The beginning of a business is not as glamorous as many may think. It is also limiting to pursue the mammoth task of building an entity that requires a substantial amount of capital in the beginning.
The reality is that, in order to start, it simply requires being frugal and a bit of bootstrapping. You then build and accumulate, little by little, until you have enough to build what you had originally wanted.
If I had to start all over with only R5 000, I’d start an agency but this time, a WordPress website design company. The growth of SMMEs in South Africa presents a huge opportunity for web designers that are able to provide fast turnaround times and cost-effective pricing packages.
– Register the business via FNB (and open a bank account) for R175
– Get a laptop on contract, includes router with 5GB data, for roughly R529 per month. This is about R1587 for 3 months.
– Get an additional 20GB LTE data package for roughly R240 a month (R720 over 3 months)
– Use free accounting software supplied by FNB
– Create partnerships with local universities or colleges to supply my company with interns as part of their “workplace integration programme”. I’d get Public Relations interns (to build a public brand for the agency and get the word out there in a cost-effective manner as well as run our social media accounts) as well as multimedia design students to handle web design projects. Interns will have to have their own laptops.
– Spend R300 a month on Facebook advertising
– Build a website on WordPress, using free templates, and setup SEO for Google’s directory.
– I’d setup an office at home to mitigate rental costs.
– Buy office furniture using credit and pay roughly R500 a month (R1500 over 3 months)
The idea is to build basic WordPress websites at R4500 with a R3500 project profit. To meet monthly obligations, the company would need to generate a minimum gross profit of R1569 a month.
The business’ overheads are kept low, it is making roughly 77% profit per project, it has a team of roughly 3 interns (at no cost) and if the agency gets one sale per month (at R4500), it can potentially make a net profit of 42% per month.
The initial R5000 that was invested in the business, will be paid back in roughly 3 months should the agency land only one sale of R4500 per month.