How to start a small business

Starting your own business can be an exciting and rewarding experience. But there’s a lot to consider and you’ll need to be prepared to put in the work to get your business off the ground.

Part of this will involve writing a business plan, deciding on the legal structure of your business and getting funding to help your business expand and grow. 

So, take a deep breath, grab a cup of tea, and check out our comprehensive guide that covers all you need to know about how to start a small business.

Why start your own business?

There are multiple reasons why you might want to start your own business. Perhaps the most attractive one is that you get to be your own boss. This means you can work more flexibly, pick your own hours and decide what type of work you want to do. 

Going it alone can mean you get to focus on something you’re interested in while also having a varied role. One minute you could be dealing with suppliers, the next you could be tackling accountancy spreadsheets. Working for yourself can also be very profitable, provided you have the right business idea and the right mindset.

To give yourself the best chances of success, you’ll need to give some serious thought to the type of business you want to run. Think about what you’re interested in as well as what you’re good at. Do people regularly come to you for advice about certain topics and what do you already have experience in? 

Also consider whether there’s a gap in the market that you could fill. It’s important to conduct some market research and check whether a service is viable by looking at Google Trends

Once you’ve got a business idea, you need to think about whether you want to set up an online business or whether you’d prefer to have physical premises.  

When is the best time to start a business?

The timing to start a business can vary depending on your circumstances, industry trends, and market conditions. There isn’t a universally “best” time to start a business, as factors such as personal readiness, financial stability, and market opportunities play a role.

Some entrepreneurs may find good moments during economic upswings or when consumer demand for certain products or services is high. Others may choose to launch their business during downturns, benefitting from lower costs and less competition.

The decision to start a business should be based on careful consideration of both internal and external factors, including personal goals, financial resources, industry knowledge, and market research. It’s important to assess the risks and rewards related to starting a business and to be prepared to adapt to changing circumstances throughout the business journey.

What are some easy businesses to start?

There are several easy-to-start businesses in South Africa for various interests and skill sets. Here are some examples:

  • Consulting services: Offering consulting services in areas such as marketing, finance, human resources, or business management can be a low-cost business to start, particularly if you have expertise in a specific industry.
  • Freelance writing or content creation: If you have strong writing skills, starting a freelance writing or content creation business can be relatively straightforward. You can offer services such as copywriting, blogging, or editing to businesses.
  • Event planning or coordination: Planning and coordinating events such as weddings, parties, or corporate functions can be a rewarding and easy-to-start business, especially if you have organisational skills and a creative flair.
  • Online retail or e-commerce: Starting an online retail business can be a simple way to enter the entrepreneurial world, particularly if you have a niche product or market.
  • Tutoring or teaching: If you have expertise in a particular subject or skill, offering tutoring or teaching services can be a good business opportunity. You can provide one-on-one lessons, group classes, or online courses.
  • Cleaning or janitorial services: Starting a cleaning or janitorial services business requires minimal investment in equipment and supplies and can be an easy business to start, particularly if you have experience in cleaning or are willing to learn.
  • Pet sitting or dog walking: Providing pet sitting, dog walking, or pet grooming services can be a simple and low-cost business to start, particularly if you have a love for animals.
  • Handyman services: Offering handyman services such as home repairs, maintenance, or landscaping can be a straightforward business to start, particularly if you have skills in plumbing, electrical work, or gardening.

What is the most profitable type of business?

Determining the most profitable type of business in South Africa can be challenging, as profitability varies depending on factors such as industry trends, market demand, and individual business strategies.

However, certain industries tend to show strong profitability potential, including technology and software development, renewable energy, healthcare services, agriculture, and e-commerce. Each of these sectors presents opportunities for innovation, growth, and meeting changing consumer needs.

The most profitable type of business for an entrepreneur in South Africa depends on factors such as their skills, experience, resources, and market insights. Conducting thorough market research and identifying niche opportunities can help entrepreneurs maximise profitability in their chosen industry.

What are the requirements to start a business?

When you’ve decided on the type of business you want, you’re ready to start getting it up and running. 

1. Register a business name

Naming your business can be a bit of fun but it can also be frustrating if you find someone else has the same or similar name to the one you wanted. Your business name needs to be unique, it must not be offensive and it must appeal to your target audience.

It’s worth carrying out a search on Google before you become set on a particular business name. That way you’ll know whether anyone else has a similar name to yours. 

2. Establish a legal structure

The next step is to choose your legal structure. The structure you choose will impact how your business is taxed and how much tax you’ll pay. Setting up as a sole trader is the simplest option. You’ll need to register your business so that you can pay income tax through your self-assessment tax return each year. Note that being a sole trader means you’re personally liable for any business debts.

If you’re starting your business with a partner or partners, setting up a partnership will be more appropriate. You’ll share responsibility for your business’ debts and its profits and losses. Each partner pays tax on their portion of the profits through their own personal self-assessment tax return.  

Alternatively, you might prefer to set up a limited company. This means your business finances will be separate to your personal finances and you’ll need to pay corporation tax on your profits. This could work out cheaper if you’re a higher rate taxpayer. 

Setting up a limited company can also be more suitable if you plan to hire employees as you can pay salaries through the pay as you earn (PAYE) scheme. 

3. Write your business plan

A business plan is an important document that outlines to potential investors what your business does and what your future plans are. Even if you don’t plan to apply for finance yet, a business plan can help you get a better idea of your strategic goals and any potential problems that could arise. 

A business plan should include the following:

  • An executive summary: This should go at the start of your plan but needs to be written last. It should describe your business and outline your objectives. 
    • Products and services: This needs to outline what products or services you’ll be offering, how you’ll source the materials and how much they will cost. 
  • Market analysis: Show that you’ve examined the market and looked at competitors to establish that there is a demand for the service you’ll be offering. Be sure to include your target market, as well as market size, growth rate and trends. 
  • Financial projections: This should include revenue, expenses, cash flow and profit. Usually, five years of projected financial statements are enough. 
  • Management team and strategies: Highlight all the key players involved in the business and what qualifications they have. Also include the risk management strategies you propose. 
  • Marketing plan: This should outline how you’re going to promote your business and how much you expect to spend on marketing. It can also be worth including a SWOT analysis

4. Secure funding and finance to set up and grow your business

When starting a business, unless you have a significant sum of savings lurking in an account somewhere, it’s likely you’ll need to borrow funds to help get your business set up and later expand.

You could think about approaching friends and family to see if they would be willing to loan you the money as this can be cheaper than going to the banks. But this also has the potential to ruin your relationship if your business fails to take off and you can’t afford to repay the money.

Another option is to find out whether you qualify for a startup loan. This type of loan is designed to help new businesses launch and expand and will give you a lump sum that you then repay in monthly instalments over a set term, with interest on top. To qualify, your business must have been trading for no more than 36 months and you must be able to prove that you were unable to obtain a loan from alternative sources and that you can afford the repayments. 

Further finance options to consider include:

5. Establish a marketing strategy

Once you’ve got your funding in place, it’s time to think about how you’re going to market your business. 

As a first step, it’s important to build a website for your business. Website builders can help guide you through the process and you can choose to have a standard information website or an e-commerce site if you’re selling products online. 

You’ll also need to optimise your website for search engines so that people can easily find your website and understand what it offers. 

Additionally, it’s worth building a social media presence through platforms like Facebook, Twitter, LinkedIn and/or Instagram. Post content that’s interesting and relevant to your target market and also helps drive customers back to your website. 

Finally, consider writing regular blog posts, sending emails and newsletters and using flyers and print marketing to advertise your business. 

6. Secure business insurance

Having the right insurance in place is crucial to running a successful business. Some of the business insurance policies to consider are outlined below:

  • Public liability insurance. This covers you if you’re taken to court because your business activities caused damage to someone’s property or resulted in injury. It can cover your legal costs and any compensation you might be required to pay.
  • Employer’s liability insurance. You’ll need to have this type of insurance if you employ staff. It provides cover for compensation claims if an employee becomes ill or injures themselves due to the work they carry out for you. 
  • Professional indemnity insurance. This will protect you in the event a client loses money as a result of negligence in the services you’ve provided. It can cover legal fees and compensation payments. 
  • Contents insurance: This protects your business equipment and other physical belongings in the event they are damaged or stolen. Some policies will also offer cover for items you take outside the business premises. 
  • Business interruption insurance: This covers you for loss of income during periods where your business can’t operate due to an unexpected event such as damage to your premises by fire or flooding, or the breakdown of essential equipment. 

7. Register for tax

Before you start trading, you must register your business. If you’re a sole trader you’ll need to register to be able to file a self-assessment tax return

If your VAT taxable turnover exceeds R85,000 in any month over the last 12 months, you’ll also need to register for VAT and complete a VAT return each quarter. 

Finally, if you’re hiring staff, you will need to register for PAYE.

8. Establish secure record storing

A big part of making sure you pay the correct amount of tax is to stay organised and keep accurate business records. Without this, completing your tax returns can be extremely time-consuming and you’re more likely to make mistakes. 

Opening a business bank account will help you keep your personal and business accounts separate, making it much easier to see what’s what when it comes to completing your tax returns. There’s also a wide range of accounting software that can help make record-keeping a lot easier. Many of these tools will also help you streamline your invoicing process, helping you to chase late payments and make paying invoices a lot quicker and hassle-free for your customers. 

Which types of businesses can I start from home?

Many types of businesses can be successfully operated from home, offering flexibility and convenience for entrepreneurs. Here are some examples:

  • Freelancing: Offering freelance services such as writing, graphic design, web development, or consulting allows individuals to work remotely and serve clients from anywhere.
  • E-commerce: Starting an online store allows entrepreneurs to run a retail business from home without the need for a physical storefront.
  • Consulting or coaching: Providing consulting services in areas such as business, marketing, finance, or personal development can be done remotely, allowing consultants to work with clients globally from their home office.
  • Virtual assistance: Providing virtual assistant services to businesses such as administrative support, customer service, or social media management, can be done remotely from a home office.
  • Arts and crafts: Creating and selling handmade crafts, artwork, or DIY products through online marketplaces or at local craft fairs allows artisans to turn their creative hobbies into home-based businesses.
  • Blogging or content creation: Starting a blog, YouTube channel, or podcast and monetising it through advertising, sponsorships, or affiliate marketing can be done from home.

How do I do this with no money?

You don’t have to have thousands of pounds stashed away in a savings account to get a new business off the ground. 

Setting up a YouTube channel or using TikTok are easy ways to start out small and can enable you to earn some cash. You could also think about providing services like dog walking or personal training. Creating a Google Business Profile will help to get word out about your business, as will advertising via social media.

But, as mentioned earlier, there are also a number of funding options you could explore for new businesses. Business grants, for example, are usually awarded by the government or other companies and there are hundreds of different grants you can apply for across South Africa. Often they will be targeted towards specific industries, community groups or types of business, so check to see if you qualify. 

Alternatively, find out whether you might be able to apply for a startup loan, or look into seeking investment through crowdfunding. You’re more likely to be successful with this if you have a unique business idea and you can show that it has a lot of growth potential. However, you might need to give your investors a share in the company or a reward in return for their cash.

You might also be able to secure investment from a business angel. These are high net worth individuals who prefer to invest in startups and early stage businesses. In return for their investment, they receive shares in the company. They can also offer their expertise and contacts to help your business grow. 

Get started with Swoop

Keen to get your small business off the ground but not sure how to secure the necessary funding? Our team of experts here at Swoop will be happy to talk through your funding requirements and help match you with the most suitable choice for your new business. Get started today.


Written by

Rachel Wait

Rachel has been writing about finance and consumer affairs for over a decade, helping people to get to grips with their finances and cut through the jargon. She's written for a range of websites and national newspapers including MoneySuperMarket, Money to the Masses, Forbes UK, and Mail on Sunday. Rachel has covered almost every financial topic, from car insurance and credit cards, to business bank accounts and mortgages.

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