Creating a successful business requires two important elements: identifying a gap in the market and managing your finances, which includes keeping debt to a minimum.

After working as a sports commentator during the 2010 World Cup, which enabled him to travel the country, Joseph Kgomo realised that there was a gap in the market for affordable holiday tours especially to seaside destinations.

“Most of my friends wanted to know what it was like to travel. They wanted to experience travel but they could not afford to pay a lump sum,” says Kgomo whose tour operating business  KwaNdebele Tours allows his customers to pay off their holiday in installments.

Kgomo says payment through installments has made his business stand out from the rest and enabled many people who have never travelled before to experience air travel and, in many cases, the sea for the first time.

Kgomo believes the key to his business success was that he never took on debt.  “Starting a business with a loan is a complete no,” says Kgomo who found creative ways of marketing without incurring costs.

Kgomo used social media in the form of Facebook to advertise his first tour to Durban in 2010.

“People were skeptical at first but we eventually signed up 18 people,” says Kgomo who then went on to set up his own website.

After receiving quotes for between R4 000 to R8 000 from web designers, Kgomo went onto Google and discovered how to create a website for free.

He continued to advertise through Facebook and word of mouth but could also now afford to print pamphlets which he distributes to social clubs and burial societies.

“I also advertise on the South African tourism website (www.vayamzansi.co.za) which is very helpful and I am now also familiarising myself with Twitter, but it is not as popular as Facebook,” says Kgomo.

Kgomo believes potential entrepreneurs need to realise that banks don’t lend money to people who just have a business plan. “They won’t assist unless they see how you have done with the money you have,” says Kgomo who adds that once he has been operating for five years he will approach the bank for a loan to expand his business.

He plans on buying his own fleet of vehicles, which he currently hires, as well as invest in a building for his offices.

Kgomo’s advice to other potential entrepreneurs is to start small and grow the business over time.

“It took Richard Maponya 27 years to realise his dream of owning a mall. If Maponya could “wait” for 27 years, so can we,” says Kgomo who received his inspiration from reading stories about other entrepreneurs like Maponya, Herbert Mashaba and Raymond Ackerman.

“If you read about these entrepreneurs and learn what they went through, you realise that with the little you have, you can go places, you know it is possible.”

Getting it right from the start

Riana Grobler, senior marketing consultant for small businesses at Old Mutual , says Joseph Kgomo owes his success to five important elements:

• He started his business without a loan or any debt
• He knew the importance of advertising and also the power of social media and therefore designed his own website at no cost.
• He uses social media to advertise his business. This is clever, as printed media is very expensive.
• He started small and he grows with his business. He is learning more and more about business every day and he is using his knowledge to grow his business.
• He is keeping his overheads low and he clearly knows his breakeven point. He has a good understanding of his business, his expenses and his income.

 This article first appeared in City Press.