SA business growth choked by rules and red tape

Singapore Chinese Chamber of Commerce & Indust...

OVERREGULATION and red tape are the biggest constraints to business expansion in SA, according to a survey by accounting, audit and advisory firm Grant Thornton.

The survey was based on the views of CEOs, chairmen and business owners in the fourth quarter of last year.Red tape was now as pervasive a problem in SA as in other Brics Brazil, Russia, India, China and SA countries, Grant Thornton Durban managing partner Deepak Nagar said yesterday.

The survey found 37% of privately held business owners in SA cited red tape as their chief constraint, followed by a lack of a skilled workforce, at 36%.

Durban Chamber of Commerce and Industry CEO Andrew Layman said the results were “spot on” and SA’s regulatory environment, for small businesses in particular, needed to be reviewed.

The increasing complexity of regulations such as additional tax or governance requirements, labour issues, black economic empowerment, the time taken to register companies or change directors’ names was stunting the growth of business, Mr Layman said.

The second-biggest constraint to business globally was reduced demand for products — the effect of economic problems in the US and Europe. In SA, the second-biggest constraint to business was a shortage of skilled staff, said Mr Nagar.

Keith Brebnor, CE of the Johannesburg Chamber of Commerce and Industry, said it had become “very intimidating” for young people to start a small business in SA because of the onerous regulatory environment. Dealing with crime and a lack of skills also added significantly to the cost of doing business in SA, he said.

via BusinessDay – SA business growth ‘choked by rules and red tape’

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School-leavers would gain more employment if SA labour law was amended

Labour law concerns the inequality of bargaini...

Businesses have long been calling for amendments to the labour legislation to assist in the recruitment and dismissal of workers. According to Johan Botes, Director in Employment at Cliffe Dekker Hofmeyr business law firm, a critical re-think of South African employment law might  assist in motivating especially small businesses to reconsider their reluctance in employing inexperienced job applicants.“Presently, employees who are incapable of performing can only be dismissed from employment after the employer had determined that 1 the employee failed to meet the required work standard, 2 the employee was aware of the standard, 3 the employee was afforded sufficient opportunity to meet the standard and 4 dismissal is the appropriate sanction. This process is not always clearly understood by employers frustrated by an employee that is clearly not able to do the work,” Botes explains.According to a labour survey conducted by the Institute of Race Relations, fifty-one percent of South Africans between 15 and 24 are unemployed.The legislature brought some relief to employers in 2002 when introducing a lower threshold against which employers are tested should they dismiss a probationary employee for poor performance Schedule 8, Item 8 to the Labour Relations Act 66 of 1995.Botes notes that if the intention is truly to get businesses to act as institutions of learning, where on-the-job training is provided to workers fresh from school, university or colleges, a relaxation of the strict rules against dismissal for poor performance for first-time job seekers may be the way to go.“Employers are often reluctant to grow their business where such growth requires the hiring of new staff. One of the reasons for this is that it is difficult for the average employer to dismiss staff who is thought to be capable of doing the work required, but could then not come to grips with the work once employed.“If employers are able to readily terminate the service of new recruits who lack the necessary experience, they may be more inclined to give such youngsters a chance in the first place.Botes thinks that employers and needy job seekers may both be pleasantly surprised by the results.“If an employer knows that it can terminate the services of a new job-seeker at will or whilst being tested against for reasons that are automatically unfair only, the employer may decide to provide employment to a larger group of staff than those actually required, knowing that it can retain the best of them after a short trial period.“While the rest of the workers who were not the best at the tasks may then fail to remain employed with the same employer, they would have gained invaluable experience which may assist them greatly in obtaining further employment. The difficulty in getting that into the employment market presents a huge obstacle to our goals of meaningfully reducing unemployment.”He adds, “The current high hurdles laying in the path of employers before being able to dismiss employees for incapacity due to poor performance has not incentivised employers to become institutions of on-the-job training. A different approach is needed if business is expected to actively assist in addressing our skills shortage.”

via School-leavers would gain more employment if SA labour law was amended –  | Political Analysis South Africa.

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Sole Proprietor

found photo: business leaders

“A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s. This means that the owner has no less liability than if they were acting as an individual instead of as a business” (Wikipedia).

See more on sole proprietor’s here: SoleProprietor.co.za

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cc vs pty tax

CC and Pty tax is the same = 28% currently in South Africa.

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Close corporation tax rate

In South Africa, it’s now 28%, but you can pay less than that if you allocate more income to members at a lower rate, thus reducing profit. See Fixed Accounting for more.

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How many trading names can a CC use?

As long as the trading name is registered www.tradename.co.za you can use more than one trade name for a CC or Pty. Best though to keep separate bank accounts and sets of books to monitor performance – this would also lead to one www.unyaka.co.za per unit/tradename.

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The secret of success

At 39, Malcolm Hall is at the helm of Open Box, recently voted by Fast Growth 100 as the fourth-fastest growing company in SA. A finalist for Entrepreneur of the Year in SA last year, Malcolm is also a Springbok sailor.

Leadership for me is about creating an environment where people can be really successful at whatever it is they are doing – and love it. It’s then very easy to lead people when they are excelling at what they are doing.

A big part of being a leader is humility. It’s always been important to me to not delegate the job that nobody wants.

via The secret of success – Daily News | Opinion

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Brand thinking and entrepreneurship

Nando's take-away in Canal Walk Shopping Mall,...

Recently I had the honour of speaking at Cape Town Entrepreneurship Week, a four-day event that was held at the Cape Town City Hall. As per my usual style of presentation, it was made up of images that I spoke to, rather than words on slides. So since distributing my presentation won’t help, I wrote this summary to share what I spoke about.

My speech was based on how challenger-brand thinking can be used as a framework for entrepreneurship and some other thoughts. Challenger-brand thinking is based on Eating the Big Fish, a book by London-based business strategist Adam Morgan.

The book establishes eight credos or behaviours that are consistent across ‘challenger brands’ such as Nike, Apple, Pepsi and even Nando’s. I have adapted some of the credos to creating a more meaningful dialogue on entrepreneurship.

Behaviour 1…

via How challenger-brand thinking can be used for entrepreneurship

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How to cover your small business

Glass: damage to shop fronts and sign writing at your premises could be costly to repair. Accidental damage to the glass would be covered;

Fidelity guarantee: this is where the business insures itself against losses as a result of employee fraud;

Accounts receivable: a business can insure possible losses if, for example, the business is destroyed in a fire, no records of accounts have remained and the business is unable to establish the amount due to them;

Goods in transit: many businesses transport and deliver goods produced or sold. Make sure that you are covered in the eventuality of accidents or hijackings that could damage or destroy the goods being transported.

via How to cover your small business – Business LIVE

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SA to host 2012 business congress

Image from the Central Business district of Jo...

Small business in South Africa will get a boost next year when the country hosts one of the biggest international business congresses in Johannesburg.

Representatives from the US, Europe and the rest of the world will gather at the Sandton Convention Centre between 15 and 18 September 2012 for what will be Africa‘s first International Small Business Congress (ISBC).

The congress, which is hosted in partnership with The City of Johannesburg, Foundation for African Business and Consumer Services, Khula Enterprises and Finance and the Small Enterprise Development Agency, will showcase activities surrounding small business development in South Africa and around the world.

According to 2012 congress director Septi Bukula, the focus of the conference is to expose small and medium enterprises (SMEs) to business opportunities in South Africa and in different parts of the world.

via SA to host 2012 business congress – MediaClubSouthAfrica.com

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