10 Cheap Businesses You Can Start In South Africa Aimed At The Local Market There are a few businesses that are more likely to thrive in South Africa than others. Here's a list of 10 that meet the needs of the country's people.
By Pritesh Ruthun •
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Brand South Africa believes that despite a slowing global economy, South Africa remains one of the most promising emerging markets in the world. It is also Africa's most sophisticated and diverse economy, according to the organisation.
This diverse composition of the South African market and consumers discerning tastes, which vary from region to region and province, represents a good opportunity for the entrepreneurially-minded to capitalise on.
So, why not start a business that caters to the particular needs of South African clientele? Here are a few business ideas that can be started with relatively low capital input:
- Bunny Chow and Kota Food Retail Business
- Uniquely South African Clothing Business
- Ready-to-Eat Baby Food Business
- Mathematics Upskilling Business
- Low Sugar Refreshment Business
- Aerial Drone Photography Business
- Small Batch Beer Brewing Business
- Niche Project management Business
- Tax Consulting Specialist for Start-Up Businesses
- Mobile Hair and Beauty Specialist Business
Unknown1. Bunny Chow and Kota Food Retail Business
Start-up capital required: From R450
You could open a take away outlet or start a food cart or deliver "on-demand' to office buildings. Whichever way you do it, you can build a successful business feeding South African's appetite for Bunny Chows and Kotas.
Marks Mahudi started his Kota business, called Marks Bunny Chow, in Orlando East, Soweto, after he lost his job as a tour guide driver in 2007. He was jobless for three months when he decided to start his own small business. But he only had R450 in his pocket and his wife wanted the money to buy sishebo ingredients for the whole month.
Mahudi knew he had to find a solution to beat his unemployment so with three loaves of bread, one bag of potatoes and his wife's small deep fryer, he started selling Kotas from his backyard. Now, Mahudi runs three retail locations in Soweto and employs 28 people.
Why start this type of business?
South Africans love Bunny Chows and Kotas as they remain affordable and tasty compared to the rising costs of other food items on the market. A burger, chips and cooldrink combo can set you back up to R60 at a popular franchise, while a Bunny Chow or Kota can cost half that amount. In Durban, there's an event called the Bunny Chow Barometer, which is hosted annually. 1000s of people descend on Durban's Blue Lagoon (The Green Hub) by the edge of the Umgeni river, to determine who makes Durban's best bunny.
What you would need to get started
To start with as little capital input as possible, you can run the whole show yourself like Mahudi did with his Kota business. Alternatively, you can begin to build rapport with food and ingredient suppliers in the area that you'd like to operate. It's also good to decide if you want a bricks and mortar location or if you're going to leverage the growing trend of starting a food truck business.
Unknown2. Uniquely South African Clothing Business
Start-up capital required: R7000 to R139 000 as an independent label
Take a leaf out of Babatunde's book. Established in central Johannesburg in 2009, Babatunde has grown from a headwear experiment into a concept brand. The company's goal is to become a global brand, by fusing African colours and prints with Western Shapes. Its founders say the prints represent the uniqueness of each human being:
"The colours embody the future. And the shapes express the vision and structure of success and prosperity." All of the brand's products are handmade in South Africa using only African fabrics.
Why start this type of business?
South Africa's heritage is wide and diverse and younger generations of local consumers are looking to purchase items that resonate with where they come from. This is why businesses like Babatunde and KISUA are gaining momentum in the fashion space.
KISUA collaborates with established and emerging African designers, giving them an online and shopfront platform to retail ready-to-wear capsule collections with a modern African appeal. KISUA funds and produces all African-inspired collections so there is no financial burden placed on designers. In addition, the KISUA Designer Fund supports the designers with whom the brand collaborates, and through the fund, a portion of every sale is paid to the relevant designer.
What you would need to get started
It's advised to build your business acumen on what it takes to run successful supply chains in the clothing manufacturing industry. You'll need to form links with suppliers, and if you're going to offer handmade goods you'll need to find artisans to hire. A business plan can help you take a step-by-step approach to starting your own uniquely relevant fashion brand in South Africa.
Bigstock3. Ready-to-Eat Baby Food Business
Start-up capital required: R10 000 to R100 000 (Estimated)
According to South African business-to-business market research firm, Insight Survey, the main drivers behind significant growth in the baby food market over the past few years include: rising population of working women, growth in organised retail marketing, and parents' concern for the nutrition of their babies. Infant formula holds the largest share of the baby food market followed by prepared baby food. New baby food manufacturers are emerging and established manufacturers are creating new packaging to capitalise on this market while meeting strict regulations in the sector.
Why start this type of business?
It's believed that as more South African women take on jobs and build careers, the need for pre-prepared baby food will continue to rise. This has been the case in other parts of the world, and to date, the global baby food industry generates around USD55 billion in revenue. Locally produced Olli Organic Baby Food, which is certified organic and offers a range of jarred purees and cereals, targets parents of babies from 6 months of age onwards.
Bumbles started out small, but today is a national supplier to chains such as Dischem and Pick "n Pay. Owned by Nthabe Zondo and Billie-Clare Dryden-Schofield, the pair combine decades of business experience and mothers' love to pursue their passion for healthy living.
Bumbles Baby Food uses only the freshest produce with superfood ingredients such as quinoa, beetroot, peas, baby spinach, blueberries and freshly puréed carrots and sweet potato, as well as sourcing organic ingredients wherever possible. "We make our baby food with the same love and dedication as every mom makes it for their own baby; we peel, we chop, we blend and we cook! Each different variant has been created in the Bumbles kitchen and, more importantly, tried and tested by moms in the public domain, as well as babies and professional taste testers," the founders say.
What you would need to get started
You'll need to conduct market research to see if you're going to offer a unique product that no other baby food manufacturer is offering, or whether you're going to go to market with similar offerings to compete on price. Insight Survey notes that parents don't mind spending money on more expensive baby foods if the food maker prominently markets the "healthiness' of their food. With a little research complete, try making some food at home in your kitchen to sell to friends and family. Then seek a commercial kitchen partner to ramp things up.
Bigstock4. Mathematics Upskilling Business
Start-up capital required: R10 000 (Estimated)
If you are skilled at maths teaching, you can start you own business that focuses on upskilling South Africa's youth when it comes to number crunching. According to Lloyd Gordon, Pietermaritzburg-based founder of Open Omnia, South African children need to access mathematics education. In an interview with SMESouthAfrica, Gordon discussed his app-based maths teaching business:
"Open Omnia is a web-based programme which aims to assist students who struggle with mathematics to better understand the subject by breaking down the formulas and providing step-by-step illustrations for mathematical equations."
Why start this type of business?
Several news reports allude to the fact that South Africa's mathematics and science vocations are neglected. In fact, BusinessTech reported last year that South Africa's poor ranking of 47th out of 63 countries in the latest IMD World Digital Competitiveness Ranking is a direct result of an ineffective education system that "neglects' maths and science.
This is why businesses that focus on maths and science education are doing well in South Africa. Open Omnia and Tuta-me, serve as good examples of businesses using technology to deliver maths education cost-effectively in the country.
What you would need to get started
If you are going to teach maths, you'll need to have the credentials to do so, which means ensuring you're registered as an education provider. Registering not only gives you credibility, it also provides parents of young children with peace-of-mind that you appreciate the value of systems and processes. You could opt to teach via online classes through video streaming, or you could launch an app, or you could hire local teaching rooms and host weekend classes for kids. Conduct some market research to see what the best option would be for you depending on the capital you have in hand.
iStockphoto5. Low-Sugar Refreshment Business
Start-up capital required: R10 000 – R100 000 (Estimated)
According to Bryony Sinclair from the World Cancer Research Fund International, sugary drink companies target low and middle-income countries. In South Africa, these sugar barons have been met with a sugar tax that has added to the wholesale cost of their products. But, customers have been asked to accept small package sizes to offset the price difference of the sugar tax. You could start you own low-sugar refreshment company to take on the giants in this industry. Whether you opt for juice, fizzy drinks or milk-based products, your input costs will vary. However, nothing stops you from starting ultra-lean, with a "Lemonade stand' at a local shopping centre or mall.
Why start this type of business?
More than four times as many people have Type II diabetes today compared to 36 years ago, according to the World Health Organisation. In 1980, 108 million people were diagnosed with diabetes worldwide. In South Africa, 7% of adults aged 21 to 79 have diabetes. Even the Coca-Cola company is looking at ways to supply drinks with less sugar content. Reformulation efforts have seen sugar reductions across its key brands, while a rising number of consumers are also switching from regular to zero sugar versions of Coke's brands.
The Duchess was launched by The Duchess Drinks Company in September 2016 and it is quickly becoming a favourite amongst healthy, successful, and discerning individuals. The Duchess is the brainchild of Johannes Le Roux, a Cape Town-native with a background in advertising and brand launches. He partnered with Inus Smuts, a long-time friend and collaborator, to develop The Duchess with local botanists. Both sugar-free and alcohol-free, The Duchess can be enjoyed by anyone looking to reduce their sugar intake, while still enjoying a crispy-fresh gin-inspired refreshment.
What you would need to get started
You'd need to know about supply chains and production. There's also health and safety requirements to adhere to. When you start out and production is low, you might be able to manage on your own, but eventually you will need to scale with employees and service providers if this is going to be a big business move for you. Look at the brands out there and assess whether you can bring a product to market that not only competes on sugar content, but also on value. You'll have to get creative to compete with the bigger businesses in the industry as you grow.
CPO Magazine6. Aerial Drone Photography Business
Start-up capital required: From R10 000 to R150 000 (Estimated)
In recent years, hobby and commercial drone pilots are rising in numbers. This has led to the growing popularity of drone-powered aerial photography. Photographic industry insiders say that as drone prices drop, their technology improves and they become ever more accessible to people, more drone-photo businesses will launch. Your specialist drone photography business can target high-end event production businesses for project work, or you can become the go-to photographer for large corporates that run site operations.
Why start this type of business?
South Africa's drone license requirements are amongst the most relaxed in the world, making it arguably easier to become a drone pilot here than in any other country in Africa. Due to the topographical layout of the country it can be challenging for businesses to perform site reconnaissance and explore new locations. Across the board, from Agribusiness to Mining, drones can assist in monitoring, surveillance and data gathering.
AerialShots' founders say the company was born out of a search for that something extra in video production; a way to obtain interesting and unique camera angles. "Our interest in drones started out in building our own, but as drone technology grew we were able to purchase a model that allowed us to capture images that were once out of reach," they say. What defines AerialShots is that the company is a camera-crew-first, with a drone as another piece of gear. "We are skilled in capturing creative shots as well as offering access to licensed drone pilots. The combination of these offerings is important as it enables us to capture beautiful and artistic visuals that customers want."
What you would need to get started
You'll need a bit of aviation experience, as flying a drone requires knowledge of flight controls and terminologies. Also, you'll need the drone that's going to serve as your workhorse, flying around to capture images for clients. It's advised to contact a drone aviation academy to find out about courses, and to familiarise yourself with the drone laws that govern when, where and how a drone can be used to record data.
Rawpixel Unsplash7. Small Batch Beer Brewing Business
Start-up capital required: R100 000
Living up to its namesake, you could brew small batch craft beer for a growing market of craft brew drinkers in the country. The small batch beer brewing business is proving highly successful in the local market as consumers look to try new tastes and have new experiences around braais and when having get-togethers. Companies such as the Darling Brewing Company started small, brewing small quantities for independent retailers and restaurants. Now this company supplies Checkers Liquor shops around the country.
Why start this type of business?
The craft brew market is growing in South Arica, as it is in the rest of the world. Standard Bank says that the industry will grow and that the top 5 brands in South Africa are Jack Black, CBC, Darling, Boston and Mitchell's – making up about 3.7 million litres of the eight million litre market.
Standard Bank's Global Consumer Sector team cautions however, that the local craft beer market is very fragmented and is expected to consolidate. "The top 10 craft brands are likely to dominate and take control of the national market. Those on the fringes could fall away due to lack of funding and supply constraints," the bank's spokesmen said in an interview with BusinessTech.
The RedRock Brewing Company started out as a small batch brewery. It's now a leading supplier of craft brews to retail chains such as Checkers Liquor and Liquor City.
Its founders say they took inspiration from rock legends and songs, which the RedRock range of craft ales and beers celebrate. "Red' denotes the colours and passion of the company's people, breath-taking sunsets and the hues of a rich and fruitful earth.
"Rock' is derived from the original South African artists, the San people and their most commonly used medium, overhanging rock faces and cliffs upon which they placed their beautiful pigments. The company explains that each master-brewed RedRock beer tells a different story, but it's always a story rooted in music, the gathering of friends and the inspiration given to us by this amazing country.
What you would need to get started
You'll need some capital in the bank for this business as it does require investment in brewing facilities and raw material. You'll also need to learn how to produce consistent tastes and brews as consumers can be put off by a "sour' experience. Also, to produce beer for resale, you'll need to apply for a Micro Manufacture On & Off license.
Bigstock8. Niche Project Management Business
Start-up capital required: R100 000
PwC once reported that 97% of respondents to a study the firm conducted, considered project management critical to organisational success. 94% of respondents said that project management encourages business growth. This is why so many companies have begun to hire experienced project management consultants. In South Africa, as a project manager, you will be in demand and will be called on to supervise all aspects of a project from inception to completion. With the help of your consulting business, other companies can achieve specific objectives and stay agile in the ever-changing market.
Why start this type of business?
According to TheBalance, start-up costs are minimal if you already have project management training: "If you work with homeowners and home-based business owners, your business can be home-based as well. You can establish yourself as an expert by specialising in certain industries. You have a wide variety of markets to service, including engineering, strategic planning, real estate, financial, health care and more. Your business can be very lucrative once you've become established."
What you would need to get started
Project Management experience is obviously essential, but you'll also need some capital in the bank to bankroll the first few months of management work as you get into cash flow positive cycles with different customers. Investigate whether you're adding any unique value compared to other management services providers. It's also advisable to consult with Project Management South Africa to find out more about its membership programmes.
Bigstock9. Tax Consulting Specialist for Start-Up Businesses
Start-up capital required: R100 000 (Estimated)
In South Africa, there are numerous small businesses in early stages of development. These small businesses are required by law to follow the same tax processes as medium or large businesses, but as small businesses, leaders often experience the tax registration (and compliance) processes stressful. The complex and strict nature of tax returns is often intimidating and quite a burden to small business. As a tax consultant focusing on assisting start-ups, you could become an extension of their business operations and support their financial and strategic objectives.
Why start this type of business?
According to Engineering News, there are 5.6 million small, medium-sized and micro-enterprises (SMMEs) in South Africa. This is the market you will be looking to service with tax consulting advice and assistance. Gaebler.com recommends you have a conversation with someone who is in the business already. A likeminded entrepreneur who owns a tax consulting firm outside of your region might be willing to share their entrepreneurial insights, given that you don't directly compete with them in their area.
What you would need to get started
If you're leaving your job as a tax professional at a large corporate, it's advisable to ensure you have enough saved up to bootstrap the business and carry you through the first few months as you establish a manageable cash flow cycle.
Bigstock10. Mobile Hair and Beauty Specialist Business
Start-up capital required: Around R430 000 (Source)
After spending more than a couple of decades living month-to-month and paying rent to salons to do what she loved, Rubie Williams decided to go all in (R430 000) with her savings. She bought a used motorhome for R84 000 and spent a further R350 000 to suitably convert her vehicle with water facilities, an electrical generator, hair-dryers, sinks, shelves and chairs; basically, all that's needed to run a salon – but on wheels. Williams had just created Hair Nirvana – a mobile beauty business that allows her to boost her income by R167 000. And, she only uses the truck three days a week. She offers all the services you would expect to find in a salon, but you call Williams, make an appointment and she's there to assist.
Why start this type of business?
Beauty businesses are booming in South Africa, with more and more brands emerging in mall locations and shopping centres around the country. In fact, the South African beauty treatment business is doing so well that Sorbet has been launched in the UK. An increasing number of South Africans are making use of beauty services too, according to card payment provider, Sureswipe. Men are also spending on themselves; grooming, haircuts, shaves, you name it. You could become a mobile specialist, catering to office parks or large residential estates.
