Welcome to the Zulu Kingdom, KwaZulu-Natal

How To Establish A Cultural Village

Definitions

Note that legislation now requires all businesses providing services to tourists be registered with the provincial tourism authority, Tourism KwaZulu-Natal. Kindly contact TKZN if you are not sure whether registration is mandatory or optional for your business, as well as information on how to register.

A cultural village is an area which is set aside to depict the life styles, activities and artefacts of a particular culture, usually in the format of a living museum.

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BUSINESS ISSUES

LAND AND PLANNING ISSUES

Space and Infrastructure

Approach TKZN to guide you on the amount of space needed for the envisaged buildings and visitor facilities. Establish from the Local or District Municipality if potable water, power and adequate road access are available for the chosen site.

Parking

The following questions should be considered:

If people are going to arrive in their own transport is there parking for the number of visitors you envisage? Is there public transport to the site and is there parking for tour buses and the like?

Amenity Value

The following questions should be considered:

Does the attractiveness of the surrounding area enhance the value of the site for visitors? Is the site free from unpleasant odours?

Accessibility / Roads

The following questions should be considered:

Is the site easy to find for people using their own transport or using public transport? Is the site within reasonable distance of main roads frequented by tourists? The District Municipality and the Department of Transport have controls for the erection of any signs. Permission must be obtained from the Department of Transport to construct new access points onto main roads.

LEGAL REQUIREMENTS

Land Use Zoning

Approach the Department of Local Government & Housing and the Local or District Municipality about any special environmental, mining or other zones that could conflict with the intended use.

Where the land use will be substantially changed, application must be made to the Provincial Department of Agriculture and Environmental Affairs for permission for a change in land use in terms of the National Environmental Management Act (107 of 1998).

Where land to be acquired falls within Ingonyama Trust Lands, a Permission to Occupy (PTO) certificate must be obtained from the Department of Agriculture and Environmental Affairs

Permission from the Provincial Planning authorities (TRPC) is also required.

Licensing and Registration

Approach your District Municipality to register your business. If you intend to serve meals, a trading licence must also be purchased. If liquor is to be sold on the establishment, application must be made to the Liquor Board for a liquor licence in terms of the Liquor Act (27 of 1989). For further information on the application for and issue of licences, consult the Liquor Act, a copy of which may be obtained from the Liquor board at the Department of Arts, Culture and Tourism.

Regulations and By-Laws

Approach the District Municipality for guidelines on fire risk to ensure that you have adequate fire control equipment and arrangements. Approach the District Municipality to ensure that your plans comply with their regulations on water, electricity, sewerage, noise etc.

Other Legal Requirements

Since a cultural village may be operated by a Community Trust or Section 21 Company, it should be negotiated with the Local Municipality whether levies (on turnover etc) must be paid.

If you wish to erect a road sign in the road reserve area (as distinct from on your own property) advertising your business then you need approval from:

Department of Transport in the case of national roads; the Facility Signs Committee in the Provincial Department of Transport in the case of secondary roads; the Local Municipal Engineer in the case of local roads within a Local Municipality area.

Policy

TKZN and the Department of Arts, Culture and Tourism should be consulted for updates on policy. Structure of Your Enterprise

You may be registered as a business in the form of a Private Limited Company ((Pty) Ltd Company, or Close Corporation (cc)). However, if the project is a community initiative, the cultural village could be registered as a Trust or a Section 21 Company.

Chambers of Commerce are a good contact through which to obtain details of organisations that can give advice on the structuring of your enterprise. Advice may also be obtained from Business Advice Centres

Managing Your Enterprise

Management of your enterprise will involve:

being clear on who the managers are and what their responsibilities are; having a staff structure with clear job descriptions; a decision on the types and packaging of services; bookkeeping and accounting; arrangement of VAT and taxes; record-keeping for your own records, for advertising reasons and for tax purposes; taking and managing bookings from clients; employment and labour conditions which includes employment equity, labour unions, and conditions of employment. It is important for local people to be employed in the operation; training of staff: it is vitally important that staff are trained in customer care and to be professionals in their field. It should not be taken for granted that employees automatically know all about the particular culture without any training, and it is important that the authenticity of the establishment is maintained. insurance cover which includes both security and public liability.

The Department of Arts, Culture and Tourism, Amafa aKwaZulu- Natali and TKZN may be consulted for advice on the authenticity of your product; and

Chambers of Commerce are a good contact through which to obtain details of organisations that can give advice on the management of your business.

Marketing and Advertising

Marketing and advertising may be done through a variety of media such as through printed brochures, internet, television and word of mouth. TKZN should be approached to enter your business into their tourism assets database for the province which provides freely available information on tourism facilities. The District Municipality has a copy of the same database. Publicity Associations should be approached to help disseminate your information.

Any brochures produced to advertise your establishment should include an easily readable map.

Voluntary Requirements

It is important to establish partnerships with neighbouring communities in order for them to have a sense of ownership in the venture. Part of the levy received should therefore go to the community involved. The promotion of such partnerships is advocated in the White Paper on the Development and Promotion of Tourism in South Africa.

Membership of the Southern Africa Tourist Services Association (SATSA) is advisable to ensure that minimum standards are adhered to. Membership of SATSA can be used as a marketing tool and provides tourists with an assurance that certain standards are being maintained. The requirements for membership of SATSA are available from the SATSA website: www.satsa.com or requests for application forms should be addressed to:

The Chapter Secretary of SATSA c/o Gooderson Leisure Corporation P.O. Box 10305 Marine Parade, 4056

SATSA represents the private sector organizations which service the incoming Southern African tourism industry. Membership includes airlines, coach operators, accommodation establishments, vehicle hire companies, attractions, conference organisers, and related marketing organisations.

You must have a registered Private Limited Company ((Pty) Ltd Co) or a registered Close Corporation (CC). Sole Proprietors are not eligible for membership.

There is a joining fee of R627.00. The annual subscription for Chapter membership is R1425.00. The annual subscription for National membership is R2850.00. The subscriptions are in addition to the entrance fee. The first year is a provisional membership only and is subject to SATSA approving your full membership.

The costs of joining and subscribing are reviewed every few years.

The SATSA application form requires the applicant to sign an agreement to abide by the SATSA Code of Conduct.

The company must produce a copy of their brochure (describing services offered and prices) used for marketing the organisation. SATSA evaluate whether the product being offered falls within the SATSA parameters and ensure that prices are market-related.

If the applicant is not a South African citizen then they must produce proof of residency in South Africa and a copy of their work permit.

The application is to be made in the name of the company or close corporation, not in the name of the individual owner (s).

The application will require details of general public liability insurance. (This type of insurance is to cover your business in the event of someone slipping on your carpet (for example) and they sue you for negligence)

The application must be accompanied by a letter from the firm's accountants/auditors indicating that they are the appointed auditors and that the firms financial record books confirm that the company is in a sound financial position. The application must also be accompanied by two letter of recommendation from existing fully paid up SATSA members.

Sources of Information

A useful source of information for cultural villages is TKZN website (www.zulu.org.za). TKZN also has a resource centre which may be used to obtain information.

FINANCIAL ISSUES

Sources of Finance

Finance for your proposed business may be obtained from various sources. It can either be in the form of individual savings, loan finance, or in some instances, State subsidy.

Sources of loan finance include:

business Partners Limited Ithala Development Finance Corporation Limited Industrial Development Corporation (IDC) Development Bank of Southern Africa (DBSA) Joint Venture Financing Commercial banks.

The Department of Trade and Industry provides limited subsidies for certain small and medium sized enterprises in the tourism field. They should be consulted.

TKZN may be approached for advice on potential funders.

Business Plan

Loan organisations normally require a comprehensive Business Plan to be prepared in applying for a loan. Such a Business Plan should include:

business analysis; financial forecasts; based on rational assumptions and experience; budgeting guidelines; schedules determining the amount and kind of finance most appropriate for the business; details on proposed financing sources; and useful information about the planned business which will aid decision making by the loan organisation.

The Business Plan must make allowances for the provision of water, sanitation and electricity in cases where they do not already exist.

More details on the required content of business Plans may be obtained from commercial banks, Business Partners Limited, and Ithala Development Finance Corporation Limited.

Advice on business planning may be obtained from: the Tourism Market Research Division of TKZN, Business Advice Centres the Department of Economic Development and Tourism. Commercial banks Business Partners Limited, Ithala Development Finance Corporation Limited.

You may employ consultants to advise you or to draw up your business Plan with you. This would be at your own expense. TKZN could give you a list of such persons that could assist you. Also consult the How To Booklet on How To Draw Up a Business Plan.

Financial Record Keeping Good record keeping systems provide information for managing finances. The key items in record keeping include:

Original records e.g. sales slips, receipts, invoices etc.; Journals which record the details of every transaction in chronological order e.g. the cash book; Ledger where information obtained from journals is made more useable; Trial balance is a list of all ledger accounts balances taken out to prepare financial statements; Financial statements: Income statement balance sheet.

The minimum requirements for a small business operation are:

Cash Book Cash Control Systems Assets Register Debtors Record Creditors Record.

Budgeting

budgets are based on past experience current state of affairs and future expectations. budgets will help provide an estimate of financial requirements in the execution of plans in the business operation. Kinds of budgets include:

Sales budget: a forecast of expected monthly income; Materials budget: expected purchases; Labour budget: expected remunerations and numbers of workers; Capital budget: expected fixed assets expenditure e.g. machinery, land etc; Cash budget: expected working capital requirements over a specific period.

Tariff Structures

Tariffs should be based on those of your competitors and a detailed analysis of income and expenditure for the proposed operation. Research will therefore be needed in order to set realistic tariffs. Publicity Associations and SA Tourism may be approached for assistance.

Advice on setting of tariffs may be obtained from: TKZN tourism assets database, Publicity Associations, and SA Tourism.

LIST OF USEFUL CONTACTS

Amafa aKwaZulu-Natali 035-870 2050

Business Advice Centres Durban: 031-309 5432 Pietermaritzburg: 033-345 4604

Business Partners Limited Durban: 031-266 7130 Richards bay: 035-789 7301

Department of Arts, Culture and Tourism 031-309 7559

Ithala Development Finance Corporation Limited 031-907 8911

Tourism KwaZulu-Natal (TKZN) 031-366 7500

South African Tourism (SA Tourism) 011-895 3000

Southern Africa Tourist Services Association (SATSA) 031-261 2525

Department of Trade and Industry 012 - 322 7677

Provincial Planning and Development Commission 033-395 3066

Department of Local Government and Traditional Affairs Ulundi 035-874 2783 Durban 031 204 1771 Pietermaritzburg 033 395 2111

Department of Agriculture and Environmental Affairs Pietemaritzburg: 033-355 9100

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