BUSINESSES YOU CAN STArT

ProPerty Maintenance Service

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UNLEASHING THE POTENTIAL OF YOUTH

1. INTrOdUCTION
this guide explains the basics of starting up a property maintenance service in South africa. it describes what kind of person is suited to the business and what training is available. it also tells you who your customers and competitors are likely to be, and what issues are affecting the market for property maintenance. it gives you an idea of the kind of costs you will need to meet and the regulations you must comply with, and ends with some sources of further information. a property maintenance business offers a range of services including home repairs, electrical maintenance, plumbing repairs, joinery, general repairs, fire safety, security installation and maintenance, as well as small building works, such as the repair of outdoor paving. it may also offer gardening, landscaping, cleaning and decorating services.

2. ArE YOU SUITEd TO THIS TYPE OF BUSINESS?

as with any service business, you need to be professional in your attitude if you want to succeed in this kind of business. it needs the sort of person who is reliable, knowledgeable and has some experience, as well as good communications and interpersonal skills. you need to have integrity in your business dealings, and be committed to giving a quality service if you want to keep your customers. you will also need to supervise your staff well, so you should have good people skills in this area too. this will help attract and retain the best employees. Poor employee morale can affect all areas of the business, from customer relations to the quality of work. it is easier to build good relationships with your staff if you have good policies on wages, working hours, health care, sick leave, promotional opportunities and other benefits. you must be prepared to spend long working hours on your feet. Patience is another essential personal trait especially if you are offering gardening, landscaping, cleaning and decorating services. Customers in these fields can be very demanding and diverse. your personal appearance (and that of your employees) is also important despite the nature of the work, it is possible to still be neat, clean and work in a tidy way. You and your employees need to be courteous to the clients. Outside of qualifications, this is the most critical issue for any business. If a firm is unable to maintain a friendly, courteous relationship with its customers, it will not be successful. it is the sort of business where you often rely on employees to do much of the actual work for you (especially gardening or cleaning services), so your employees attitudes play a large role in the success of a business. the way you treat and guide your staff will affect the way they, in turn, treat your customers.

3. KNOwING ANd rEACHING YOUr mArKET

3.1 Who are your customers likely to be? your customers will include landlords and residential letting agencies. Landlords own houses and buildings, and rent these out to make money; but they often dont want to be directly involved with ongoing maintenance. Letting agents are often contracted by buy-to-let landlords to look after their tenants (collecting rent, for instance) and manage the properties. When a tenant moves out, these agencies will often get you to come in and fix the place up before the new tenant moves in. also, there is regular work such as gardening and painting to be done, as well as emergency services such as fixing broken windows, blocked drains and faulty geysers. People who own a holiday home far from where they live also need a reliable local maintenance service to deal with repairs or emergencies. Many Johannesburg families, for instance, have properties near the beach, in the mountains or in the bushveld. if you set up your business near an area like this, you need to look for business among the letting agents in your area or the owners themselves. Government owns a vast range of properties that are used as offices, clinics, schools and social services. They will usually put out an annual tender for these buildings and grounds to be maintained and repaired. By starting small and getting a few regular jobs from these tenders, you can quickly grow your business into something more sustainable. Office parks are common in large cities and towns, and the property developers who own and let these spaces will need regular maintenance. talk directly to the property managers about what your business offers, and stay in contact with them regularly until they can offer you work that could lead to a long-term relationship.

UNLEASHING THE POTENTIAL OF YOUTH

South africas high crime rate has made suburban townhouse complexes very popular. Here, residents share common amenities like gardens, and while the units can be owned or rented, the body corporate arranges for joint services like security, painting, water supply, etc. these properties need one or more regular maintenance services, as there are may be as many as 50-100 residential units in each complex. it is not always easy getting information and statistics about the people living and working in the area where you want to start your business. But without this information, there is no way of knowing who will buy your products (that is, who your market is) and why. Statistics South africa does research into the countrys population, showing gender, education levels, population group, and income levels and many other indicators that you will find useful in planning your business. contact Statistics South africas user information services on tel: 012 310 8600, email info@statssa.gov.za or visit their website at www.statssa.gov.za. 3.2 Who will you compete against? If finding new clients is the most challenging aspect of this business, keeping them is a close second. Depending on your local area, business can be very competitive. Look in your local yellow Pages telephone directory to see who advertises themselves as property maintenance services. there is also an online version of this information at www.yellowpages. co.za; general directories like ananzi (www.ananzi.co.za) and easy info (www.easyinfo.co.za) will also help you identify who is operating close to you. your competition will be mainly the established property maintenance service providers in your area. they will usually have experienced tradesman with vehicles and resources offer quick response times, so competing will not be easy. Many of your competitors might offer only one or two of the services; they may focus on gardening services, for instance. this kind of competition will come from all sorts of trades, such as plumbers, painters and electricians. Many homeowners have full-time or part-time employees who are versatile enough to manage the basic maintenance work required on the property. Some homeowners may offer accommodation to tenants in return for a days work a week to do basic gardening and maintenance around the house. the competition on smaller jobs is often a self-employed individual who charges less because of the lack of business overhead expenses (such as rent and utilities). 3.3 What are the key issues affecting your market? the high incidence of crime, combined with rising property prices, has meant that many people choose to live in a smaller home inside a high-security complex shared by a number of other units. this has boosted the demand for independent property maintenance services, as residents no longer do all their own maintenance. they usually pay a monthly levy, which is used to employ a service provider to mow lawns, trim edges, fix leaking water pipes, repair geysers, paint outside walls and maintain roofs. alongside this growing demand is a general shortage of technical or trade skills such as electricians and plumbers; most people prefer to study for white collar positions, and scorn the more manual trades that are so vital to modern society. the result is that many of the people in property maintenance have more of a handyman status than a proper training in any particular mechanical discipline. this leads to problems when customers require a versatile but competent service provider to deal with a range of problems. Quite a few property maintenance businesses are beginning to subcontract skilled tradespeople for particular jobs, so they can offer a broad range of services. this means that you can use the services of different experts without the ongoing cost of employing a full-time workforce. to make this work properly, you need to develop a good network of trustworthy partners who you can trust to do a job well, and who wont risk your reputation with the customer by providing a shoddy service. remember that if you plan to offer gardening (mowing and trimming lawns, etc) as part of your service, you need extra staff and equipment at certain times of the year in Gautengs summer, for example. you need to plan for this seasonal effect if you want to survive through the year. 3.4 How can you promote this enterprise? Get in touch with estate agents and letting agents and offer to give a formal business presentation on the benefits of your services. visit business parks and get the names of the propertys manager; offer them the same information, and keep in touch with them in case some work comes available.

UNLEASHING THE POTENTIAL OF YOUTH

You can find estate agents through the Institute of Estate Agents of South Africa (www.ieasa.org.za) and their regional bodies in the main cities. also search for letting agencies on websites like www.easyinfo.co.za or www.ananzi.co.za. There will also generally be a directory of letting agents on the official or commercial websites of South Africas main towns and cities. the website www.saprop.com has a list of major residential estate agents, and other information on organisations in the industrial and commercial property development sector. Get some promotional material printed, like business cards and brochures that outline what you do, and what special services you offer. Prepare proposals for potential clients even if you are not sure what they want so that they can see what your rates will be. Simply set out carefully what you are quoting for; if there is interest from them, they will always ask you for a more detailed quote based on their actual needs. Make contact with the body corporates in the townhouse complexes or cluster home developments in your area, and give them a proposal containing your services and rates. try and get small jobs from them, just to prove yourself; more work will come once you can demonstrate your ability. Try placing a regular advert in the local, suburban newspaper even if its just in the classified section and in the Yellow Pages telephone directory (or its online equivalent at www.yellowpages.co.za). Monitor how well these adverts work by asking customers where they heard about you. other online advertising opportunities are on dedicated property websites (like www.saprop.com) or more generic search sites like www.ananzi.co.za and www.easyinfo.co.za. Have your name and details professionally painted on your bakkie and keep it clean if possible; this is your customers first impression of you, and these impressions often last. Also get your business name sewn onto the overalls for your staff, so that customers can identify them easily; this is also a good brand-building exercise. the Umsobomvu youth Fund subsidises business support for youth enterprises owned by previously disadvantaged youth. With the Business consulting Services voucher programme, you can get technical assistance and managerial support (in business planning, marketing, financial systems, etc) for your business from an expert in your area. See the Umsobomvu website (www.youthportal.org.za) or phone 08600 yoUtH (0860 096884) for more details.

4. wHAT wILL YOU NEEd TO STArT THIS BUSINESS?

4.1 What training do you need? Most people entering this sector will be qualified in at least one of the trades involved, such as plumbing or carpentry. If you dont have this qualification, then you need some practical experience of one or more of these trades, or a general aptitude for repairs and maintenance. If you specialise in areas like gardening and cleaning, you may find youre your talent and willingness to learn can get you through. it is still a good idea to do a few short courses to give your customers a reason to use you rather than someone else without any apparent training. you may want to enroll with a distance learning (correspondence) college like intec (www.intec.co.za), which offers mechanical, electrical, garden design and woodwork courses that may suit your study interests. it also offers business courses on bookkeeping, small business financial management, office administration and marketing that would help you run your operation more smoothly. Further education and training (Fet) colleges also run similar courses, although these are often full-time and take a year or more to complete. contact the Fet in your area and see what they have to offer that might interest you. if you are still planning your business, the getting on-the-job training by working with an experienced employer or colleague is also a good way to learn the various skills you will need especially if there is some formal training built in to your working schedule. the Umsobomvu youth Fund offers entrepreneurship education for in-school and out-of-school youth. Umsobomvu also offers you the support of a mentor as you start up and build your business, through its youth enterprise Mentorship Service. See the Umsobomvu website (www.youthportal.org.za) or phone 08600 yoUtH (0860 096884) for more details.

UNLEASHING THE POTENTIAL OF YOUTH

4.2

Obeying the law the information in this section will just give you a starting point; you should get legal advice from a professional before making important decisions that might have legal implications. Registering your business One of your first decisions when starting a business will be whether to operate as a sole trader (under your own name) or register the business under its own name (as a close corporation, partnership, co-operative or company). to make this decision, you must first understand the benefits and disadvantages of each option. For more information on this, you can talk to the Companies and Intellectual Property Registration Office (Cipro) on 0861 843 384 or go to their website (www.cipro.co.za). you can also download Umsobomvus guide on Starting your own Business from the organisations website: www.youthportal.org.za Paying taxes you need to pay income tax on your earnings as an individual. if you run your business as a sole trader, then all your business earnings will be regarded as your personal earnings and you have to pay tax on that. if your business is registered as a close corporation, company or cooperative, then the business has to pay tax on its profits. you also need to deduct Standard income tax on employees (Site) and Pay as you earn (Paye) from your employees salaries, and pay this to the South african revenue Services (SarS). Talk to the South African Revenue Services (SARS) to find out how to register yourself, your employees and your business as tax payers; you can contact their national call centre on 0860 12 12 18 or visit their website at www.sars. gov.za. Employment regulations If you have anyone working for you, you must register as an employer with the Department of Labour, and make contributions on behalf of your employees for Unemployment insurance (UiF) and Workmens compensation. as an employer, you need to comply with the Basic conditions of employment act, which regulates working hours, overtime, leave, deductions, etc. it also says that you must give employees their terms of employment in writing, and can only dismiss them using the correct procedure. If you have more than five employees, you must display a summary of the act at your business premises. For more information, speak to your local Department of Labour office or visit the departments website at www.labour.gov.za, which has a number of useful guides on these and other topics. Contracts with customers you need to sign a proper contract with every client, so that there is written agreement about exactly what work has to be done, how long it will take, when it will be completed, hours of working, security and safety issues, disposal of waste materials, and any other points. if you join a trade association or chamber of business, they may be able to help you with a suitable contract. otherwise, you can talk to an accountant or lawyer about this. you can also look on the Master Builders South africa website (www.mbsa.org.za) for information about contracts, or contact the Joint Building contracts committee (www.jbcc.co.za). Health and safety you need to comply with the occupational Health and Safety act, which ensures that workplaces are safe and healthy for all workers. Health and safety issues to consider include proper ventilation and fire extinguishing systems, as well as the use of hazardous materials. Look on the Department of Labours website for useful guides on what you need to do to comply with these laws (www.labour.gov.za) as a business in the construction sector, you also need to comply with the construction regulations of 2003, passed in terms of section 43 of this Act (see the Department of Labours website, under the section on occupational health and safety).

4.3

What sort of costs will you need to cover? you can start off by running this business from home, which will save on rent; just get at least a room or two that you can dedicate to business activity preferably with its own door to the outside.

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you will usually need a bakkie or a small truck for carrying equipment and materials. Make sure it has a lockable canopy and is properly insured. Make a list of all the essential equipment that you will use each day, and how many items of each you will need. if you dont use it regularly, rather hire it on a daily or weekly basis. For example, if you are doing garden services, dont rush into buying lawnmowers. rather work out how often they will be used, and see if you can conserve your capital by hiring items like this at first. if you will be employing staff, make sure there is at least a few months wages in the bank before you take them on; bigger customers take longer to pay, and there is always the risk of not getting enough work in the early months to cover your overheads. Office costs will include a computer, a telephone and answering machine, printer and fax, and possibly an internet connection. remember to budget for software and stationery. the Umsobomvu youth Fund provides micro-loans (r1,000 to r100,000) and SMe funding (r100,000 to r5 million) to enterprises owned by previously disadvantaged youth. See the Umsobomvu website (www.youthportal.org.za) or phone 08600 yoUtH (0860 096884) for more details.

5. FUrTHEr INFOrmATION
Umsobomvu youth Fund helps young South africans (those between the ages of 18 and 35) and women of all ages to get good skills, find job opportunities or start their own businesses. It has Youth Advisory Centres around the country where you can go for information and advice. Phone the call centre at 08600yoUtH (0860 096884) or visit the website (www.youthportal.org.za) to find an advice centre near you. Umsobomvu House, 11 Broadwalk avenue (off church Street), Halfway House, Gauteng Po Box 982, Halfway House 1685 tel: 08600yoUtH (0860 096884) Fax: 011 805 9709 email: info@uyf.org.za Website: www.youthportal.org.za the institute of estate agents of South africa encourages high standards among real estate agents; members have to be trained, qualified, and legally registered before they are allowed practice. Members are organised into eight regional branches around the country. 10 Howard Studios, Sheldon Way, Pinelands 7405 tel: 021 531 2074 Fax: 021 531 2931 email: kate@national.ieasa.org.za Website: www.ieasa.org.za The South African Property Owners Association is the representative body and official voice of the commercial and industrial property industry. its members control about 90% of all commercial and industrial property in the country; they include property owners and developers, property managers and brokers, banks, local authorities and property consultants. Po Box 78544, Sandton, 2146 tel: 011 883 0679 Fax: 011 883 0684 Website: www.sapoa.org.za Sector education & training authorities (Setas) collect monthly levies from businesses in their particular sector, and use those funds for training and skills improvement in their sector. the Services Seta collects and disburses these funds for the services sector, which includes property services, cleaning and domestic services businesses. over 90% of the businesses in this sector are small enterprises, so there is a dedicated department within the Services Seta to serve their needs. its work includes researching the SME demographics of the sector, finding out small enterprises main training needs, developing marketing strategies for SMes, and opening channels between the formal and informal sector.

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Po Box 3322, Houghton 2041 tel: 0861 10 11 48 Fax: 011 726 4416 Website: www.serviceseta.org.za this information is meant as a starting point only. While all reasonable efforts have been made to ensure that the information is accurate and up-to-date, the publisher makes no warranties and will not be responsible for any errors or omissions in the information, nor any consequences of any errors or omissions. Professional advice should be sought where appropriate.

cobweb information South africa (Pty) Ltd 2007

UNLEASHING THE POTENTIAL OF YOUTH