South Africa is a difficult place to start a business. International companies face many obstacles in the South African market – from taxes to business processes. It can be challenging to get the ball rolling in South Africa. However, it’s also a beautiful country with plenty of international business opportunities.
What are the common challenges facing international businesses in South Africa?
It takes a long time to start a business in South Africa, and the delays alone can dissuade some business owners from continuing with the process. It’s also extremely expensive and can cost a large chunk of income per capita.
Then you have to deal with construction permits that take 13 procedures and 127 days to complete. Compared to other parts of the continent, this process is actually quite seamless and quick. You may struggle to complete some steps of the permit process without a local to help you. You also need electricity for your business, which takes another 226 days to receive. It takes 23 days and six procedures to register your property if you’re lucky. There are delays with the local authority and Deeds Registry in most cases. After almost a year, you can consider starting work on your business.
How can you overcome challenges in South Africa?
The poor public infrastructure in South Africa can cause numerous hurdles. You can buy power generators and pave roads to improve the infrastructure around your company. You can reduce operating costs and find infrastructure solutions. Innovation is the key to making your business succeed in the South African market. For example, a food and beverage company, Promasidor, developed a milk powder from vegetable fat for longer shelf life. They don’t need to rely on a cold supply chain like regular liquid milk.
Develop multitiered models
Many consumers still buy from small local stores in South Africa. Modern-day supermarkets only make up a small portion of the retail industry. Many companies in South Africa build connections with local distributors to sell their products. You can accelerate growth and establish a strong customer base in the local area. You could collaborate with local outlets to improve your product and distribution strategy.
Do your research
South Africa is very different from the UK. You can’t apply your market research from the UK in South Africa. You need to gather your own information on the local area’s consumer landscape. Look into consumer behaviour and find out how you can sell your product successfully. Do not rely on the research of public research firms. It’s often unreliable, and it could damage your strategy.
Expand your business to South Africa and enter a new market.