YOUR BUSINESS IS LEGAL & COMMERCIAL…WHAT NOW?

Ever since I discovered my entrepreneurship “calling” I have always been able to identify opportunities for growth and expansion wherever I went. I remember my childhood dream was to venture into multimedia because I believed there was an opportunity for our national TV channel (BTV) to provide higher-quality output and generate more income in the process, which is still my view anyway.

I was also very passionate about farming, but would rather commercialize it and run it like a formal business…where I would expect monthly revenue all year round, unlike having to wait for certain seasons (only to sell my yields on the road side).

I’ve come to learn the two types of entrepreneurs, one is the kind of people who are kicked about the concept of entrepreneurship (usually from formal education and/or mentorship) and so they go ahead and register a business even before they find their first customer or make their first thebe. But I have realised that this “commercial tendency” mentality may somehow be a hindrance to getting started; we spend too much time legally registering businesses & developing professional commercial processes rather than starting the actual business. I know I’m a victim of this ‘disorder’. I mean, I have four formally registered companies, but only two are active while the rest are not operational (documents are stored away in my dusty files at home); my business is legal & commercial, what now?

“After registering a business, your job is only 1% done, what now?”

Second entrepreneur is the kind who are so much into the concept of running a business that they do not register it formally even long after they have started making money. I have friends in Old Naledi (Gaborone’s most popular township) that are into furniture making using pallets; it started off as a hobby, but later turned into an everyday cash cow. However, they have not registered or licensed their business, they don’t have a business bank account and so have no idea how much turnover they are generating annually; but the truth is, these guys are probably getting more income than my monthly salary (I have an 8-5 job) and what my two active companies are generating combined; but is it really sustainable?

 

It’s really a big battle that I am still fighting with myself; should I pay more attention to my “street hustle” & focus more on the operations that actually bring in money? Or do I continue to invest in commercialization, professional systems and branding and work towards a calculated breakthrough that will enable the business model I have built to run itself?

I am not comfortable with either of these kinds or entrepreneurship. But if I were to choose (which I already have) I would stick to what I am doing. Registering a business is important and when you invest in your systems & processes, at some point your business shall continue running even in your absence. I don’t know of any successful business person without a formally registered entity, do you?

On the contrary, people who register the business even before validating their idea may be doing it wrong because registration, registering as a taxpayer & maintaining the processes & annual returns cost money and you do not want to do it until it is essential. I feel dented every time I have to pay my annual returns for companies that don’t even trade. Like I said, I am really fighting an unending battle…

However, I still maintain that registering your business legally & setting up commercial processes is important; here are some reasons why:

 

“How does this make you feel?”

 

• Professionalism: A registered business tells your customers that you are not a fly-by-night operator and are here for the long term. You can easily be identified as a brand, and to some extent, leverage customer to pay more than what they would to just an individual; e.g. when a car guard in Main Mall washes my car, I feel the need to negotiate a discount on the P40 charge, but when I take it to Sparkle Car Wash in Airport Junction I don’t even think of such; because I understand they have rent to pay, they are a professional entity whose brand reflects quality service (even if their wash is just ordinary); if anything, I leave a tip over and above the standards P120 charge… is this unfair to the unregistered individual car washes?

• Separating Professional Account from Private: This will allow you to pay yourself a monthly salary; it might seem pointless, but did you know that when you have a secured monthly salary you can actually access bank loans, mortgages and bonds (as an individual)? Also, in the event that your business fails, you do not have to lose any of your personal savings to repay the investors.

 

• Getting funding (investors): There are so many opportunities to get funding; in the next coming issues we will discuss CEDA loans, BDC loans, Youth YDF and others. Nonetheless, accessing funding is only possible if you have already registered the business.

 

Company registration Process

Contrary to popular belief, registering a company is not as expensive & complicated as people make it seem; although most consultants charge between P1500 to P2500, the actual cost of the whole process is P380. There is nothing wrong with people charging a bit extra for the service, it is not a rip-off; in fact, most people who are in this business started off by doing it for themselves, and later decided to do it for others at an extra cost; and it is good, because you learn more as you’re doing it for other people.

Here is a brief summary of the whole process:

• Form 1: application for reservation of Company name (by shares or guarantee) – you propose 3 choices of names and pay P20 for this stage. The application takes up to 5 working days to be processed
• Form 2 or 2B: application for registration of company limited by shares (or by guarantee for form 2B) – this stage is done after you have received your Company name; it indicates company directors and/or shareholders and shares held by each.
• Form 3: Solemn Declaration – this stage is to validate information provided and is certified by commissioner of Oats; it is submitted together with Form 2, certified copies of shareholders’ IDs and a payment of P360. Processing of the two forms will take up to 14 working days, after which you will collect your Certificate of Incorporation (form 4) and be a company owner; see? It is so simple…

 

After your business is legal & commercial, what now? The next step is to be a grindpreneur and put in some work…the truth is it will not be easy, and but setting up commercial systems will help keep your business running even in your absence.

Leaving the business registration process till the last minute makes you lose out on opportunities that come unexpectedly; therefore its important to have your company ready and have your accounts up to date.

“When you fly by the seat of your pants, things slip through the cracks. Systems and Processes matter!”

STAY GRINDING!!!