It can be risky to start a South African home based business because you never know if the product or service will be in demand, you also don’t know if you have the ability to push through on your own. It’s never easy. And the success rate will obviously be lower if you are not street wise.
Using the word street wise is a mouthful; it implies that you are naive. An online dictionary defines naive as flows:
Having or showing a lack of experience, judgment, or information; credulous: She’s so naive she believes everything she reads.
My suggestion is that you only consider a proven home based business concept. Ensure that your investment is small and that your return is high with potential to grow.
I believe that starting your South African home based business with a naive attitude is the reason for failure because you are responsible for your decisions.
As a family we were involved, in an expensive franchise in South Africa. We were franchisees for many years and saw many naive people fail in a so called low risk franchise.
This reminds me of an article that I came across stating that only 5% of franchises fail compared to 50% and more % of businesses that are not part of a franchise.
This I believe is a lot of bull;
A lot more franchises fail in the first year but they are not recorded as failures because the franchisor takes these businesses over or sell them on to other established franchisees.
I remember two franchisees that worked all their life at a large corporate. They resigned, clubbed their pension together and bonded their homes to purchase this expensive franchise.
They were nice guys but naive. Very naive.
When I met them a month after they started they were already in deep trouble. Their business was located in the wrong area, they were buying expensive and faulty stock from dealers who saw their naivety. Sad to say they lost it all.
Again: Go for a small investment with high returns and potential for growth.
Let’s compare two South African business opportunities (I’ll call one the Expensive Franchise):
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Franchise
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Coffee news
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Expensive Franchise
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Investment
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R35 000
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R1 000 000
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Potential Monthly Income
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R18 000
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R90 000
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Time before you get your money back
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Two months
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Ten months
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To make R90 000 per month
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You need 5 Coffee News franchises
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You need one expensive franchise
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To make R90 000/m you need to invest
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R175 000 (The cost of 5 Coffee News See **Note)
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R1 000 000
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* Note: These figures are based on a successful business. The income depends on the skills and ability of the owner. Although there are Coffee News owners that run 10 and more Coffee News editions we don’t recommend you start the 2nd and 3rd before you have a proven track record.
** Note: The first Coffee News edition is R35 000 (excl. VAT) The second R20 000 (excl. VAT). I have used R35 000 for the calculation. Therefore 5 Coffee News editions will only cost R115 000 and not R175 000.
You can see from the table above that:
- To make R90 000 you need to invest nearly six times more money than with Coffee News.
- You can potentially recover your start up cost in two months compared to 10 months for the expensive franchise.
What are the other pros and cons starting a South African Home Based business compared to an expensive franchise?
- The risk is obviously higher with the more expensive business opportunity.
- With Coffee News you don’t need to rob the bank and sell all the family jewels to start the business.
- With Coffee News you don’t have high volumes of stock.
- You don’t have people and staff stealing your stock. You have no stock.
- With Coffee News you don’t have to worry about staff and labour laws/regulations.
- The expensive franchise needs long trading hours.
- Coffee News is a home based business.
- I am not saying that at the end of the day you will make as much money as with the expensive franchise but you will not owe the bank your pension and your home if you are not successful.
- With Coffee News you’ll have freedom and time for family, friends and hobbies.
Coffee News is a nice home based business with relatively low risk, high return and potential for growth. And on top of that people running Coffee News enjoy the social- and the local nature of this unique South African home based business
gendall is discussing. 
gendall 9:02 am on August 20, 2009 Permalink
i think that in todays economy everybody should think about creating a 2nd income for themselves – passive income would be better – here is my idea of creating a passive income in South Africa… http://www.vbo.co.za