In this article, we’ve compiled advice and tips from our five featured entrepreneurs on taking the plunge and starting a business. From funding to the right location to getting the word out, read how they survived the early days
Sourcing funding and keeping overheads low
One of the biggest challenges for start-ups is raising the necessary capital and paying bills during the first few months or even years. It takes time to show a profit – here’s how they coped:
- Share your space: After working out of a parent’s garage, design duo JesseJames found their first office space – which they couldn’t afford on their own. They sub-let the space to like-minded entrepreneurs and hosted events on weekends for extra cash.
- Get creative with investments: Explosive Functional Fitness owner Garth Hendricks was not granted a bank loan due to being self-employed. He raised money for his first gym from his own savings, his father and a former client. “Don't be afraid to approach people to invest, even clients.”
- Be ruthless with your expenses: Clothing retailer Jamie Pike of Benger started making shirts with one roll of fabric. As he sold more shirts, he bought more fabric. “Be ruthless with what you spend money on. Focus on your customer and your product.”
- Keep your day job: The path to breaking even was a long one for Dineplan’s Martin Rose . He still kept a web development job whilst growing his digital reservation service.
- Aim for recurring payments: Recurring payments are excellent for cash flow – something both Dineplan and Explosive Functional Fitness benefited from. Says Martin: “This way you can ‘lock in’ guaranteed payments.”
- Join forces: Tour cooperative SO WE TOO brought together seven businesses under a new brand to offer a township experience with a difference. With minimal start-up capital required, seven heads proved to be better than one!
The perfect location
A workshop, office or retail space is another big expense for first-time entrepreneurs. Do you really need one? Can’t afford one? Not sure it’s the right one? Our entrepreneurs offer tried-and-tested advice:
- Everything is negotiable: Both Martin and Garth negotiated terms with their first landlords. Martin’s landlord gave him a bargain rate and loaned him furniture because he liked the business idea, while Garth negotiated to only pay rent after three months.
- Just start somewhere: From hosting boot camps in public parks to low cost school halls, Garth used what was available to him whilst building a loyal client base.
- Forego a permanent location: Benger’s Jamie Pike started out selling his merchandise at markets, which also taught him valuable lessons about customer service.
- Jump when you find the perfect one: Jamie finally found the perfect location for his shop in Cape Town’s St Georges Mall. Initially many people didn't know where the shop was but Jamie had a gut feeling that it was the right spot. Watch his story.
Marketing ideas – spreading the word
You’ve started your business – now the challenge is letting customers know about your product or service on a shoestring budget. Here’s how our entrepreneurs solved marketing challenges:
- Embrace social media: SO WE TOO’s Raymond Rampolokeng made the most of free social media to grow his brand.
- Pull favours:Two members from SO WE TOO come from advertising backgrounds, which meant that the cooperative could have a logo and branding designed for free.
- Use client testimonials: Powerful before-and-after stories work well for Explosive Functional Fitness, which Garth promotes through email marketing.
- Try it all: Garth also has many stories to tell about marketing that has worked – and not! "From branding my car to canvas banners and handing out flyers - try everything. Any marketing helps.”
- Keep the personal touch: Benger owner Jamie Pike believes in calling clients to notify them about new stock.
- Don’t underestimate word of mouth: For Dineplan, referrals amount to 60-70% of new clients they sign up. Word of mouth also landed JesseJames their first big contract.