Starting a Business on a Limited Budget

Updated on 15 April 2019

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The R5 000 Business Funding Challenge

The money is not coming, NOW WHAT? In this series we interview business owners and those in the know, about what steps they would take to launch a business with limited funds. 
Start your business where you , with what you have, says Lebogang Mokubela. A marketing specialist, Mokubela, is the founder and CEO of Lemok, a township-based digital marketing agency located in Soshanguve, north of Pretoria. The agency is focused on helping SMEs to grow, they specialise in content marketing, email marketing, animation and explainer videos, Google Adwords, social media marketing, website and landing page development. Mokubela previously won the Young Entrepreneur of the Year at the Standard Bank Tshwane Business Awards.

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.

Here is Lebogang’s plan:

How I’d setup the business:

– 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.

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