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Starting a tour or tourist transport business

Provided by Business Partners Ltd, South Africa's leading investor in SMEs


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Many entrepreneurs who are thinking of entering the Tourism Industry would like to start a transport business. While it can be a lucrative enterprise, starting a tourism-related business is perhaps not as easy as one would think.

The Transport Sector is defined as businesses involved with transporting tourists in and around South Africa, including airlines, shuttles, trains, buses, ships, taxis, etc. Before you start this type of venture, make sure you are aware of all the rules and regulations governing the sector.

Here is a simple checklist to help you get organised.

1. Check on the licenses and other legal requirements:

  • Your vehicles must have clearance or roadworthy certificates to transport fare-paying passengers. These are available at your local licensing authority
  • Do your vehicles have Public Road Carrier Permits to transport fare-paying passengers? These can be obtained at your Provincial Department of Transport
  • Do your vehicles cross country borders? You will then need cross-border transport permits available from the Cross-border Road Transport Agency in Pretoria
  • Do you carry appropriate insurance – both General Public Liability and Passenger Liability?

2. Prepare a business plan to prove the feasibility of your concept. This will require some intensive research, such as looking at competitors, your target market and their needs, and do on.

3. Determine the position that your product will occupy in the marketplace. Will it be up-market, budget or somewhere in between?

4. Identity your competitors and determine if your product can compete with theirs. Try to identify the unique selling point (USP) or product difference that will give you a competitive edge.

5. Ensure that your business is structured to maximise management and operational efficiency, while minimising expenses. Hire an accountant and lawyer who can assist you in achieving your goal.

6. Investigate insurance. Cover will be needed to protect the business, staff and shareholders against the eventuality of claims. Be sure to take out adequate cover.

7. Plan where you want to be in a few years, the type of clients you will have, where they come from and any expansion that you envisage. Commit these plans to paper giving yearly targets that must be measurable.

8. Determine the marketing strategies and actions that need to be taken to reach your customers and achieve targets. This will include selecting and servicing distribution channels, advertising and promotional activities.

9. Regularly monitor results and always remain customer driven (not product driven). If your customers' tastes and needs change then your product may have to follow suit.

10. Keep your product fresh and consider ways to encourage loyalty, which will generate repeat business.

The tourism industry in South Africa is both a tough and profitable industry to get into. If you plan well and get the right backing, your chances of success will greatly improve.

Source: SATSA

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