![]() In general, you have the option of setting up a private company, sole proprietorship, partnership or business trust. Choose the correct business entity: When setting up your business, seek advice on the most appropriate business entity for your purposes.When compiling your business plan, ensure that it includes a detailed financial plan that includes product funding, budgeting, loan repayments, cashflow, salaries, risk management, sales projections, profit margins and break-even points. Have a plan: A business plan is the foundation of your entire venture and is the platform on which your whole business will be built.For younger entrepreneurs who have not yet amassed any personal wealth, starting a new business can be particularly challenging – but, with smart money management and careful strategising, it can be done. Lack of funding remains the greatest barrier to entry for young entrepreneurs, with the 2018 Real State of Entrepreneurship Survey revealing that 88% of South African entrepreneurs are self-funded. Developing and implementing a strong financial strategy from the get-go is essential for the future success of your business. Over and above the business idea, entrepreneurs need to have financial management skills including basic accounting, cash-flow management and investment fundamentals. One of the main reasons that small business fail is a lack of upfront and ongoing financial planning. It is generally accepted that the first five years of business can be the most difficult for small businesses, with stats revealing that 50% of small business fail within this period. On the other hand, they face significant challenges, which include start-up funding, managing expenses until profitability is reached and surviving through uncertain economic conditions. The beauty of SMEs is that they are generally innovative and can quickly bring new ideas to the market. SMEs include small business, medium-size enterprises, family businesses, informal micro-enterprises, street traders and home-based services. According to Woolworths chairman Simon Susman, SMEs make up 90% of formal businesses in South Africa and provide employment to about 60% of the workforce – which means that successful SMEs can have a significant impact on our economy. Given that 6.6 million South Africans do not have work, this entrepreneurial trend should be encouraged and supported. A sluggish economy, job losses and high unemployment means that more and more people are becoming self-employed, or starting their own businesses. ![]() In a country where 29% of the population is unemployed, the need for small and medium-sized businesses (SMEs) to succeed is critical.
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