Category Archives: Business

Having Business Assets can Save the Day

When thinking about investing wisely for your small business it always good to consider the type of returns you can expect. Marketing, market research and high quality training are all investments with positive effects. Although essential, these are examples of investments that have to be revisited as markets and the industry change.

Now think long term and consider your businesses assets. What cards do you have tucked up your sleeve for a rainy day?

Why should a business invest?

Imagine how much revenue can get lost by not being able to replace tired equipment or to expand as demand grows.

To ensure the necessary capital is available when the time comes to expand a business, it is important to put away funds from the onset of the venture. An investment specifically reserved for financing a larger premises or new equipment means usual cash flow wouldn’t have to be tapped when the time for expansion arises.

The value of broad spectrum assets

Liquid assets like investment portfolios are great for allowing your business capital to work for you. The other perk of this type of investment is instant access to your money when your business is in a temporary fix.

Besides your liquid assets, it’s good to have some good old brick and mortar behind your name. According to Property News, every business should aspire to own their premises. Think about it – instead of your rent being a monthly expense, it could be a payment towards a commercial mortgage. Paying off your property slowly but surely adds to your business capital and it means you are able to expand, revamp and operate your office space as you would like to.

Property investment for your business

With the current South African interest rate looking mighty friendly and the value of property on the rise, 2014 is promising to be a great year for investing. So why stop at owning your own premises, perhaps this is the time to consider buying multiple commercial spaces to lease out.

Even residential property in your business’ name is a worthwhile investment that can be rented out for a steady income. Consider the possibility of investing in residential property that can be rezoned as commercial space and put to work as rentable office space.

When the time comes to take your business venture to the next level, selling a property investment is the substantial financial injection that can make all the difference.

Where to invest in SA property

With its status as being SA’s millionaire city, and new developments happening in urban as well as business sectors, just about any property for sale in Johannesburg is bound to be a good investment. However, the innovative development happening in Cape Town due to its Design Capital status is also worth keeping an eye on.

With 2014 being the year to buy property, it is worth taking the plunge and buying some real business assets for your company.



When Cashflow is Low and Debt is High

Did you know that even Donald Trump has had his issues with debt? The real-estate mogul racked up $3.5 billion in business debt and $900 million in personal debt before filing for bankruptcy in 1991.

It took several years, but the Apprentice star eventually got his finances in order. What we can take away from this is that anyone can go through hard times – and find a way out.

Most businesses need to deal with debt at some point. When your cashflow isn’t high enough to pay off all your bills though, it’s time to reassess your payment strategy.

Know where you stand

The first thing you need to do is orientate your business in relation to how much money is coming in and how much needs to be going out. In other words, make a cashflow projection for the next quarter, or even the next year. Be as realistic as possible or else it’s not going to help you.

Also, make a list all your debts, as well as how much you are paying on interest.

Prioritise expenses and debts

Can you cut down on your expenses? Prioritise your bills. Some expenses are absolutely indispensable to the running of your business, like utilities, employee wages, taxes, and rent.  Others can be put on hold, decreased or cancelled altogether.

Some things are not essential to the running of your business, like insurance, but should still be high on your priority list. It’s too dangerous not to be covered with business insurance. Check to see if there is a more affordable coverage plan you can switch to though.

Your debt also needs to be prioritised. Remember that it’s not the creditor who yells the loudest or makes the most threats that should be at the top of your list. Make sure you pay off your secured debt or debt you have personally guaranteed, because if you default on these the consequences are severe. Unsecured debt, like credit cards, is still a priority but not as much so.

Restructure debt

While it won’t decrease how much you have to pay, by restructuring your debts you can make payment less of a burden on your cashflow.

If you’re having trouble paying your debts, speak to the people you owe money to see if they’re willing to freeze your debts. People can be understanding if you’re honest about your situation. Explain to them that it’s in their best interest that your business remain solvent, because they’ll retain a long-term customer.

Also, if you owe several payments to the same creditor, you might be able to consolidate debt into one lump sum and simply pay one amount over a longer period.

You can also put some of your payment on credit, such as stock, and pay it off later. Be careful of this option though, as you don’t want to have to face more payment difficulties down the line.

By making some adjustments, you can pay off your debts, maximise your cashflow, and get your business into a stronger financial position. Don’t worry if your progress is gradual. Any progress, so long as it is consistent, is going to get you out the red.

Thoughtful ways to improve your business’ security

Security is an essential feature of any business. It shouldn’t be considered as secondary to profit – or rather, what today, we call “survival” – but as concurrent. By not considering what should go into security, you run the risk of losing everything that allows you to even have a business in the first place. But, even upon installing some function of security, that’s no guarantee the security is any good or appropriate.

Good security versus mere security

There’s a difference between closing a door and locking it. A closed door is, in some places, sufficient, such as within family homes and among friends and family. Knocking is regarded as respectful. Yet, for potential intruders, this is of course insufficient. Similarly, merely having security is not the same as having sufficient or proper security: by this we mean, security that actually responds to possible dangers that your business might face.

It’s the difference between locking your car or house and having an alarm system. In the one case, people can overcome it, but even the mere illusion of an alarm is sometimes sufficient to dissuade burglars.

You must be aware of your situation: Do you live in a particularly hostile area? Is it quiet and residential? How quick are the response times? How valuable are the items in the business complex? Do you have a safe onsite or elsewhere?

By consulting security experts, we can work on a case-by-case basis to determine the best solution for a business’ security – whether it’s a matter of installing proper window security, proper CCTV control room equipment, or even protections for laptops.

The point is: Security isn’t one thing because the things we are securing aren’t just one thing.

The key form of security

The best and most effective form of security is prevention via vigilance.

As many businesses know, even with security staff can get lazy and are not particularly vigilant – because they assume that security installed means less people will take chances. Thieves will take chances – they know that onsite staff are lacking in responses and vigilance. It’s not enough to have staff, they also need to be trained properly.

Similarly it’s not enough to have, say, mirrors. You also need to have a good lay out of the store, such that the mirrors are visible to your (trained) staff to spot potential thieves. Installing cameras is good, but what point do they serve if they can only see the top of someone’s head and not the rest of them, to indicate any identifying markers?

So, even with security, we need to assess whether the security being implemented is working and is functioning appropriately. And, majority, we need to ensure that we are practicing constant vigilance and awareness since preventing crime is better than combatting it – or rather is the best way to combat it.

How to Choose the Perfect Location for Your Second Business

When a business is running smoothly, it’s usually time to start thinking about expansion. This is of course provided you have the cash flow to support a second venture. But if everything is in order, it’s time to start scouting for a location.

It’s imperative to choose wisely before signing on the dotted line for a premises. As a business owner with one successful business already, it should be common knowledge that the location of a business can make it r sink it.

The first clue as to where you should open shop next would be the area from which most of your business queries are coming from. Should you, for instance, be in Cape Town’s CBD but people from Somerset West and Strand are purchasing your products, it could be an indicator of a gap in the market in those areas. So then you’d want to start looking into property for sale in Somerset West or Strand.

Still, do not neglect to research the demographics of the people living in close proximity of the location you’re considering. You don’t want to put up shop anywhere in town – you want to be close to the people who are buying your products or services. Collect all available data, even if takes doing a survey, then evaluate said data to help you decide whether a location is right for your business.

It might sound counterproductive, but consider setting up shop close to a competitor. People are already travelling to the area for the type of product or service you provide, so why not cash in on the existing traffic? Part of this strategy would be in-depth research into your competitors to see what they’re offering and at what prices. You’d want to at least match, but preferably beat their product or service offering.

Other factors that you should consider when looking at properties or location are the flow of traffic, accessibility and visibility:

The flow of traffic: Imagine you run a breakfast spot. Would you want your business to be on the side of the road most people drive along in the morning, or on the opposite side? Naturally you’d want to be on the side people use most on their way to work. This consideration might not be applicable to all businesses, but if you run any sort of establishment that people like to ‘pop in to’, do keep this one in mind.

Accessibility: It should be easy for people to access your business, whether they do it by car or on foot. Look at the building’s location in relation to main roads, where the front door is located (it should face the road or parking lot), and whether there is enough parking on the grounds.

Visibility: Would your shop be visible to the people who need to see it? Think about that breakfast spot again. If it’s located two streets up from the main road, how will drivers know about it? It would be much better to be next to the main road, in plain sight of drivers.

These are some of the most important factors to consider when choosing a location for your second business, but by asking yourself a number of other important questions, you can ensure that you pick the perfect location.





Get Along with Everyone

South Africans live in the Rainbow nation. As one of our national television stations used to declare, “We are one”. And that we are, but keep in mind that we’re still 11 different cultures sharing one country. In an average day, you can interview a person with Xhosa heritage, be greeted by an Afrikaans receptionist and sit next to a Sotho person during a business flight.

Most of us navigate these situation without so much as a second thought as to the culture of the person we’re facing. But this could lead to miscommunication and misunderstandings. It’s then easy to brush these off to the other person having a bad day or not being a people’s person, for instance, but it just be a cultural difference.

Say the latter is the case, won’t your day be much more pleasant, and perhaps even efficient, if you made yourself aware of the differences between all of the cultures in our country?

Educate yourself on South Africa’s cultures

The first step to understanding someone from another culture, is to learn more about their culture. This does not mean an extensive knowledge of every last tradition is required; just familiarise yourself with the basics.

You could build this body of knowledge by doing a search on the internet, but it would be much more interesting to sit down and chat with someone from particular culture. They’ll have more to share than any website could ever have.

But don’t generalise

South Africa, and the world as a whole, is becoming more Westernised by the day. This means you should never generalise about a culture – the person you’re exchanging pleasantries with could be of a new generation, with newer ways of thinking and doing.

Personality of course also plays a role in communication. The person’s culture might dictate one thing, but their personality, shaped by life experiences and innate qualities, could make them behave in exactly the opposite way. Keep this mind!

Interact with different cultures

So know you’re armed with all of this information on all the cultures. Now what? Now it’s time to integrate. Don’t just sit at your normal table during lunch time, speaking only to the people (and possibly) cultures you’re comfortable with. Interact and communicate with colleagues from other cultures too. Practice does in fact make perfect, so you’ll be interacting faultless in no time.

Learn the language

Being able to speak someone’s language will earn you instant respect. The fact that it will make communication easier goes without saying. Start small, with basic words. Pick them up from the new friends you’ve made at work or enrol in an evening class.

Eventually start reading news articles and other short snippets so that you can recognise the written words as well. Don’t understand anything? Then it’s as easy as consulting a language book or website for the correct Sesotho translation, or Xhosa translation, or Zulu translation… you’ll be able to find them all easily!

Let us not forget to be open minded too. Different cultures comes with different views. So be open to being challenged. You might be introduced to a whole new way of thinking and who knows – you might end up a far more cultured and enriched person.