
Part 7 of 8 · Decide
Choosing Between Them: Runway, Capital and the Four Tests
Choose on three constraints in this order: the capital you can access and survive losing, the time you can go without income, and the skill or relationship you already hold. The best business on paper is worthless if it needs eighteen months of runway and you have four.
Part 7 of 888% through the guide
Indicative. Businesses that invoice quickly are not necessarily better — they are simply less demanding of runway.
Section 5Match the business to your position
| If this describes you | Start here |
|---|---|
| Under R200,000, need income within three months | Digital and compliance services agency (20), office and institutional supplies (1), or commercial cleaning (2) |
| R500,000 to R1.5m, some technical background | Industrial PPE distribution (5), agri-inputs and irrigation (11), solar PV installation (18), or accredited training (4) |
| Artisan or engineering skill, R1m to R3m | Hydraulics and motor rebuild (6) — the strongest margin-to-capital ratio in this guide for someone with the trade |
| Existing relationships with mines or contractors | Occupational health clinic (8), PPE distribution (5), or contract logistics (7) |
| Farming background or family land | Nursery and orchard services (12), cold storage (9), or pack-house (10) — the services around farming, not the farming itself |
| Professional qualification (medical, legal, accounting) | Private day clinic (16), or a specialised professional practice serving the leakage gap |
| Access to R4m+ and patient capital | Student accommodation (17), cold storage (9), or third-party warehousing (15) |
| Import-export or logistics experience | Customs clearing and forwarding (13) — the highest margin per rand of capital in this guide |
Section 6The four tests before you commit
Run all four before spending anything
- 1The ten-call test. Phone ten potential buyers and ask where they currently buy and what it costs them in time. If you cannot find ten buyers to call, you do not have a market. If they are all satisfied with an existing local supplier, you do not have a gap.
- 2The working capital test. Calculate how long between paying for something and being paid for it. Multiply by your monthly cost of sales. That is the cash you must have before you start, and for government work it is 60 to 120 days.
- 3The artisan test. If the business depends on a scarce technical skill, name the person. Not the role — the person. If you cannot name them, the business does not exist yet.
- 4The rent test. For any premises-based business, calculate the monthly rent as a percentage of realistic monthly gross profit. Above about 25 per cent and the landlord owns the business, not you.
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