In South Africa, there are a lot of small businesses which are successful. These businesses are registered but do not compete with big businesses. However, they are the biggest contributors to the economy. Another category of small businesses creating jobs in South Africa is informal businesses.
Informal businesses are those run by people who are not employed in the formal sector. These businesses form a large portion of the economy but are not included in the Gross Domestic Product (GDP) of the country. Informal businesses are unregistered and unregulated.
In this article, we explore informal businesses that are successful in South Africa and which ones are best to start.
Kota Business
Starting a kota business is much easier than most businesses. A kota business can be run from your own kitchen, out of a small container, shack, or small building. Some people sell their kotas on the street.
To start this kota business, you will need a few basic pieces of equipment. This will include a deep fryer for your chips, a frying pan and stove top for other ingredients and a fridge to store the ingredients and cool drinks (if you are going to sell it).
Another important factor to take into consideration is location. If you are starting a kota business in the township, you need to pick a good location as there are a lot of similar businesses throughout the township. If you want to stand out, you can pick an area within the city or in the suburbs.
Car Wash Business
A car wash business is a lucrative informal business. You will only need equipment such as a hose pipe, buckets, soap, and tyre polish, and you will also need access to water. You will also need to ensure you find the right location. Location is important because you don’t want to introduce a car wash business where there are already a few around, making competition high.
To make your business even more successful, you can offer other services such as shisanyama. Or to save costs, partner with an existing shisanyama and offer your car wash services.
Photography and Videography Business
A photography business can be a good informal business option. You can photograph people on the street, at events, parties or functions. It also has low advertising costs because you can use WhatsApp as your advertising platform and means of communicating with customers. You can use Instagram as a portfolio that showcases your work.
To start a photography business, you need a camera to take pictures. Cameras can be quite pricey so you can either buy a second-hand one or use your phone. Using your phone means you will have to be ‘fluent’ in various editing apps, so your pictures come out nicely.
Tutoring Business
Tutoring is a viable business to start. A lot of parents are looking for tutors to help their children with schoolwork, especially if they are working and cannot take the time to assist their children. You can take advantage of this market by advertising your tutoring business. Alternatively, you can join an organisation like Tutor Doctor which offers a platform for tutors looking for jobs.
You can start your tutoring business by advertising on WhatsApp, posters and flyers. You will need to showcase your skills on the advertising channels. Show people what subjects you can tutor, which grades you can tutor and what your rate is.
Laundry and Cleaning Business
This business is a 2-in-1 venture. You can either run them as separate businesses or combine the two services.
For the laundry business, you can do it in the comfort of your own home. Some clients might request that you fetch and deliver the laundry.
The most important piece of equipment you need is a washing machine but sometimes when starting a business you can’t afford it. Handwashing is an option, but you must know it is tiring and will damage your hands.
For your cleaning business, you can start with houses around your area. After making a bit of a profit, you can expand your business to different areas. As the business grows, you can hire more people to take on more cleaning jobs. An alternative solution is to sign up on platforms like SweepSouth where you can get a lot of jobs in your area and outside your area.
Shisanyama Business
This is probably one of the most popular businesses in South Africa. Braai is a popular South African meal, making it a business idea that thrives in the informal sector. Most Shisanyama places are in the townships or city centres but businesses like the Braai Block have popped up in more suburban areas.
You can be part of this profitable market by starting your own shisanyama business. You can run this from your own home or (similar to the car wash business) join an existing business that doesn’t offer shisanyama. You will need somewhere to cook your meat; this can be a traditional braai stand or an electric outside grill. You can also offer drinks and sides for your customers.
These informal business ideas are guaranteed to bring in profits and create a successful business. Remember, once your business grows, you will need to take it from informal to formal. This means legally registering your business with the Companies and Intellectual Property Commission (CIPC) and ensuring you follow regulations that apply to your business.
For more in-depth help with your business, book an appointment with one of our experts on the advice page.
