When seeking small business solutions to South Africa’s high unemployment problem it is important to consider the underlying poverty and poor education system when we apply our minds looking for solutions. This means we have to rethink conventional equations that have led to small business success in other, more developed countries.
Today we look starting a small business offering a combination of related services instead of the conventional logic of specialising in one particular service.
If you have little to no capital to start out with, you have little options as to what business you can start. Or rather little options as to what sustainable business you can start. Some businesses will take longer to get off the ground than others while others will require you to sell a lot of something to make it sustainable.
What happens is when you are starting out with little capital and you are entering industries with existing incumbents it’s difficult to get traction. People often say focus on one thing and do it well and that is true in some instances such as when dealing with specialised skills or when you have the luxury of a long runway to profitability.
Today we are looking at the opposite of that, the “combination of related services” business model. Some single service businesses take a while to take off to the point where it is self-sustainable, more so when you don’t have money to spend on marketing or on a sales person. And even if you manage to get one client a day, the profit may not be enough to live on.
Let’s say your goal is to make between R10 000 and R15 000 a month right off the bat, maybe you just lost your job and have a family to feed, and let’s say R10k is your break even point for rent, food, petrol etc. and you cannot afford to earn less even though it takes a while for a small business to get off the ground. Despite hustling like mad in your single service business you are only able to bring in one client a day which yields a profit of R250, which if you are working 20 days is only R5000 (half of what you need to bring in).
There is a way around this, to start a sustainable business with little, and that is to start a business doing a combination of related things. What do I mean by this? If you doing headlight restoration or dent removal, starting out, you might not make enough to live on, but if you doing headlight restoration AND dent removal your chances of having a sustainable business has increased by double add one or two more small services and your chances of having a sustainable business increases exponentially.
Now there are various strategies to grow a single service business beyond that one client a day but with the constraints of being a one man business, without specialised skills, with little to no capital it is very challenging. By offering a combination of related services (let’s say 3 services) you can make your target by getting one client for each service a day – even better you don’t even need three different clients you can sell two different services to the same client.
Practical examples of a combination of related services businesses
I am including a broader range of related products and services here, and in some cases further elaboration may be required to get my point across as some may also not be perfectly supplemental but as usual you can use your own initiative to figure it out.
• Polish Tyres In Parking Lots, Restore the Sun Damaged Headlights of Cars and Start a Dent Removal Business
• Make and Sell Stumbelblocs, Make & Sell Paving Bricks and Buy & Sell Decorative Stone
• Buy and Sell Firewood and Make and Sell Briquettes
• Buy and Sell Blank Magnetic Sheet and Car Magnets, Make and Sell Magnetic Photo Frames, Make and Sell Domed Fridge Magnets, Make and Sell Magnetic Business Card DIY Kits, Make and Sell Magnetic Photo Frames, Make and Sell Blank Fridge Magnets, Make and Sell Magnetic Business Cards (all of these use the same primary raw material – magnetic sheet).
• Temporary Fence Hire, Stage Rental and Tent & Marquee Hire
• Make and Sell Customised Tomy Takkies, Make and Sell Custom Trucker Caps
• Make and Sell Framed “Meaning of name” Certificates, Make and Sell Personalised Transparent Greeting or Thank You Cards, Print and Sell Personalised Mugs
• Make and Sell Tarpaulins and Buy & Sell Shade Cloth
• Take Aerial Videos at Events, Take Aerial Photos of Houses for Estate Agents
• Design and Print Business Cards, Print and Sell Transparent, Translucent and Frosted Business Cards, Make and Sell Custom CD Clocks (same equipment – printer)
See if you can find more by combining two or more (but not more than four) services from our contents page.
- For the sake of clarification, I define things as both products (retail) and services.