Small Business Set-Up

When it comes to location and choosing the best set up for your small business, it is better to keep it simple and keep your overheads as low as possible. This is particularly true when you are just starting out or are experimenting (e.g. when you are considering expanding into a new location and want to gauge market demand). Depending on the nature of your business, you can explore different options – for instance, having a mobile kitchen instead of a restaurant, or setting up a small kiosk instead of renting a store in a mall.

What about small business incubators? These are supposedly tailored to meet the needs of small business owners, giving them the opportunity to lease office space at affordable rates and providing shared support services such as meeting rooms, equipment and business administration. Efforts are also made to bring together different types of businesses into the incubator to create business and networking opportunities.

In South Africa, various private companies have their own small business hubs or incubators as part of their corporate social investment activities or to transform their supply chains. In April 2011, the government-owned Small Enterprise Development Agency (SEDA) announced plans to establish 1000 small business incubators around the country to stimulate job creation.

Incubators are an option for small businesses if they meet the following criteria: central location which offers easy access to customers and suppliers; well-proportioned office or manufacturing space which meets the needs of the small business, including very small enterprises with one or two employees; proximity to major transport routes and public transport; security; and proximity to amenities such as eating spots.

These are the basic requirements for a small business to function, and anything else (e.g. funky décor, facilities to help employees relax and think creatively) is arguably superfluous and does not enhance the business’ productivity. Small business owners should therefore be on guard and not allow themselves to be distracted by bells and whistles when selecting an incubator.

If there are no incubators nearby or if existing incubators do not meet the business’ needs, home-based offices are a viable alternative for small businesses. Working from home is also attractive if a lot of your business is conducted online, or if the scale of your manufacturing or production activities can be accommodated on your residential premises. Zoning regulations must be observed and the necessary permits obtained from the local municipality to allow you to do business from your home.