needs of the business when opening a bank account but try and keep the initial costs to a bare minimum. You will need proof of identity as well as proof of your address to open a bank account. If you are in a partnership you will also have to have a partnership agreement. In the case of a company you will have to have the company registration documents on hand to give to the bank.

Once you have a bank account you can start receiving money into your business. You will find that once you start selling your product or service, your customers are going to ask you for a tax invoice. This is where the fun starts. If you are registered for Value Added Tax or VAT in short, there would be no problem to supply your customers with a tax invoice, but if you are not registered for VAT this is where it becomes tricky. The South African public and business folk are so brainwashed in this regard that hardly anyone knows what a tax invoice actually is. All they know is that their auditors demand a tax invoice and if they cannot supply a tax invoice to the auditors they are in trouble. A tax invoice can only be issued by a business or vendor that is registered for VAT. There are several instances where a business or vendor can register for VAT, but the number one requirement is if the turnover of the business exceeds R1.2 million per year.!

Next week we will continue with more information on the ease of doing business in South Africa when we will focus on SARS registration.

In the meantime please visit our website www.how2tender.com for information like this and much more.

Until next time - happy tendering.

Title Closing Date Tender No.
Supply, Delivery and Off-loading of Perishable Provisions at Klerksdorp, Rooigrond and Rustenburg Management Areas (North -West Province) 2018-11-06 11:00 LMN 04/ 2018 NORTH - WEST
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in Rietfontein Land Reform Farm in the Soutpan area in Masilonyana Local Municipality within Lejweleputswa District Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0003 (2018/ 2019)
Supply , Delivery and Off-loading of Perishable Provisions at Barberton ,Bethal and Witbank management areas( Mpumalanga Province) 2018-11-06 11:00 LMN 05/ 2018 MPUMALANGA
Appointment of a service provider to render security guarding services at the Department of Public Service and Administration for a period of two (2) years. 2018-10-12 11:00 DPSA002/ 2018
Provision of Geographical Information Solution (GIS) including maintenance and support services. 2018-10-24 11:00 RFP 29/ 2018
6000 units of emollient bp cream with chlorocresol 500g, or equivalent 2018-10-08 11:00 ZnqLS443/ 18gaz
Butterworth Magistrate: Repairs & Servicing of Air-Conditioners. 2018-10-11 11:00 MTH 59/ 2018
36 units of Dextran 40, 10% in sodium chloride injection iv solution, 0.9% 500ml (Rheomacrodex), or equivalent 2018-10-08 11:00 ZnqLS442/ 18gaz
Drain cleaning and verge maintenance on Road P242, from 0.00KM TO 9.9KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 10/ 2018- 19
Drain cleaning and verge maintenance on main road P100 section 1&2 between chainage 0.00KM to chainage 14.5KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 05/ 2018- 19
Supply and Delivery of Dairy products and Maize Drink to the Gauteng Provincial Government (GPG) Departments and State Information Technology Agency (SITA) for a period of 36 months 2018-10-12 11:00 GT/ GPT/ 126/ 2018
Betterment and graveling on road D755 from KM 1.80 TO KM 2.80. 2018-09-27 11:00 CDUR/ 620/ S/ 03/ 2018
Supply and Delivery of Self-Adhesive Pharmaceutical Labels to all Hospitals/Institutions under the control of the Department of Health, Western Cape Government for a period of three (3) years 2018-10-19 11:00 WCGHSC0168/ 2018
Installation of Speed humps and Rumble strips on P129. 2018-10-23 11:00 ZNT373T/ C237/ 12000/ S/ 13
Request for Proposals to assist the ARC with the travel, accommodation and conference services for all the ARC offices nationally 2018-10-22 11:00 ARC/ 11/ 09/ 18
Installation of Speed humps and Rumble strips on P1-8. 2018-10-23 11:00 ZNT373T/ C237/ 12000/ S/ 12
Refrigerated Cross-Border Transport and clearing of cargo; including payment of import Value Added Tax (VAT) for the import of the Foot-and-Mouth Disease (FMD) vaccines from Botswana via the Kopfontein Border Post 2018-10-29 11:00 ARC/
Installation of Speed humps and Rumble strips on P12-2.: Civil Engineering services: Tender must be registered as grade 2CE only with the CIDB register of contractors.Tender must be registered as Emerging Contractors in the Vukuzakhe Emerging Contractor Development Programme (as per database of Department of Transport) 2018-10-23 11:00 ZNT373T/ C237/ 12000/ S/ 11
Bontle Ke Botho (BKB) Greening Project 2018/19 2018-10-12 11:00 GT/ GDARD/ 130/ 2018
Betterment & Re-graveling of D88 in the Amajuba District. 2018-10-18 11:00 C253/ 1819/ BR/ 796

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Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

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