Accounting services for small business South Africa provide an important service, allowing proprietors to better control their financing and manage their business. Within each sector, there are many different types of small businesses, and this article is going to discuss just a few of them, particularly in the food and beverage sector and the beauty sector, as a means of demonstrating how Surebooks’ services can assist them. If you are interested in investing in accounting services, then read on.
What Constitutes A Small Business?
In general, you can separate businesses into two main categories. These include service-based businesses and retailers. While retailers are primarily focused on providing their clients with products and goods for purchase, service-based businesses are responsible for carrying out any range of services, from technical support with your cellphone contract or beauty treatments.
You can further distinguish between these businesses by determining their size and scale, which will help you to determine whether they are small, medium or large business models. In general, small businesses constitute an enterprise with about 20-50 employees. According to the National Small Business Act of 1996, a business will also be considered ‘small’ depending on its specific total gross asset value, turnover and sector-specific thresholds.
Of course, there are also hybrid business models that do a little bit of both, but for the purpose of this article, we will not discuss this. Rather, we are going to focus on the various types of businesses in the country and why they could all benefit from accounting services for small business South Africa. In this country, there are a huge number of small businesses driving the economy forward, and many of them are spaza shops that can be seen on every other corner.
Traders and vendors are common, and contribute a great deal to everyday public life, providing everything from fresh fruit and vegetables to the provision of expert services and entertainment. There is not one single kind of business in this diverse economy — rather, there are endless opportunities for consumers to engage with a massive range of service providers and retailers in a myriad of capacities and contexts.
Why Are Small Businesses So Common in South Africa?
Unfortunately, given the high unemployment rates within this country, jobs are often difficult to find or access. This is also exacerbated by the historical legacy of Apartheid, which used regulation to economically disenfranchise more than half of the country’s population, specifically people of colour. Today, things are different and anybody can make and earn money.
However, there are always difficulties entering the market as a small business owner (no matter the country or the context). Part of the difficulty includes competition from other small businesses, difficulty accessing financial resources, trouble navigating governmental regulations, policies and taxes and the complexity of administration. All of these factors will make it difficult to create a business that can thrive.
Even so, many people have taken the risk to invest in their own self-sustaining company. Many South Africans are inspired and encouraged to venture into entrepreneurship and business development, feeling that self-employment on a small scale can provide what they need to sustain themselves throughout the year.
Small businesses are immensely common in this country, and it is an important sector of the economy that creates employment and keeps food on the table. What’s more, the services and goods they provide are what keep the everyday consumers like you and me well-looked after.
What Are Accounting Services for Small Business South Africa?
Every small business is expected to comply with local tax regulations, especially if they are earning a particular amount of money annually. However, given that most small businesses have limited resources for staff and external services, many will try to take on this extra administrative burden by themselves. While some may manage to conduct this kind of work themselves, most will find this a difficult task to carry out unless they have a background or education in finance and accounting.
Keeping track of one’s spending and earnings is hard work even by itself — so to then add the feat of bookkeeping and balancing on top of that is a lot to ask of any business owner, who is likely already overworked with everyday business management and customer services.
This is precisely why many choose to invest in accounting services for small business South Africa — because it removes some of the load from the owner’s plate and frees up time for them to focus on the success of their sales or the quality of their service provision. When you invest in accounting services for small business South Africa, you can expect to have assistance with everything from tax compliance to payroll management and budgeting and forecasting.
Commonly, many will enquire about accounting services, particularly around tax season. But should you have the financing to invest in these services full-time, you may find that your return on investment is worth the initial spend. When you have assistance with budgeting and forecasting, you are able to more efficiently plan your spending, prepare your budgets, and manage your cash flow.
This means that even during quieter periods, you will have sufficient funds to maintain your profit margins and pay for your overheads. Without effective accounting services, you risk running into tax trouble, which can result in heavy penalty fees, or even running into unfavourable audits that could temporarily close your business or leave you drowning in paperwork.
With the right service provider, these things will come much easier, and you will slowly also learn how to manage your everyday bookkeeping so that you are always prepared to present well-balanced ledgers and books.
What Are Common Types of Small Businesses in South Africa?
Food and Beverage
On every corner in South Africa, you will notice a babbi or a spaza shop selling everything from ready-made samosas to toiletries and potato chips. These small businesses are exceptionally important as they provide affordable access to food and beverages, often staying open late enough to service clients even after chain franchises have closed. These small businesses are usually run by sole proprietors and make a living on the foot traffic coming in through the streets for a quick purchase.
Bakeries and Caterers are a very common type of small business that always creates a loyal customer base. These kinds of businesses open and close early, focusing on providing everything from bread to fresh croissants and more. Although they will often sell out first thing, to keep this kind of business running requires a lot of time and equipment, labour and love.
If you live in the cities of South Africa, you will know that there is a new restaurant popping up on every corner every other day. This is because food and beverage sales, especially in South Africa where the culture of eating and drinking out is especially popular. Restaurants provide a great means of entertainment and nourishment, allowing clients to sit and enjoy. But these too are spaces where it takes a lot to keep things running smoothly, from kitchen staff to cooking appliances, there are a lot of expenses and purchases both big and small.
Food and beverage retailers often have a very high flux of inventory to manage given their provision of perishable goods. Many businesses in this sector rely on accounting services for small businesses to keep track of stock levels and avoid overstocking, but also to accurately calculate the cost of goods sold, which differentiates based on markup and seasonality of goods.
Beauty and Fashion Retailers
It is no surprise that beauty and fashion retailers are as popular as they are, given their influence on culture and personal expression. No matter who you are, you will need to curate a wardrobe of clothing to wear day in and day out and you will likely rely on your local fashion retailer to provide you with options. Clothing stores have to work with suppliers, stylists, marketing and others to ensure that they are stocking items on-trend allowing you to stay in vogue. Many of these places are located within larger business complexes or malls, requiring them to pay rent monthly, which only adds to the large expenses they must deal with.
Alongside clothing and fashion, beauty markets offer us the opportunity to express ourselves through our hairstyles, nails, jewellery and personal hygiene. Most working people spend a dedicated amount of time monthly investing in manicures, pedicures, haircuts and more, as it has a major impact on how people are perceived both professionally and socially. These kinds of small businesses do not have to worry about stock so much as they need to focus on having the correct staff to provide quality services to their customers, as this is mostly a client-facing business.
Before one can sell clothing, said clothing must be produced or manufactured. If you are a small local business you may choose to invest in mass-manufactured items or if you are more eco-conscious you will employ seamstresses and tailors to produce your clothing for you. Dressmakers can produce clothing en-masse, and tailors can focus mainly on repair and mending, which are constant issues that most will have to invest in monthly if they are concerned about keeping their wardrobe in good stead for a while.
In the beauty sector especially, business owners will often provide discounts, specials and promotions that can be difficult to track financially, but beneficial as far as drawing in new customers. By investing in accounting services for small business South Africa, professionals and business owners in this sector will be able to better monitor their pricing strategies and profit margins, ensuring that their approaches are beneficial in the long run.
What’s more, for fashion retailers especially, there is often a need to sell via multiple channels, whether that be in-person stores, markets or e-commerce sites — in these cases, investing in accounting services for small business South Africa provides you with a good means of consolidating your financial transactions and getting a better view of your overall business efficiency.
Invest in Accounting Services for Small Business South Africa
These are just a handful of the common types of small businesses that exist in South Africa, but there are many more kinds of businesses that are responsible for providing their clientele with goods and services. In this country, you will find small business owners in every sector, from tourism and hospitality to electrical support and maintenance, construction and home improvement.
Each of these business types have unique models and requirements, each requiring different approaches to bookkeeping and accounting. But with accounting services for small business South Africa, you can ensure that you are not only tax-compliant, but also well-equipped to forecast, budget and prepare for quiet months. So, visit Surebooks online today to see how our trained accountants can help your small business.
