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A Fin24 user wants to know what it will take to introduce solar-powered modular building into SA. He writes:
I have been in contact with a UK company to introduce an innovative flat-pack, solar-powered modular building into SA and possibly beyond. What would be the right way to go about starting this venture?
I don't have formal business experience, so where is the
best place to start?
Your advice will be highly appreciated.
Anton Ressel, a senior consultant at Fetola , responds:
On the surface, the product you are interested in certainly has legs and potential for our market. That said, there is a reason why it is not being rolled out en masse already, and my feeling is this is probably due to the high entry barriers for a product of this nature.
Depending on who your target market is (i e the government, the private sector, direct to end user), you would need to explore the requirements around a number of issues.
These include SABS approval and general safety standards, warranties and recourse against defects (both for you and your clients), BEE compliance if dealing with the government, export licences and permit requirements to bring in a product of this nature, import tariffs and duties, special requirements from the building sector, etc.
Your next step would be to
develop a funding and financing model - how much cash will you need upfront and for at least the first 12 months of operations, and where will you find
this cash (banks, government funds, equity investors)?
Also, what will your pricing structure be, and is it viable? How will you be marketing and selling the product, direct or through intermediaries?
At the same time, you also need to find out if anyone else is/has brought this product into the country as yet, successes and challenges and what other alternatives are out there in the market.
So in essence you need a full viability audit and feasibility analysis before even opening the channels of communication. There is a high risk failure around ventures such as this, so my advice is to do your homework and go in with both eyes open.
- Fin24
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