Business venture

[NTLTL]

Hi all. New to the forum and just getting into the swing of things. Looking for a bit of advise. I have the opportunity to sell a great product but dont know if I should reg a cc yet? Am i jumping the gun? If I sell to retailers they going to want a VAT number. I have saved up for a while to get this started and i want to do it right. PLz help...

[BusFact]

In my opinion, the main reason to register a cc is to protect your own private assets in case your business fails, which despite your enthusiasm at the start, is still a highly likely outcome. It does become a trade off with costs and depends on how much you plan to sell. For small amounts, the cost and hassle of running a cc will not justify setting it up.

You can't get a VAT number just because you have a cc ( a sole proprietor can get a VAT number too anyway). Rather you have to prove to SARS that your sales are going to be a couple of R100k in a year. Nowdays I believe they want proof, not promises. So you either need to start off not being registered until the orders start flooding in and then apply for a number and start charging VAT, or you need signed contracts from your customers.

If you do get a VAT number then rather setup a cc as it can complicate your private finances if you don't.

[Perform Computers]

I would go first for the CC. Depending on your turnover, VAT is optional.

[NTLTL]

I would go first for the CC. Depending on your turnover, VAT is optional.

What do you mean by VAT is optional?

[BusFact]

It is optional to register your cc for VAT up to a certain annual turnover. Once you exceed that amount however, you have to register. It used to be R300k. I think its since change though.

[Dave A]

It is optional to register your cc for VAT up to a certain annual turnover. Once you exceed that amount however, you have to register. It used to be R300k. I think its since change though.

Registering for VAT is optional up to an annual turnover of R1 million at the moment. Once your annual turnover is over R1 million per annum, you must register for VAT.

[Charlie D]

What effect do small businesses have on the public and larger corporations around South Africa?

[Dave A]

What effect do small businesses have on the public and larger corporations around South Africa?

Would you mind expanding on your line of thought in asking?

Small business makes up a significant chunk of the economy, so from that point of view there is a clear importance/effect. But when it comes to influence, as in influencing public or corporate perception... I reckon typically not so much.

[Blurock]

Business Venture

Hi all. New to the forum and just getting into the swing of things. Looking for a bit of advise. I have the opportunity to sell a great product but dont know if I should reg a cc yet? Am i jumping the gun? If I sell to retailers they going to want a VAT number. I have saved up for a while to get this started and i want to do it right. PLz help...

Hi NTLTL, In my opinion, good advise from Dave A and TFSA. It appears as if you will be working alone? You only need to register for VAT once turnover reaches R1mil. As a sole proprietor you do not need to register a cc. As a new venture this may add to your expenses for separate bank accounts, accounting etc. Just make sure you keep proper records for your own peace of mind. Once you are sure that the venture will be successful, you can formalise the business if that will bring any added benefit.

[NTLTL]

If I gather correctly. I dont need to have a name for my company yet, or trade under something to trade? Would that not seem unprofessional? What happens to purchasing expenses and marketing in regards to tax rebates? Do I simply just save up receipts for all that as you normally would if you hade a cc? I got too many questions to ask as I am inexperienced, but eagar to learn. Thanks for all your responses. Didnt think I would get many.

[Dave A]

If I gather correctly. I dont need to have a name for my company yet, or trade under something to trade?

You know what? I seem to recall something on the issue of trading names in the looming Consumer Protection Act. Something about having to register a defensive name at CIPRO or something along those lines...

[Blurock]

Business Venture

It is important to have an identity for your business. Whether you are cutting trees or selling computers, people want to know who they are dealing with. It is also important to establish a name or brand for your product. Consider a trade name e.g Joe Bloggs T/a Computer Seller and keep a proper set of books. You are building up a history for your future listed company, remember? - or even if your aspirations are not that high, you still need to satisfy all the relevant authorities, suppliers and customers that you are legitimate. You also need financials if you ever intend raising finance or equity.
How are you going to distribute this product? Will you be creating new jobs? Can you do this all on your own?
Consider distribution agreements with existing players in the market and learn from them. How did they get to where they are now?

[NTLTL]

Consider distribution agreements with existing players in the market and learn from them.

The supplier im dealing with...should i get a signed agreement that im one of his agents in a certain region and should he have forms for that?

Dave A you were right i have to go to the cipro website. SARS told me this morning.

[Dave A]

Starting out as a sole proprietor just got a little more complicated

This government of ours just doesn't have a clue how to stimulate small business development, do they?

[NTLTL]

The supplier im dealing with...should i get a signed agreement that im one of his agents in a certain region and should he have forms for that?

Dave A what r your thoughts on this, if you have any?