When it comes to setting up business in South Africa, choosing a business venture that has a high turnover and can assure you of making a profit must be considered. Therefore, if you’re in search of a high turnover business, then this article is going to educate you on how to start a tavern business in South Africa.
So, we strongly recommend you to keep reading because a piece of more detailed information about how to start a tavern business in South Africa is discussed below in this article.
The tavern business is by far the most lucrative in South Africa, and we guess it’s not a bad choice of business venture you embark on investing into.
The consumption of liquor at the tavern has become a habit of many, and also, the tavern serves as a place for meeting friends and talking business or any other issues.
But how do you create such a welcoming place for liquor consumers and make a profit out of it?
Let’s proceed to the requirements, the DOs, and the DON’Ts of establishing yourself in the tavern business in South Africa.
Table of Contents
What You Need To Start A Tavern Business In South Africa
Whenever the tavern business crosses your mind, always consider the following before taking the necessary steps to establish yourself in the business:
1. Strategise and build a business plan: your business plan must coincide with your startup capital to help build a business within your managing capabilities
2. South African Police Service (SAPS) clearance certificate: you’ll need the SAPS clearance certificate to prove you are clean of criminal records
Note that this process takes a maximum of six (6) weeks to receive your clearance certificate.
3. Business location: make the right choice of location for your tavern business. It should be easily accessible and not difficult to find
Choosing a good location and finding the best premises for your business is key to your business commencement, but the first step to make is to request a zoning certificate from your local Municipality’s Town Planning or the Land Use Department.
4. Apply for a South African Revenue Service (SARS) clearance certificate: this is to be done to attain a tax clearance certificate
5. Apply for a liquor license: it is best to contact a reputable liquor license consultant to gain a fair idea about the cost involved in processing your liquor license certificate
Know that your liquor license processing duration can take up to (4 -6) months or more
6. Choice of products: make research into the tavern business by seeking advice and detailed information on the type of products that are fast movers
7. Choose good pricing of products that will attract more customers to patronize you with no effects on your profit
8. Product diversification: you can sell other products along with liquor and smokers requisite
9. Choose a catchy name for your tavern business and register your business with the CIPC
10. Employment strategy: decide on employing more hands to help in business operations if possible
11. Advertisement is a key: advertise your business with friends and family upon the set date of opening your tavern business
You can choose to buy an advertorial in the local newspapers introducing your tavern business opening specials to the public.
12. Know your target market
How Much Does It Cost To Start A Tavern Business In South Africa
Starting a tavern business in South Africa is costly and ranges from R700,000 – 1.5 million. So, before you choose to venture into the tavern business, ensure that you are financially equipped to process your certificates to opening and manage the business.
Is The Tavern Business Profitable In South Africa
The tavern business is by far the most profitable in South Africa, and you’ve never made a wrong choice of business.
According to the Retail Benchmarks Report for independently operated stores came out with an observation that South African liquor stores make an average monthly revenue of R506,251.
Best Places/Areas To Start A Tavern Business In South Africa
The Tavern business in South Africa can be established at any point of the length and breadth of the country.
This is because liquor intake is not meant for a specific group of people but meant for the High, Medium, and Low-income groups.
For higher patronage, choose places with a higher population, and your choice of an area must reflect on the type of products you stock your shop with.
Avoid stocking your shop with high-cost products when running your business in places of the low-income group.
How To Run A Successful Tavern Business In South Africa
Below are some of the factors to consider to be successful in running your tavern business in South Africa:
1. Good customer relationship is a pillar in making your business a success
2. Ensure you acquire all the certification required to legally start your tavern business
3. Practice strict financial and stock control, don’t leave your business in the hands of unqualified persons
4. Make vivid background check on employees before you get them employed
5. Implement a disciplinary procedure for employees because they are the ones who can keep your customers wanting more of your services
6. Avoid spending on “Nice To Have” equipment when you are a beginner in the business. You can buy that luxury equipment when you’re making more profit than expected
Challenges Faced In The Tavern Business In South Africa
Below are some of the challenges faced when running a tavern business in South Africa:
1. Weather change is a major challenge because in the rainy and cold days, sales in liquor drop
2. Selling to unapproved persons such as persons under the age of 18
3. The hard effect on intoxicated persons whose capabilities are impaired by alcohol
4. The long duration of the processing of liquor license is a big challenge, upon waiting for so long, there are instances where you’re served with a refusal letter to grant you your license
It takes a long time to reapply and wait for close to 6 months or over for another processing.
Benefits Of Setting Up A Tavern Business In South Africa
The following are some of the benefits gained from setting up a tavern business in South Africa:
1. The business comes with an overwhelming profit
2. Generates income to the government through the importation of products, licensing, and other taxes
3. Serves as an entertaining ground to the public
That is the information we can provide on how to start a tavern business in South Africa.