On applying for a wholesale card to purchase and sell products I was sent an application form which required the following
Proof of your Membership to any professional body recognized in the industry as a requirement for purchasing products.
Your Website Address
·Your VAT number.
These questions not only intimidate small business but also in a lot of cases prevent them continuing. Even I who have a fairly well known business based mostly on my writing and journalistic work am disadvantaged in this.
When you establish a business you are overcome with the criteria you must meet. Your first thought is to establish some kind of income. So you find a product in-line with what you are doing. Then focus on one item which to you will bring you in a stream of cash to do all that is required which is maybe as follows:
1. Find a product to sell
2. Find money to buy that product
3. Sell that product
4. Repeat the cycle until such time as you can register the business
Whilst you are doing this you must still feed and house yourself. Most successful business is started by kids who have the opportunity to do this at the expense of their parents. But what happens when you are older or have no back-up such as parents. Sometimes you rely on a spouse to support you, a pension or other grant or if all is lacking you may find yourself living out of a car.
But let’s say you are lucky. Your product sells well and you start to make enough to keep yourself clothed, fed and housed (even if it’s in someone’s bedroom)
The next requirement in building your business is a place to work from and a way for customers to contact you. Telephone by landline or cell is normally the chosen method. Soon you receive a call from a customer who wants a good solid order. So you go out of your way to find a means in which you can fulfil that order only to be stumped again.
The company from which you wish to order requires you to have one or all of the following
1. Website Address
2. Membership of a professional body
3. Trade reference
4. VAT number.
Since business entering a certain field is still trying to learn their business and to establish themselves, requiring this kind of information is prejudice.
A website address is fairly simple as you can use a Facebook profile, a free site or a company site to prove this fact.
SME's do not know who they should be talking to and how to get hold of them. Thanks to the internet this has become easier if you know which field you fall into. Companies such asShanduka Black Umbrellasand South African Small Business can help with this.
Trade references are only built up from doing business. So this is a little bit more challenging, but not impossible. If you keep buying from the same supplier after a while ask them for a letter of recommendation. This will get you in the door of bigger companies who may even give you 7 to 30 day credit. This will help build your credit record. After 6 months ask the company for a print out. Take this to the bank and with your good record of putting away money every month the bank will give you a line of credit. Depending on how your business is doing financially you can ask to see a small business consultant who can guide you with specific products that the bank has to build your company even more. Do not be overly concerned if your credit record is in the red as in time this can be worked through. The only company I know that never sorted out my credit record after I settled my account is CellC.
Now Vat is another story, which I have battled to get right. When you go to investigate the VAT registration you suddenly find all the nasty SARS monsters at your door. They ask you for your records for the last five years. After you have sorted out your SARS they tell you that you need to be earning R 1 million every month for 12 months. This takes precious time only to find out you did not need it right away.
If my company was to offer a wholesale card the requirements I would ask for are
1.Copy of the buyer’s bank account to see if the buyer could buy and pay for the order. This will also allow me to set a credit limit in line with what they can afford. I have kept the buyer and I have built up future business.
2.Copy of the buyers ID to verify if they are who they say they are.
4.Links to the following websites
All this information is sufficient as it tells you
·Who is the person
·What do they do
·Where and how much money
·How they run their business
·Whether they are reliable, honest and likely to succeed