How To Start A Tuck shop In South Africa
What is tuckshop?
A shop, typically one on school premises, that sells confectionery, snacks, and soft drinks.
How To Start A Tuckshop In South Africa
A Tuckshop is a lucrative business, providing income for thousands of entrepreneurs, but there are some essential factors you need to consider before you venture into this business. You need to decide on the size of your shop; location, the various products, and services you will offer, plus what your target market is. These factors will be affected by the amount of capital you have. Thus, you should carry out a feasibility study, market research and have a good spaza shop business plan before you venture into this business.
LOCATION & PREMISES
Determining the location of your shop is important before you start. It’s important that you locate your spaza shop close to your target market. Consider the amount of road traffic and find an easily accessible location where people can stop and quickly buy what they want. There are several possible locations, including shopping centres, locations, townships, surburbs, and the CBD. Opening a spaza shop close to places that typically have potential for traffic such as near schools, factories, other businesses or within the neighbourhood is ideal.
EQUIPMENT FOR A TUCK SHOP BUSINESS
You will need furniture, shelves, refrigerators and may require a small truck for your spaza shop. The equipment you need will depend on the size of your spaza shop and the kind of products you will sell. Ensure that your business premises are safe for your employees and customers. Your spaza / tuck shop business plan should include the costs of purchasing the equipment.
TUCKSHOP PRODUCTS
There are different types of products you can sell in your spaza shop. You can provide groceries, snacks and readymade food, alcohol as well a as non-food items. It will be advantageous to have all various types of accessories and products such as detergents, hair products, cosmetics and over the counter medication to provide convenience to your customers. In addition to selling beverages you can also sell hot and cold beverages, baked goods, and other snacks in your tuck shop. Another essential factor in running a spaza shop is selecting the right suppliers.
STAFF & MANAGEMENT
As a customer-centric spaza shop, it’s important that your shop attendants are friendly and efficient. Your employees should be passionate about serving your clients. If you want to hit the ground running it’s better to hire people who have experience in this business. Inexperienced staff members need to get extensive training before they can be given intricate tasks. Running a spaza shop can be risky, and the safety of your shop attendants and employees is important so you should ensure that your staff members know how to prevent and respond to robberies.
MARKET
The demand for groceries and other spaza shop products is huge. Convenience continues to be an important factor when it comes to driving spaza shops sales. There is a lot of competition in the retail industry, so you should have a good marketing strategy. Large retail chains have begun opening other branches close to people’s homes, which has increased the level of competition within the retail industry.
Frequently Asked Questions (FAQ)
How much does it cost to start a spaza?
The Spaza Shop Support scheme allows for your business to access a R3 500 working capital injection (cash) and an additional R3 500 in revolving credit at pre-selected wholesalers.
How do I start a spaza shop in South Africa?
The spaza shops must be owner-managed, and must have a bank account. Spaza shops must be willing to buy products produced by South African small businesses as part of the bulk-buying schemes. They must be willing to submit monthly management accounts for at least 12 months.
Do you need a license to open a tuck shop in South Africa?
If you are selling or supplying meals/ food from a restaurant, a takeaway, tuck shop, spaza shop, fast food outlet, supermarket, grocery store, or wholesaler, you need to get a business license and can have it renewed every year.
What is a spaza shop in South Africa?
A spaza shop, also known as a tuck shop, is an informal convenience shop business in South Africa, usually run from home. They also serve the purpose of supplementing household incomes of the owners, selling small everyday household items.
What does a spaza shop sell in South Africa?
Spaza shops are micro-convenience stores which operate in township residential areas, selling groceries, bread, cool drinks, prepaid airtime, sweets and cigarettes.
How do tuck shops make money in South Africa?
Tuckshops (small food-selling retailers) are the most supported in rural areas. It’s easy to start a small corner store – all you have to do is purchase 3 – 6 items of each product that you want to sell as a start-up. R5000 – R10 000 can open a tuckshop, and can create up to 60% profit
Can I sell food from home South Africa in South Africa?
To legally sell any foodstuff in South Africa, except unprocessed agricultural products, you must apply for a Certificate of Acceptability from the local authority, which would typically be your municipality. This certificate must be in place before you start trading.
Do spaza shops pay tax in South Africa?
As such, spaza shops play a vital role in serving local communities as part of the informal economy. This segment does contribute to indirect taxes (Value-add Tax) through their purchasing from suppliers and direct taxes (Income Tax) on their income earned.
Where do spaza shops get stock in South Africa?
We order favorite brands in bulk from manufacturers at a lower cost. The goods are delivered to one of our warehouses around South Africa. Spaza shops owners order their stock through our driver/ sales agents.
How much does a street vendor make in South Africa?
The average street vendor gross salary in South Africa is R156,127 or an equivalent hourly rate of R75. In addition, they earn an average bonus of R18,938. Salary estimates based on salary survey data collected directly from employers and anonymous employees in South Africa.
What are the problems in spaza shop in South Africa?
The results showed that the problems experienced by immigrant spaza shop owners include crime, xenophobia, lack of sufficient finance, high competition, inability to speak the language, high cost of operation and poor location.
Why do spaza shops fail in South Africa?
Some Spaza shop owners may have insufficient bargaining power or business knowledge to effectively negotiate discounts, which puts them at a disadvantage. There is also little existing collaboration or communication between these businesses, and they rarely have opportunities to learn from or support each other.
How many Spazas are there in South Africa?
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Known as spaza shops in South Africa, they are an important, even vital, component in the townships. Numbering over 100,000 across the nation, they make critical contributions to local food security, self-employment and community cohesion.
How many spaza shops are there in Cape Town in South Africa?
In the Cape Town phase of the research 3860 micro-enterprises were identified by the SLF researchers. Grocery retailing represents 25% of all informal business activity in these sites. A total of 544 spaza shops (14% of all businesses) and 438 house shops (11% of enterprises) were found.
What is a tuck shop in a school in South Africa?
Tuck shop noun. a shop selling confectionery, especially one near a school.
What is the fastest growing business in South Africa?
Agriculture is one of the fastest growing industries in South Africa known for their vast lands and profitable farming opportunities. Agriculture, including forestry and fisheries, is vital to the country’s economy as the sector grew by over 22% and contributed 4% to the country’s GDP in the first quarter of 2017.
How do I start my own business in South Africa?
You can register your company online on the Companies and Intellectual Property Commission (CIPC) website, or on the Bizportal.gov.za website, a platform created by the CIPC that offers company registration and related services. You can also register your company via a bank, including Nedbank and First National Bank.
Do I need to register my small business in South Africa?
Do I need to register my small business in South Africa? Yes, you do. You are legally required to register any new business with your local SARS office to get an income tax reference number. Within two months of starting operations, you must complete this process by filling out an IT77 form.
How much is a permit in South Africa?
The next step is the question of: How much does a South African work permit cost? The Government application fee is R1,520 for all work visa categories.
What is a business license in South Africa?
What is a business license? A business license allows you to establish a particular business in a specified area. The license also ensures that your business and the business premises meet all of the building regulations, public safety and health requirements. Trading without a valid license is a punishable offense.
How do I get a food license in South Africa?
You will need to apply for a license from the City’s Trade License Department. In addition, you will need to pay a once-off application fee. Only when all departments have retuned favorable reports and recommend approval the trade license will be issued.
Do you need a license to sell food in South Africa?
If your business sells or supplies meals or perishable food to eat on the premises or to take away, you’ll need a license to do so. Adult entertainment premises. If you’re a hawker selling food and meals, which you take from place to place or sell from a vehicle, you’ll need a permit.