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Frequently Asked Questions

Here are some frequently asked questions that we’ve received from entrepreneurs and small business owners over the years. If you have a question that isn’t answered below, and isn’t addressed in any of our other articles, please feel free to contact us at

What is the SME Toolkit SA?

The SME Toolkit South Africa is an online resource hub for information related to starting and running small and medium-sized enterprises.

Here at the SME Toolkit SA, we provide how-to articles, business forms, financial tools, online training, and additional resources developed by leading experts. The Toolkit covers all aspects of business set-up and management, from business planning to accounting, financial management, human resources, import/export, legal and insurance matters, marketing, sales, operations, and information technology.

We also provide a range of self-assessment exercises and tools aimed at enabling entrepreneurs like you take control of problem-solving in your business or company, and proactively implement strategies to avoid potential problems.

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Where can I download the Toolkit?

Lucky for you, this answer is simple and straightforward. To access the Toolkit, simply visit and start browsing/using the information and tools that are provided.

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How do I create a business plan?

One of the biggest mistakes would-be entrepreneurs make is to let (even pay) someone else to write their business plans. It’s very important that you write your own business plan because no one understands your concept and your vision for your business better than you do, and a potential financier will pick up if someone else has written it for you. This will count against you. Hence the importance of creating your business plan yourself.

To make this task less daunting, we’ve dedicated an entire section on the Toolkit to creating (and evaluating) business plans. We encourage you to explore this section to find the tools, tips, and tricks you’ll need to create the best possible business plan. That said, your first point of reference should be the “Creating an effective business plan” tutorial. This in-depth tutorial guides you through the process of business plan creation by looking at seven key elements:

  1. Introductory elements;

  2. Business description;

  3. The market;

  4. Development and production;

  5. Sales and marketing;

  6. Management; and

  7. Financials.

For each of these elements, you will find a description, instructions, and tips for avoiding common pitfalls. The tutorial also has a dedicated “Business plan FAQs” section to answer any questions you may have about the template along the way.

Your business plan is not only meant to effectively communicate the viability of your business idea in order to secure finance; it is also supposed to reflect the passion behind and belief you have in the success of your idea. Why not give yourself the best possible chance at success (however that looks to you) by creating an effective business plan?

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How and where can I find finance?

Finding finance is one of the biggest challenges that SMEs, business owners, and entrepreneurs alike face. This is where our section on finding finance comes in. It has a range of articles, tips, and links to the websites of potential SME financiers, depending on your needs and business profile. This is because we understand how difficult it can be not only to secure finance, but to even figure out where to apply for said finance.

It’s important to know that you have a wide variety of avenues you can explore for business finance. The best avenue for you will depend on a number of factors including the nature of your business; the amount of finance you need; what you need the finance for; and whether you have an existing business (and how long you’ve been operational). Your answers will determine whether approaching traditional finance institutions (such as banks), government programs (e.g. SEDA, NEF, or NYDA), private lenders (e.g. angel investors), or alternative financiers (e.g. risk financiers like Business Partners Limited, or fintech companies like Bridgement) would be your best bet.

Explore our article “Small business financiers and investors” to find the appropriate finance option for you. The article’s attached directory is not exhaustive, however, it is an excellent place to start.

Once you understand the “where”, you can tackle the “how”. When applying for financing, make sure you know what the criteria are (and whether you meet them), what documentation is needed, and whether the type/amount/industry of finance is relevant to you. You can typically find out this information by searching online, or contacting the financier/investor directly via email or phone.

Before you meet with a potential financier, it’s also a good idea to practice and perfect your business pitch. Have a look at our article on “Pitching your idea to potential funders”.

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How do I start my own business?

First thing’s first: congratulations on taking this step towards becoming an entrepreneur. Regardless of where you are in your life, deciding to start your own business is a significant milestone. Lucky for you, you’re not alone in this journey. We’re here to help you along the way, by providing you with all the information, templates, and tools you need to get (and keep) going.

If you don’t have an existing business idea, the first point of departure would be to decide what business you want to start. This is a crucial first step, and you shouldn’t take it lightly. The SME Toolkit’s tutorial on “Deciding on a business” will walk you through this process, making sure you ask yourself the right questions, and that starting a business truly is the right idea for you.

Once you’ve decided on a business, you then need to figure out what type of organisation (company) you should start. The article “Deciding on the type of organisation you want to establish” will help you decide whether to go into business alone or with a partner; the type of business organisation to use; and what professional advisers to select. Our section on business formats will also provide you with additional articles to help you make this decision, including registering your company.

So, now that you’ve registered your company, what’s next? It’s time to create a business plan which you can then use to obtain funding. Look at our tutorial on “Creating an effective business plan” and explore our Finding Financing section for more information. We also encourage you to go through our section on starting a business for answers to any other questions you may have about the process.

(Note: The resources above also apply to you if you’re planning on starting a business from home or an online business.)

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How do I know if my business idea will work?

Before you actively take steps towards starting a business, it’s important to find out if the business idea you have is as brilliant as you think it is. There are four steps you can use to find out how viable your business idea is.

  1. Research your idea.

  2. Define the market.

  3. Calculate the figures.

  4. Persevere.

For more information on what you need to do to complete these steps, visit our article “How viable is your new business idea?” for guidance. Often, researching your idea is enough to let you know how unique and viable it is (or isn’t), but defining your market, calculating the associated costs, and actually persevering will ultimately decide whether your business succeeds.

The most important thing you need to remember when you make the decision to start a business is that being an entrepreneur is a constant work-in-progress. You will probably face a number of challenges, and the road to success will likely require considerable research, planning, hard work, and sacrifice. If you’re willing to rise to the challenge, you stand a greater chance of realising your entrepreneurial dreams.

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How do I know if I’m cut out to be an entrepreneur?

Being an entrepreneur is not for everyone. It is often incredibly challenging, and there are many hurdles you will need to overcome. So, if you’re thinking about pursuing entrepreneurship, we commend you. The journey to becoming an entrepreneur involves a number of thankless tasks, but if you’re up to the challenge, the rewards can be staggering.

If your concerns around entrepreneurship revolve around whether you have the right character or personality to be a successful entrepreneur, have a look at our article “Top 15 characteristics of successful entrepreneurs”. Keep in mind that every entrepreneur is different and may experience entrepreneurship differently. However, these characteristics are a good base measure to determine if entrepreneurship is for you.

If you have the right personality and traits for entrepreneurship, but lack the business skills, fear not. This is a challenge that many entrepreneurs struggle with. However, help is out there – it’s just a matter of taking things one step at a time. We suggest you do a combination of the following:

  • Do research: Whether you go through articles on the SME Toolkit (such as “The ‘doing skills’ vital for business success”), find books on running a business, or search the internet, there are many resources that can help you acquire some background knowledge on the elements of running a successful small business.

  • Get training: Various organisations run training programmes aimed at entrepreneurs at no cost or sometimes at a small fee. Have a look at our article on “Entrepreneurship courses and programmes” or do a quick Google search to find out which courses and programmes are available and relevant to you. Alternatively, you can also contact your local business chamber(s) to find out if they have any support programmes, as they often do. Lastly, we also have a section called SME Support Services where there is a list of Organisations that offer a variety of services to small business owners, including training. Take the time to go through the section to see if there are any support services that may be useful to you.

  • Seek mentorship: Find a successful business owner in your community who is prepared to spend a couple of hours with you every week helping you address some issues you may have in the business. This should be a learning relationship, so you can learn how to manage things on your own. There are a number of articles on the Toolkit that can help you decide if you need a mentor, and how to go about finding one. These include, but aren’t limited to “Do you need a mentor?”, “Getting expert help to start or run your business”, “Good business mentors are worth their weight in gold”, and “Where can I find a business mentor?”.

Entrepreneurship is no easy feat, and being an entrepreneur is a constant learning process. No one expects you to know everything from the get-go, so don’t be afraid to seek help and knowledge where you can.

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Should I start or buy a business?

Choosing whether you should start a new business or buy an existing one is a significant decision that should be backed by extensive research. There are advantages and disadvantages for both options.

Although buying an existing business comes with less risk because all the groundwork (and then some) has already been done, there is no guarantee it will keep being successful. If you aren’t knowledgeable about the business and industry or you inherit a workforce that resists change, for example, the business could still fail. Explore the articles in our “Buying a Business” section to help yourself decide if this is the right choice for you.

It goes without saying that starting a new business comes with a lot of risk; it is also more financially demanding. However, you have complete control over various aspects of your business, such as the staff you hire, the policies you enforce, the standards you set, and so on. If starting a new business seems like the right choice for you, explore our “Starting a Business” section for more articles on the topic.

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What do I need to know about opening a franchise?

When starting a business, you have two main choices: starting a new business or buying an existing one. If you decide to buy an existing business, you then have the choice to buy a separate business or buy into and open a franchise.

Franchising comes with its own advantages and disadvantages. As a franchisee, you will receive a lot of support from the franchisor to help you establish the business and make sure it aligns with the franchise’s standards. You will also be given the necessary training to ensure the success of your business. However, if you prefer a greater amount of independence and autonomy, franchising may not be the right choice for you. This is because, as a franchisee, often the only responsibilities left to you are addressing short-term insurance risks, handling issues disrupt standard business operations, hiring staff, and maintaining the franchise according to the guidelines outlined by the parent company.

Ultimately, franchising can be a great avenue for entry into entrepreneurship for young entrepreneurs or those with little experience in their chosen industry. Read our article “Franchising basics” to find out what you need to know about opening a franchise. Our “Franchises” section has a wealth of information about franchising and what to expect as the franchisee.

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How/where do I register my business?

All business (company) registrations are handled by the Companies and Intellectual Property Commission (CIPC).

There are five types of companies that need to be registered with the CIPC – non-profits, private companies, public companies, personal liability companies, and state-owned companies. With the exception of partnerships, all companies need to be registered through the CIPC, whether you want to open a private school, a church, or run a franchise.

No registration of a partnership is required because the formation procedure is flexible and informal. However, it is necessary to have a Partnership Agreement in place. To protect you and your partner and the future business – especially when it starts doing well – we suggest you consult an attorney.

You can register your business online by going to and navigating to the “Register your Business” section by scrolling down to the bottom of the page.

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Where can I find non-financial support?

Aside from getting access to finance, we know that finding non-financial support is one of the hardest challenges for entrepreneurs to overcome. If you’re finding yourself in this same boat, we’re here to help. Regardless of where you are in your entrepreneurial journey, there are many organisations and individuals ready to provide you with the support you need.

For entrepreneurs who are just starting out, we suggest you look for support from organisations that aim to help start-ups get their businesses off the ground. These organisations are often business incubators, who may also provide support to established entrepreneurs at different stages of their careers. Explore our SME Support Services section to find the right incubator for you. In this section, you can also find out about the support programmes that various businesses and government support programmes offer. For a convenient list of a number of these businesses and programmes, have a look at our article “Small business incubators and support programmes”.

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How do I go about finding and hiring the right employees?

Starting a new business can be a terrifying and challenging endeavour on its own. Add to this the process of growing the business by hiring employees, and it can become even more terrifying and challenging. However, by following a logical series of events, you can make the process much easier.

As a first-time employer, there are three main events in the hiring process:

  1. Get your ducks in a row. Before you can hire an employee, make sure you can afford one. You also need to have an idea of their duties, which will inform whether they work full-time or part-time.

  2. Start the process. Write the job description; identify where you want to advertise; prepare to interview candidates; do your due diligence; and make sure you comply with employment law.

  3. Prepare for the new hire(s). Train and on-board the successful candidate properly; make sure they have a proper workspace; give them an induction into the business; delegate tasks to them; and make sure you include a probationary period.

Our article “It’s time to hire your first employee” goes into greater detail around how to approach the hiring process above. This is specific to first-time employers. If you’re an existing employer looking for help with recruitment, explore our “Recruiting & Hiring” for useful articles. This section is also useful to first-time employers.

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What do I need to know about B-BBEE as a small business?

Broad-Based Black Economic Empowerment (B-BBEE) is a socio-economic process that directly contributes to the economic transformation of South Africa, by increasing the number of black people that manage, own and control the country’s economy, and diminishing income inequalities. Making sure your small business is compliant with the B-BBEE Codes of Good Practice is very important.

On the SME Toolkit we have a category dedicated to clarifying legal/insurance issues. Within that category, the “Compliance/Statutory” section contains articles and resources geared to helping you understand B-BBEE and remain compliant. As a starting point, we suggest you look at the article “Broad-Based Black Economic Empowerment (B-BBEE) explained” to get an idea of what B-BBEE means for you as a small business owner.

The most important question is that of your turnover. Companies with a turnover of less that R10 million per annum (Exempted Micro-Enterprises) are exempt from obtaining verification. By default, they are considered as “Level Four Contributors” with a B-BBEE recognition level of 100%, and only need submit sworn affidavits, or gross receipts of R10 million or less, and the percentage of black beneficiaries of the enterprise to obtain B-BBEE “clearance”. If your turnover is higher, the article will explain what to do next.

Depending on your answer to the above, we suggest you go through the articles “A short introduction to B-BBEE scorecards” and “B-BBEE certificates and verification agencies” which will provide you with some guidelines and further sources of information.

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What legal processes do I need to follow to start a business?

To make sure your business has a chance at success, it’s important that you comply with any and all applicable legislation. Explore the sections within our Legal/Insurance category, as well as our Tax & SARS section for in-depth articles on everything you need to know about these topics. That being said, here is a snapshot of what you need to know when starting a business.


There are five types of companies that need to be registered with the CIPC – non-profits, private companies, public companies, personal liability companies, and state-owned companies. With the exception of partnerships, all companies need to be registered through the CIPC, whether you want to open a private school or run a franchise. No registration of a partnership is required because the formation procedure is flexible and informal. However, it is necessary to have a Partnership Agreement in place. To protect you and your partner and the future business – especially when it starts doing well – we suggest you consult an attorney.

Visit the CIPC website at for more information.

VAT Registration

You only need to register for VAT if the business’s turnover exceeds, or reasonably expects to exceed R1 million in a consecutive 12-month period. However, you can choose to register for VAT if your business’s turnover exceeds R50 000 over a 12-month period.

Register as a taxpayer

Once you’ve registered your company, you also need to register said company as a taxpayer for corporate income tax purposes. Small businesses (with a turnover of under R1 million per year) can register for Turnover Tax, a simplified tax system that takes the place of VAT (if you haven’t decided to elect back into the VAT system), provisional tax, income tax, capital gains tax, secondary tax on companies (STC), and dividends tax.

Visit for more information on Turnover Tax.

PAYE, SDL and UIF Registration

If you are planning to employ people, you must register with SARS for Skills Development Levies (SDL) and PAYE, as well as with UIF.

Visit to find out how to register for PAYE, SDL, and UIF.

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