Get your start-up financed

Yes, it’s possible! You can get the finances you need to get your brand-new company off the ground.

By Craig Falck for Africa Report
Photograph: © Stephen Coburn | Dreamstime.com

Nobody wakes up in the morning and says to themselves, “I’m going to start a business today.” Starting a business requires a thought-out process that takes time (and by time, we mean work with pen and paper). Likewise, you can’t just go to any financial institution or financing organisation and demand money. So how do you get financial assistance for your start-up enterprise?

First thing’s first – draw up your business plan. Go to your accountant and ask him or her to take a look through your plan and to make changes to your plan where necessary. An expert pair of eyes tends to add some foresight to any business endeavour. Your business plan is the outline of what you propose to do with your business, how everything will run and be organised, how you plan to achieve success, and most importantly, how much you think it’s going to cost. You’ll need to list items such as property rental/building/buying costs, equipment costs, how much your service and products will cost, and all other figures that are important. You will need a professional, accurate and solid business plan to put into action before you approach financial institutions or investors.

If you don’t have a solid business plan, you need to take a step back and assess the situation. If you’re able to adapt it, then do so, because no financial institution is going to give you money if you can’t prove to them that your business has a strong chance of success. Success in the business world isn’t guaranteed (at least not when you’re first starting out), so prepare yourself for some hard work in the initial stages of your plan. Every business has a break-even point in their business plan – it’s the time frame that you’ve calculated you will need from starting up to when you will cover your initial costs and start becoming profitable. You can’t apply for a loan with a business plan that has a 10-year break-even point for a small enterprise. No one is going to invest in a company or give you the money if it will be 10 years before they start seeing a return. It just doesn’t make sense, business-wise, so make sure your business plan sees its returns in as quick a time as possible without compromising the success of the big picture.

Once you’re sure that your business plan is up to scratch, it’s time to apply to various institutions. Obviously you can’t be over the top in your request for financial assistance. Once you’ve applied, the institution does a lot of calculations and they will assess the viability of your business through your business plan. If they find a single flaw, then you can expect an ‘application denied’ letter. It’s a sinking feeling when you receive one of these, but it doesn’t mean you have to give up. Move on to a more detailed, actionable business plan and pitch the new and improved idea to another financial institution. Make sure you’ve crossed your Ts and dotted your Is and ensured that not a single thing is out of place in your application.

It’s not impossible to get financed for your start-up. It’s difficult, yes, but nothing in business is easy. It’s time to roll up those sleeves and get cracking on a solid business plan. It’s the first step towards success as a businessperson. And success tends to come to those who plan ahead and never give up.