Funding remains one of the most common hurdle for small businesses in South Africa despite the abundance of various institutions with finance specifically earmarked for small businesses.
A probe on finances for small businesses. There is a growing disconnect between financiers and small businesses seeking access to this funding. However sometimes small businesses themselves create additional hurdles by overlooking the clearly stated requirements of financiers, which may hinder or delay the funding process.
Herewith are five key steps to get small businesses ready for funding:
The ability to account for your business’ financial position accurately is a critical component of being funding ready. It is also advisable to conduct two different forecasts with as accurate figures as possible to provide realistic reflections for the worst- and best-case scenarios.
Have a concise business story that contains only the essential elements that will interest an investor – marketability, sustainability and your own passion for the project. To do this, you need to ensure that you know all the aspects of your business, as well as its market and industry.
Have a detailed business plan ready not only to remember the finer points of your business but to be able to send or present it if someone wants to have a closer look will help to convince potential investors of your readiness.
It is almost guaranteed nowadays that an interested would want to do a background search on the internet. It helps to have a good website and a strong presence on social media in which your successes are highlighted both in your current and previous ventures and jobs.
Too often, entrepreneurs approach a financier without determining whether they are in fact the best fit for their business. For instance, the funding requirement may be outside the financier’s threshold or the business may be a sector that is not of interest to them.
It pays to do your research on all potential financiers in order to determine whether the business matches the specific criteria, speaks to specified parameters and that the proposed funding agreement ensures a fair deal for both the entrepreneur and investor.
– BUSINESS REPORT