Businesses You Can Start Greengrocer

1. Introduction
This guide explains the basics of starting up a greengrocer shop 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 fresh produce. 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. Greengrocers run shops or stalls that sell fresh fruit and vegetables. They may also sell other types of produce, like flowers, herbs, eggs, milk, butter, cheese and speciality foods such as olive oil, nuts and seeds, and organic produce. Greengrocers can also offer a delivery service, taking orders over the phone, by email or through their website.

2. Are you suited to this type of business?

Greengrocers need to be friendly, approachable people with sound communication skills. You should be able to provide a good level of customer service, and develop a good rapport with your customers. You should have a good eye for detail so that you notice what needs attention in your shop especially health and safety issues. You also need to have good management skills, with the ability to plan, co-ordinate and delegate. As a greengrocer, you should be prepared for long opening hours with an early start. You may need to be up in the early hours several times a week, to travel to the farms and wholesale fruit and vegetable markets where you will choose and buy your stock. You will need to be fit and strong, as you will spend most of your time on your feet, either serving customers or stocking shelves, and the job will involve a lot of lifting and carrying. You need a strong interest and a good knowledge of fresh fruit and vegetables so that you know what is in season, the shelf life of different produce, ripening times, how to identify freshness and quality, etc. A good basic arithmetic for weighing and measuring goods, taking payment and giving change is needed in this type of business.

3. Knowing and reaching your market

3.1 Who are your customers likely to be?
Most of your customers will be people living or working locally, so you need to choose your location with this market in mind. Because fruit and vegetables are important staple foods for every household, you can target your business at any class of neighbourhood. The difference would be in how you choose, package and market your produce. In an area of more working class household, you would focus your attention on value-for-money produce and discount packages of different items. On the other hand, in wealthier areas you would give more attention to smart packaging, exotic produce, and prepared items (carrots without tops, chopped pumpkin, ready-made fruit salad, etc). Vegetarians and health-conscious consumers are an important market for you, as well as people who are concerned about farming methods and the use of fertilizers and pesticides. You may consider having a section of your shop with just organic produce, to cater for these needs. Even though you are a retail outlet selling mainly to consumers, an important part of your business will be selling in bulk to restaurants and caterers (especially those that are too small to buy direct from a wholesaler). Institutions like schools and hotels could also buy from you in bulk. Usually, you would have to deliver to them regularly, so you would need a truck and driver if you dont already have one for your own collections from suppliers. 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?

You will be competing with other greengrocers in your area. You should get to know your direct competitors thoroughly so you can identify potential gaps in the market. Look in the local Yellow Pages to see which greengrocers in your area are listed. These competitors will be small, independent operators like you, but will also include large outlets like Fruit & Veg City (www.fruitandvegcityco.za); their buying power and huge turnover makes it possible for them to keep prices low. You will have to find other ways, in addition to good prices, to attract customers. Supermarkets themselves often have their own fruit and vegetable department. These could be your toughest competitors, as customers will find it convenient to buy fruit and vegetables where they can also get a variety of other household groceries. Convenience stores and garage forecourt shops (like Engen Quickshop and others) will also sell a basic range of fresh produce. This trend towards fresh food at these shops is growing, with Fruit & Veg City now in a partnership with Caltex to run some of their forecourt shops. Hawkers in many cities and townships will sell a basic range of fruit and vegetables, operating from the sidewalk or from simple stalls (near taxi ranks, for instance). They offer a convenient purchase for people on their way home on public transport. Their prices will also be competitive because their overheads are so low. Wholesale greengrocers who sell to supermarkets and other outlets will also compete with you.

3.3 What are the key issues affecting the market?

The public is increasingly aware of the dangers of fast food, and the Department of Health has for some time been concerned about unhealthy eating habits. The National Food Consumption Survey showed that over 20% of children between the ages of one and nine years old are stunted, indicating chronic past under-nutrition. While part of this problem is caused by poverty, the department found that 6% of children in this age group were overweight. The South Africa Demographic and Health Survey in 2003 found that 20% of adult men and 26% of adult women were overweight, while 9 % of adult men and 30% of adult women were obese. Various programmes are underway to encourage healthier eating habits, and the results have been seen in higher sales of fruit and vegetables over the past few years. Interest in organic food continues to grow, as many people are worried about the effects of pesticides and fertilizers. Many consumers prefer pre-packaged food, particularly mixed chopped vegetables for roasting, packaged salad leaves and frozen vegetables because of their busy schedules. Transportation, storage as well as grading and packing of are of greater significance than for most manufacturing industries. The use of cold trucks to transport fresh produce is critical if greengrocers want to compete with the high quality of supplies in the market. Vegetables and fruits are perishable goods, and every hour lost after harvesting, even in cold storage room and cold truck, means that quality is lost.

3.4 How can you promote this enterprise?

Choose a good location for your shop, where people can see you as they pass by (either by road or on foot), and where they can get to you easily. If most of your customers use public transport, make sure you are near a taxi rank, bus stop or train station. Attract passing trade with outside displays of fruit and vegetables, and make your prices easy to see. If you are close to other popular shops, this will also make it easier for customers. Traditional retailers like greengrocers can offer a more personal and friendly service than chains and supermarkets, so you need to build a rapport with regular customers. Simple things like calling a customer to let them know that a product they have ordered is available could go a long way in promoting your business You could also generate media interest by doing something unusual like giving a fruit and vegetable cookery demonstration, or stocking rare and exotic produce. Advertise your shop at places where potential customers are likely to go, such as local slimming and fitness clubs; target your customers by offering special recipes for slimmers.

Make the most of new sales opportunities by listening to what your customers want. If a number of customers ask for a particular vegetable or herb, try and get it. Ability to source unusual fresh produce, unavailable in supermarkets, will give your business a unique selling proposition. Preparing fresh cut fruit, fruit platters, vegetable platters and fruit kebabs for customers special events could also help promote your business. List your business in the local business directories such as the Yellow Pages, and try advertising in the local newspaper. Also consider listing yourself in an online directory such as www.yellowpages.co.za, www.businessdirectory.co.za or www.easyinfo.co.za and www.firstier.co.za. Monitor the results. The National Youth Development Agency subsidises business support for youth enterprises owned by previously disadvantaged youth and women. 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 NYDA website (www.youthportal.org.za) or phone 08600 YOUTH (96884) for more details.

4. What will you need to start this business?

4.1 What training do you need?
Although there are no specific qualifications necessary to run this business, a greengrocer does need a range of skills for all the daily tasks, which include: ordering supplies from wholesalers and farms; weighing and checking stock; wrapping and packing goods for sale; rotating the stock to maintain quality and freshness; collecting payment for sales and operating cash registers; and advising customers about cooking methods, storage requirements and nutritional aspects of fruit and vegetables.

There are a number of technikons around the country offering a range of courses; contact the career guidance centre of the technikon in your area for more information about what they offer. You can also download A Learners Guide to Higher and Distance Education from the National Youth Development Agency website (www.youthportal.org.za) or go to a Youth Advisory Centre in your area for advice. Enrolling for an environmental health courses will be useful as you will have to be aware of personal and environmental hygiene. The HACCP Academy (www.haccpacademy.co.za) offers short courses in occupational hygiene and safety for people in the food business. Colleges like Damelin (www.damelin.co.za) offer a one-year certificate in wholesale and retail credit control, as well as courses in new venture creation and small business financial management on a full-time basis. The National Youth Development Agency offers Entrepreneurship Education for in-school and out-ofschool youth. NYDA also offers you the support of a mentor as you start up and build your business, through its Volunteers-in-Action Mentorship Programme. See the NYDA website (www.youthportal. org.za) or phone 08600YOUTH (96884) for more details.

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, cooperative 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 NYDAs

guide on Starting Your Own Business from the organisations website at 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 SARS to find out how to register yourself, your employees and your business as tax payers; the national call centre number is 0860 12 12 18 and the website is www.sars.gov.za. If your turnover is more than R1 million per year, you must charge your customers value-added tax (VAT) on your products, and pay this VAT over to SARS regularly. Contact SARS to register as a VAT vendor and to learn how to fill in a VAT return. To explain this process to small businesses, SARS has published a Small Retailers VAT Package. Contact your local SARS office, or visit the website at www.sars.gov.za and click on Forms in the left hand column. 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. Environmental health regulations All businesses that serve food or drink to the public need to comply with laws that ensure your food is safe and your premises are clean. Department of Health regulations (in particular, Number R.494 of 2002) say you must have a Hazard Analysis and Critical Control Point (HACCP) system to ensure that all food is handled and served without risk to customers health. You then need a certificate (valid for one year) from a certifying body before you can start trading. For more detail on this, read the regulation (download this at www.doh.gov.za/docs/regulations/2002/reg494.pdf) and talk to your local municipality about how to comply. You should also be aware of the Foodstuffs, Cosmetics and Disinfectants Act 54 of 1972 (as amended by the Foodstuffs, Cosmetics and Disinfectants Amendment Act 32 of 1981). This law controls the sale, manufacture and importation of foodstuffs, cosmetics and disinfectants. In terms of this Act, which addresses the manufacture, labelling, sale and importation of foodstuffs, the Department of Health requires that all foodstuffs are safe for human consumption. Food labelling regulations According to the South African food labelling regulations, food labels should have the following mandatory information; name and address of manufacturer, instructions for use, net contents, country of origin, batch identification, expiry date and nutrient analysis by calculation. A useful summary of labelling requirements is provided by registered dietician Gabi Steenkamp (www.gabisteenkamp. co.za/foodlabelling.htm). The Food Advisory Consumer Service also has information on labelling (www.foodfacts.org. za/siteindex/labelling).

4.3 What sort of costs will you need to cover?

The payment of rent and business rates will be ongoing expenses, and will depend on the size and location of your premises. Also remember to budget for other utility bills, such as water and electricity. You will need to install refrigerated display units in the shop, and perhaps also a freezer if you plan to sell frozen produce. Budget for shelving at various heights, to suit the kind of produce you will display. You will need one or more scales to weigh products; some of these come with automatic label printers, so that the price can be immediately pasted on the packet. You will also need an electronic till and you may consider installing a credit card swipe machine facilities to accept card payments from your customers (speak to your bank about renting

a machine). Ongoing costs, such as constant supply of fruits and vegetables, packaging and promotional expenses should also be included in your budget. As you expand, you will need to pay more salaries, and perhaps related costs like uniforms. As your business grows you may also need a van with cold storage facilities for transporting supplies and making deliveries. You will also have to consider insurance costs such as employers liability insurance for staff, as well as motor insurance for any delivery vehicles. You must also insure your premises and equipment against fire, theft and damage. The National Youth Development Agency provides micro-loans (R1,000 to R100,000) and SME funding (R100,000 to R5 million) to enterprises owned by previously disadvantaged youth and women. See the NYDA website (www. youthportal.org.za) or phone 08600 YOUTH (96884) for more details.

5. Further information
National Youth Development Agency helps young South Africans (those between the ages of 18 and 35) and women 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 (youthconnect) at 08600 YOUTH (96884) or visit the website (www.youthportal.org.za) to find an advisory centre near you. Physical Address: NYDA House 11 Broadwalk Avenue (off Church Street) Halfway House Gauteng Postal Address: PO Box 982 Halfway House 1685 Telephone: 08600 YOUTH (96884) Fax: 011 805 9709 Email: [email protected] Website: www.youthportal.org.za The Wholesale and Retail Sector Education and Training Authority (W&RSETA) is responsible for building skills within the wholesale and retail sector. PO Box 9809 Centurion 0046 Call centre: 0860 270 027 Tel: 012 676 9000 Fax: 012 665 2559 Email: [email protected] Website: www.wrseta.org.za The Food and Beverage Manufacturing Industry Sector Education and Training Authority (Foodbev Seta) is the Department of Labours agency to accredit and fund training courses for people in the food and beverage industry. It can advise businesses on appropriate courses in the sector. PO Box 245 Gallo Manor 2052 Tel: 011 253 7300 Fax: 011 253 7333 Email: [email protected] Website: www.foodbev.co.za

The HACCP Academy is an accredited company and is registered with the FoodBev Seta as a service provider. It offers training in amongst others good hygiene practices, occupational hygiene and safety in a food and beverage environment and internal auditors course. PO Box 102 Sanlamhof 7532 Tel: 021 982 3052 Fax: 021 982 3022 Email: [email protected] Website: www.haccpacademy.co.za The Agricultural Research Council offers 1-2 day skills training courses in subjects such as fruit development and preparation. Contact the ARC for information on their current courses. PO Box 8783 Pretoria 0001 Call Centre: 0800 427 000 Tel: 013 753 7000 (Nelspruit) or 021 809 3100 (Stellenbosch ) Email: [email protected] Website: www.arc.agric.za

Useful websites and publications

The website of the Johannesburg Fresh Produce Market (www.jfpm.co.za) will help you to understand how to buy from the market and deal with market agents. The Johannesburg market is an important source of produce for the Gauteng area. The South African Mango Growers Association (www.mango.co.za) is a producer association set up to look after the interests of mango farmers in South Africa. It represents about 90% of all mango growers in South Africa. Their website has a list and contact details of agents around the country. The South African Avocado Growers Association (www.avocado.co.za) is an association of avocado growers of South Africa; the website has a list of agents around the country. You can find a directory of South African fruit farms at www.safruitfarms.com. The magazine Chips is all about the South African potato industry, and is published by the industry association Potatoes South Africa. Tel: 012 349 1906 Fax: 012 3492641 Email: [email protected] Website: www.potatoes.co.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 2009