Joe's Small Business Obstacle Race: Roald Dahl's Cinderella and Economic Freedom in South Africa

Chris Pieters | May 28, 2015
A story all too common [1]
 
I guess you think you know this story.
You don't. The real one's much more gory.
The phoney one, the one you know,
Was cooked up years and years ago,
And made to sound all soft and sappy
Just to keep the children happy.
 
As a youngster, Joe decided to be all he could be, in the army. He has recently been found demographically unrepresentative and he left with a package. He has a small holding on which he has been growing vegetables. Joe notices that his neighbour, Ted, has a successful business selling agricultural produce. Most of it he grows on his small holding, but he also buys some produce and adds value to it before selling it.
 
Joe convinces Ted that he would be a great partner and that together they could make more money. Ted agrees. Ted tells Joe that if he can meet all the legal requirements he will assist him in a joint venture. Joe wakes up the next morning and begins his journey to sustained economic freedom. 
 
Joe is not entirely sure what it is he needs to do, or how he can get it done for that matter. He takes Ted for coffee. Ted informs Joe that he will need to overcome the following obstacles:
 
A plan – how will this business operate and how will he keep it afloat;
Capital – how will he fund this business and how will he keep it funded;
SARS and CIPC – how will he make sure that his income helps others through taxes;
Skills – what business skills will be needed to operate the business as well as what skills would be required as an agrarian guru;
Approval from the Municipal Council – the legal hoops that Joe has to jump through to make sure his business can operate where he wants it to;
 
Ted informs Joe that the he will require storage and an accounting system similar to his.  Joe will need to make his property safe to house the infrastructure. Once everything is up and running Joe will need to finance the initial input. 
 
Obstacle 1 – The plan 
 
Joe sits down and considers what he needs to do. He will need to carefully evaluate what skills he will need both from a business as well as a production side. These skills will range from marketing to bookkeeping and from product knowledge to production line monitoring. 
 
Ted has provided Joe with a business plan, other business related literature and advice on how to cope with SARS’s unfriendly website.  Joe now realises that a business is more than simply buying and selling. He meets with Ted numerous times to discuss the intricacies of urban agriculture.
 
Obstacle 2 – Capital
 
Doing the sums Joe realises that he will need to acquire the relevant funds to get his venture up and running. Joe has, inter alia, the following options to consider:
 
Secure a loan from a micro lender;
Apply for a loan from his bank;
Apply to a government department claiming to offer assistance in such matters – Department of Agriculture, Forestry and Fisheries as well as the Department of Small Business Development;
A stokvel.

Joe goes to his Bank, at which he has built up a good credit rating over the years, and is approved for the full amount pending the approval of his business plan and surety. As Joe leaves the Bank they  inform him that he does not meet the FICA requirements and that he will need to decide on the type of legal entity to utilise – they suggest he consults the helpful people at SARS.
 
Obstacle 3 – SARS and CIPC
 
Joe scans the SARS, as well as the Companies and Intellectual Property Commission (“CIPC”), home page and is delighted at the information available. He soon realises, however, that the information is too much and rather confusing. He decides to go to the local branch and see if they would be able to assist him. He leaves early in the morning and by closing time knows everything he needs to know about queues and forms. However, he also knows that what should work best for his enterprise is him. 
 
At once, one of the Ugly Sisters,
(The one whose face was blotched with blisters)
Sneaked up and grabbed the dainty shoe,
And quickly flushed it down the loo.
Then in its place she calmly put
The slipper from her own left foot.
Ah ha, you see, the plot grows thicker,
And Cindy's luck starts looking sicker.
 
Joe asks the accountant, who was behind him in most of the queues, to set up a legal entity and register in accordance with the relevant legislative provisions. Joe pays for the services and returns with all the documents to the bank, which then approves his loan.
 
Obstacle 4 – Skills
 
In his free time Ted offers Joe introductory advice on commercially oriented small holder farming. Joe makes numerous notes and learns more than he knew there was to know about farming. Ted explains that the farm is only one part of the larger picture. Joe will need to learn about distribution networks and operating costs that go with this business.
 
Joe does some research into commerce and agriculture, all of which is available on YouTube.  Later he may be able to afford to take a course at an accredited institution and notch up some credits at National Qualifications Framework Level 5.
 
Obstacle 5 – The Municipal Council
 
Through all this Joe makes the discovery that he will need to inform the Council about what he intends on doing. The council receives Joe’s application and raises the following concerns:
 
Plans for alterations to buildings.
Application for rezoning of land.
Application for business rights.
Application for water usage.
 
All of these concerns need to be adequately adhered to in terms of the relevant bylaws:
 
City of Johannesburg Metropolitan Municipality Water Service By-Laws
City of Johannesburg Metropolitan Municipality Public Health By-Laws
City of Johannesburg Metropolitan Municipality Informal Trading By-Laws
City of Johannesburg Metropolitan Municipality Waste Management By-Laws
 
Joe now needs to approach the correct departments and deal with the flood of forms.  He reaches the edge of sanity as he engages the power of low level bureaucrats. 
 
In the kitchen, peeling spuds,
Cinderella heard the thuds
Of bouncing heads upon the floor,
And poked her own head round the door.
'What's all the racket? 'Cindy cried.
'Mind your own bizz,' the Prince replied.
Poor Cindy's heart was torn to shreds.
My Prince! she thought. He chops off heads!
How could I marry anyone
Who does that sort of thing for fun?

Our Hero’s Choice
 
Joe, drowning in paper work and queues, has an epiphany, one that comes incredibly close to the one experienced by Cinderella. 
 
Cindy answered, 'Oh kind Fairy,
'This time I shall be more wary.
'No more Princes, no more money.
'I have had my taste of honey.
 
Joe decides that the life of a subsistence farmer is not all bad and that trying to run a small business is probably futile given the nature of the system. Joe simply looks at his veggies and chickens, considers barter and informal selling, and smiles:
 
Within a minute, Cinderella
Was married to a lovely feller,
A simple jam maker by trade,
Who sold good home-made marmalade.
Their house was filled with smiles and laughter
And they were happy ever after.

Notes:
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[1] - http://www.poemhunter.com/poem/cinderella-35/
 
Chris Pieters
Legal Researcher
chris@hsf.org.za