South African business experts say that becoming your own boss is not an impossible dream – turning a little money into a business depends on the right attitude.
Entrepreneurial experts including Tshepo Phakathi, economist, banker and Group CEO of Phakathi Holdings, Brian Walsh, founder of The REAL Entrepreneur, and Carol Weaving, MD of Thebe Reed Exhibitions, provide insight on how they would kick-start a viable business with just R1,000.
Phakathi said that success starts with leveraging whatever capital is available. Starting with R1,000, the entrepreneur could apply for a 90:10 matching grant or micro loan, giving him R10,000 in capital to work with.
This could be used to acquire machinery and raw materials to launch a small manufacturing concern.
“I’d opt for something like laundry detergent, for which there is ongoing demand, low input costs and only your labour required,” he said. The entrepreneur should keep reinvesting in the business, later scaling up to employ others, Phakathi said.
With R1,000, you might also look for ‘soft targets’.
“Multilevel marketing opportunities reselling well-known cosmetics or plasticware, for example, tend to offer good margins. If you work with a small base you should be able to double your R1,000 investment within days. If you keep doubling your money every few days, and keep reinvesting in your business, the model will be sustainable,” Phakathi said.
A would-be entrepreneur might also invest in building skills, the entrepreneur said, adding that many skills can be gained for free.
“Say you identify opportunities to offer satellite dish installation services – you might volunteer as an apprentice at a company doing installations in order to learn the skill, then start your own small business offering installations in an area with high demand.”
Brian Walsh said that a successful business can start small.
“If you aim to own a large car wash business, for example, you can start with little more than a bucket and a rag. If you work hard and accumulate money, you can reinvest it in growing the business. You shouldn’t wait for access to finance to get started.”
Walsh believes services businesses offer potentially bigger margins than businesses based on reselling.
“The catch is, to offer a skilled service, you need experience. You need to get your hands dirty to gain that experience, so it’s important to move around, picking up experience. Offer to do menial jobs within the right companies – for free, if necessary – to gain the experience you want and network with the right people.”
Carol Weaving believes skills and networking are the key to kick-starting a new business venture. “Armed with the right knowledge and just a small amount of stock or equipment, the fledgling businessman can quickly double and grow the initial R1,000.”
The business people were speaking ahead of the Small Business Expo and #BuyaBusiness Expo to be held in Johannesburg, in September