South Africa is a major economic superpower particularly in the African region. This has been boosted by factors such as availability of minerals, sufficient market, good infrastructural layout, good governance and also the goodwill by the government to provide a good ground for both macro-businesses and micro-businesses to thrive. With these factors among others, South Africa is set to be a favourable country for small business investments. It is in this light that there is a need to highlight the importance and essence of business finance in South Africa. This is because capital is a major ingredient in starting a business.
How to start a small business in South Africa will then be dependent on many parameters. First it would be prudent for the small investor to ensure that s/he carefully studies into the dynamics of venture by looking at the availability of capital, profit estimates, the projected profit margin, the market trend and the licensing of the business venture. The factors are key for any success of that business. For instance, it will be suicidal if one decides to start a small business without adequate capital to get products, pay for licenses and daily operations. Such a business may take long to pick up or never pick up owing to those constraints. It is also mandatory for one to study the the market trend and way on the ability to sell his/her products and services because it will be a failed mission in case the trader starts a business which is either overcrowded or sells merchandise which attracts little or no sales. Entering a well-researched business may ensure that such a trader is cushioned from untimely losses and also offer the much-needed motivation for a starting business.
There are various ways to seek funding for small businesses in South Africa. The South African government is aware of the importance of nurturing and boosting entrepreneurship in South Africa and small businesses among the youth and women so as to alleviate poverty, unemployment and crime rates. It is due to this that the government has established The Small Enterprise Development Agency(SEDA) to promote and support micro businesses by offering financial aid and loans and advice. Another way of funding these businesses is through banks and micro borrowing institutions. Many banks are willing to offer small loans to small businesspeople so as to help them start businesses of this nature. Some of these banks include Standard Bank, Nedbank and other financial partners such as Old Mutual.
There are also many investors who offer small business grants in South Africa. Such investors should be sought after to provide such grants. The trader can also get funding from small microfinance cooperatives where members pull resources together and assist each member start a business. This is becoming a much-sought source of funding business because of its ease in repaying. Loans and debt borrowing can also be harnessed from family and friends, and the later repaid after the business is established. Therefore, with all these sources of financing small businesses, people should seek to start small business enterprises throughout South Africa for personal development and advancement.