Monday, September 29, 2008

Business idea of the week: Laundry Lockers for students

Our business idea this week focuses on students living in res or apartment dwellers everywhere. We all know what a pain it is or use to be when you have no clean clothes and just to much to do to spend an afternoon at the laundromat.

Laundry Locker offers on-site convenience and 24-hour service through a fleet of lockers located in apartment buildings throughout the city.

Customers begin by creating an account on line, then they place their dirty clothes in any available locker and pocket the key. (In addition to servicing lockers in 355 apartment buildings, Laundry Locker also operates several kiosks throughout the city, and home delivery is available as well.) Laundry Locker personnel check all locations each day and send an email confirming and requesting payment for each order received. Dry cleaning is cleaned and packaged, including minor repairs at no extra charge, for prices beginning at R20.25 per shirt. Regular washing, meanwhile, is separated into white and colored loads and washed separately from that of other customers, then neatly folded for pick-up. Wash-and-fold pricing begins at R10.35 per pound, and users can specify on line exactly how they want their laundry done. Clean garments are then returned to the same locker by 5 p.m. the following day, Monday through Saturday, with notification to the customer via SMS and email. Users simply unlock the locker they originally used and take out their clean clothes—packaged in a personal laundry bag Laundry Locker provides—leaving the locker available for the next customer.

The great thing about this idea is that once it is set up, your overhead costs are really low and you really only have to focus on marketing

So if you have a bit of capital, and want to start something that will grow quickly and is easily franchisable then who not be the first in South Africa to launch this unique idea?

Upside: Minimum start-up cost once the laundry is set up and you have provided your potential clients with secure lockers.

Downside: Its fairly easy to start-up and once you make a success out of it you can be assured that competitors will follow. Secure locker facilities is key to this idea especially considering the crime in SA.

Verdict: A great idea for entrepreneurs with a bit
of cash and the drive to make it work. Initial set-up costs may be relatively
low but a solid marketing plan and budget to support it is a must. My
research has shown nothing similar in South Africa yet, so the early
bird is likely to grab market share.

If you need support with your business or business plans please contact us business
plan consultants


Friday, September 26, 2008

Weekly Humor: Golden Oldies

There are few things more entertaining then hearing jokes and having giggles with our gran parents. These were not collected from such an occasion but may as well be. Thank you to Laura Bening for sending these on to me on a regular basis.

Three sisters ages 92, 94 and 96 live in a house together.
One night the 96 year old draws a bath. She puts her foot
in and pauses. She yells to the other sisters, "Was I
getting in or out of the bath?"

The 94 year old yells back, "I don't know. I'll come up and
see." She starts up the stairs and pauses. "Was I going up
the stairs or down?"

The 92 year old is sitting at the kitchen table listening
to her sisters. She shakes her head and says, "I sure hope
I never get that forgetful," as she knocked on her wooden
table for good measure. She then yells, "I'll come up and
help both of you as soon as I see who's at the door."

Three retirees, each with a hearing loss, were playing golf
one fine March day. One remarked to the other, "Windy,
isn't it?" "No," the second man replied, "It's Thursday."
And the third man chimed in, "So am I. Let's have a beer."

A little old lady was running up and down the halls in a
nursing home. As she walked, she would flip up the hem of
her nightgown and say, "Supersex."

She walked up to an elderly man in a wheelchair. Flipping
her gown at him, she said, "Supersex." He sat silently for
a moment or two and finally answered, "I'll take the

Two elderly ladies had been friends for many decades. Over
the years, they had shared all kinds of activities and
adventures. Lately, their activities had been limited
playing cards a few times each week. One day, they were
playing cards when one looked at the other and said, "Now
don't get mad at me. I know we've been friends for a long
time, but I just can't think of your name! I've thought and
thought, but I can't remember it. Please tell me what your
name is." Her friend glared at her. For at least three
minutes she just stared and glared at her. Finally she
said, "How soon do you need to know?"

As a senior citizen was driving down the freeway, his car
phone rang. Answering, he heard his wife's voice urgently
warning him, "Herman, I just heard on the news that there's
a car going the wrong way on Interstate 77. Please be

"What!!!!!!!!" exclaimed Herman, "It's not just one car.
It's hundreds of them!"

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Tuesday, September 23, 2008

Turmoil on the Financial markets and SMEs

My colleague over at SA Business plans and UK Business planning, Lourie Nel recently started his own Blog focusing on financing issues for small businesses.

Have a look at this interesting post on the effect of the recent turmoil on the financial markets on small business and entrepreneurs, specifically when raising start-up funding.

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Sunday, September 21, 2008

More Venture Capital Funding Available for South African Start-ups

Great news for South African business start-ups came recently with the American venture capital firm DFJ further strengthening their focus on investing heavily into new businesses in South Africa. This will come as a further boost to South African firms who has recently seen a dramatic increase in business start-up funding being made available to entrepreneurs in this country. As company looking for funding, this once again emphasises the importance of a well written business plan.

Over the past half-century, venture capitalists and start-ups in Silicon Valley have revolutionized much of the U.S. economy by launching new technologies in the electronics, computer, software and Internet industries.

A big hitter in the global venture capital arena, DFJ has in recent years cashed in on two well-known start-ups: Skype, the well known Internet phone firm bought by eBay for $2.5 billion in 2005, and, China's largest search engine company, which went public on Nasdaq three years ago and enjoys $9 billion in stock market value.

The firm has so far invested in more than 90 start-ups in 2007, according to Thomson Reuters and Dow Jones Venture One. They believe that the economies and markets for IPOs and acquisitions in countries like South Africa are expected to grow at a faster pace than in the USA and are hence keen to be part of that predicted growth.

The DFJ Athena fund has invested $100 million in international start-ups, ranging from technology to service based industries and are optimistic that they will attract a high level of potentially profitable business plans in South Africa.

Good quality, well-researched, business plans are key to Venture capital firms with entrepreneurs needing to present the right picture from the outset. Due to the shear volume of South African business plans being presented to firms such as these, as the entrepreneur you often get only one chance to make a good impression. Make sure you present your business plan, feasibility study and business plan presentation in such a way that it will make a lasting impression.

Tuesday, September 16, 2008

Increasing demand for business funding in South Africa

The recent trend regarding the strong demand for business funding in South Africa showed few signs of losing pace according to a recent research study conducted by the Industrial Development Corporation (IDC). The IDC who is the government body responsible for amongst other issues for injecting venture capital into viable new businesses ideas in South Africa.

The good news is that with the demand for business funding increasing, research suggest that the availability of business funding is following suit.

Christo Fourie, head of venture capital special business unit (SBU) at the Industrial Development Corporation (IDC), said prior to the formation of the SBU in April last year, the IDC conducted research to determine likely activity levels.

“The unit was formed to fill a funding gap and its mandate is to provide funding to businesses in their seed and start-up phases of development. We will fund the development of new and innovative technologies in any industry and not just the typical areas such as information and communications technology,” Fourie said.

However, since the IDC became active in the venture capital arena several new entrants have come into the field.

“There is a lot more interest in investing in new companies. However, there is still room for more players and we welcome additional competition because there is only so much that one team can do,” Fourie said.

It seems that venture capital firms are keen to invest in the right ideas. Business owners often make the mistake of thinking that funding is difficult to come by, when in actual fact there is plenty of funding to go round, provided that you have a viable business idea, clearly outlined in a succinct business plan.

In a recent visit to a business funding and venture capital conference in London I was astonished at the levels of funding actually available. In conversations with a range of venture funders it became clear that venture capital firms need to invest money in new ideas for their business models to work. These companies are often frustrated by the number of investable business plans they receive, especially at higher levels of funding required.

Acquiring funding for your business does not have to be the large obstacle entrepreneurs make it out to be and help is now at hand with aquiring the right venture capital firm for you through SA Business Plans venture capital research service. The real challenges lies in the next phase of your business when putting the strategies laid out in your business plan into place and being flexible and innovative enough to turn the idea into profit and to grow the business to fulfill your vision.

Remember that it may often be worth it to ask for guidance or support, and may find that obstacles are there to be overcome especially with the right support.

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Thursday, September 04, 2008

Success Factors for South African Small Business

Entrepreneurs around the world share one common and crucial question, what will make my business successful? What do I need to do or how do I need to be of for this business to succeed? Is the business idea that will set me aside from the competition, it my leadership or management skills, or perhaps that of the team involved? Perhaps it may be the extent to which the company did market research and feasibility studies to understand the market and competition, the effectiveness of the companies’ business plan, business plans or business growth strategies, or is the ability to raise start-up capital?

Despite the wide range of books and speakers who claim to have answers to all these questions, the most reliable answers are guaranteed to come from entrepreneurs and business owners themselves. A recent research study conducted by Research Markets, looked at what more than 2000 South African SMEs had to say about the issue.

There is no clear set of rules for success and the specifics of what will work and what will not changes from business to business. However, SMEs can 'throw the dice' in their favour:
The Survey has revealed that there is a statistically significant correlation between resources used and the likelihood of being highly competitive. The implication is that business decision-makers stand to make their companies more capable of competing by taking advantage of the same resources.

Only 42% of SMEs in South Africa regard themselves as highly competitive. Therefore any resource that is associated with significantly more than 42% of respondents being highly competitive (more than 2% is statistically significant in this sample size) can be seen as having a strong correlation with being highly competitive.

The key findings of SME Survey 2007 reveal a range of resources that give small businesses a competitive advantage. Ranked among these are the smart application of available tools such as those from the technology and financial services sectors - but business owners still have to add a certain X-factor for business success.

Simply the use of computers in the business is immediately related to heightened competitiveness, since there is a direct relationship between the number of computers used and the level of high competitiveness among SMEs. Of those using more than ten machines in their environment, more than 46% are competitive; with more than 50 machines, the level of being highly competitiveness increases to 54%.
Affordable, high speed connectivity is next. 45% of ADSL users are highly competitive; of users of Mac and Linux software (which indicates a more mature technology consumer) 48% are competitive, while the use of any IT support services (end-user training, hardware and software sales support, Web development and strategic consulting) and Internet services (e-mail excluded) has a high correlation with competitiveness.

Danny de Beer, business development director at Fujitsu Siemens Computers, believes most SME owners are eager to find technologies and services to improve their efficiency but don't get around to it. "Many SME owners spend too much time on relatively arbitrary functions instead of paying a specialist to handle it for them. However, the problem is twofold: one is that the business owner may not trust the available service providers or know how to find them, and the other is one of cash flow," he says.

While de Beer says he can understand the business owner getting bogged down in peripheral tasks, he says SME Survey has shown the value of taking the time to establish supplier relationships to free up one's time to focus on strategic or revenue generating activity.

The use of professional business consulting services and financial instruments delivers further advantage, notably the engagement of a mentor. While only 10% of SMEs consult a mentor, 50% of these regard themselves as highly competitive.

Melt van der Spuy, director of business banking at Standard Bank, says those using professional and mentoring services are likely to have a more strategic, rather than operational focus. "These services are strategic by nature. The business owner who has recognised the need for specialised strategic support has moved beyond an operational focus. He is working on the business, as opposed to working in the business."

Van der Spuy adds that despite the findings of SME Survey, any successful entrepreneur is one who will see opportunity where there are challenges. This is the X-factor which he believes is essential for sustained success.

What keeps you up at night?
Small business owners are generally not kept awake at night by concerns about business strategy and rather focus their deepest concerns on operational matters. This has emerged from the results of SME Survey 2007, which has indicated that the most worrying issue for the small business owner, after crime, is cash flow-related. As a result, most business owners look to their accountant or bank for business expertise - but the few who make use of specialist mentors tend to feel more confident and more competitive than those who do not.

According to Arthur Goldstuck, SME Survey principal researcher, it is primarily crime that keeps the SME business owner tossing and turning at night. "That 27% cited crime as the most worrying factor came as something of a surprise," he says. Less surprising, however, was cash flow at 19% and the related issue of debtors next at 13%. "This was out of a 'laundry list' of woes that included options such as traffic and the threat of competition," Goldstuck says.

He says that with competition ranked fourth in the list - only 12% of respondents were deeply worried about what their rivals were up to - he believes most SMEs are not benchmarking themselves against others. "When competition keeps you awake, you're concerned about market share. This doesn't seem to be a bother for South African entrepreneurs, and is more a factor of the corporate environment."
Melt Van der Spuy, director of business banking at Standard Bank, says this finding demonstrates that the average SME owner is concerned about money and margin, return on equity and the future. "Most salaried people don't have these concerns as they have predictability of income and assurance of pension funds or other such structures," he says. "These are questions of operational efficiency; while essential, this focus must be balanced with due attention to strategic development of the business."

Van der Spuy believes the tendency to obsess around operational issues may be a limiting factor for the growth of the business and even a possible contributor to the high rate of failure for new businesses.
"This is both the scourge and the beauty of the smaller business. If you don't worry about cash flow, who will? It is a function of that which is most pressing to the business, but this has to be balanced with strategic insight and direction," he states.

In terms of the ports of call for the SME owner looking for business advice and business planning advice, Goldstuck says the accountant is turned to by 72% of respondents, with the bank second at 59% followed by legal advisors at 53% with just 33% of SMEs relying on business consultants. "What is of particular interest," he says, "Is that those companies which make use of mentoring or coaching are in the minority (9%), yet this is the biggest differentiator in this category in terms of high levels of competitiveness. 50% of those using these services regard themselves as highly competitive versus 41% of the rest, so it appears that such services are highly advantageous."

Van der Spuy believes the accountant is a good choice for independent business advice. "Even the banker is not independent and almost every business owner will not have a relationship of full disclosure with the bank. The accountant is likely to have the clearest picture of the business, certainly from a financial point of view," he says.

In terms of mentoring, Van der Spuy is a firm believer in the value of such services. "A mentor is analogous to a non-executive director who can provide independent advice and guidance. However, mentoring is not well understood or trusted, it is expensive and finding the right coach can be a challenge," he adds.

Finally, a surprise finding which Goldstuck says is very encouraging is the significant growth in satisfaction with government support. "This metric was first tested in 2004, with just 12% of respondents indicating satisfaction. This has grown to 34%, a dramatic turnaround which shows that while there is yet work to be done, government is moving in the right direction to support the emergence of entrepreneurial businesses."

SME Survey 2007 is sponsored by Standard Bank and Fujitsu Siemens Computers. It is in its fifth year and tracks trends and opinions of over 2000 South African SMEs.
Key Topics Covered:
- Introduction
- Executive Summary
- The blueprint for a successful SME
- What keeps SME decision-makers awake at night?
- Methodology
- SME Survey Research Methodology
- Sample frame
- Geographic representation and other filters
- Definition of an SME
- Sector representation
- The findings
- Demographic data
For more information visit
SOURCE: Research and Markets

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