Need help funding a start-up?
As exciting as it might be to start your own company, it can also be very stressful and finances can play a huge part in that. No matter who you are, and how good your business idea is, if you are starting up your very own enterprise, the chances are that you’re going to need some help doing it.
Entrepreneurs are constantly searching for the next best thing; the latest trends or market demands are always go-to options for the man or woman who wants to be their own boss. There are a million ways to go about starting up, but are you doing it right? Creativity, capital, and a clear idea of how you plan to execute your business, all form part of the start-up process. Having the capital to get started is often the most challenging part. Let’s not forget that having a great idea doesn’t always come packaged with the funds to get the idea off the ground. Sourcing the funding should be the highest priority when you’re ready to take the leap into this new, high-risk, high-reward venture your ensuing. Business loans are the obvious choice, investors are another top-rated alternative.
If you’re in this position and could do with a bit of advice, sit back and keep reading. We have a few tips that could just make this new and exciting venture the easiest thing you’ve ever done.
Consider all the options of business funding South Africa has to offer
Yes, the bank will lend you money, but don’t always rely on the option that’s glaring you in the face. Look around and you may be surprised as to what other lenders have to offer. There are also angel investors that are looking for the most ideal project to put their money towards, as well as crowdfunding, grants, and other capital firms. Typically, entrepreneurs look to their own finances and savings to get their business started. Statistics show that 90% of start-up businesses fail. No one ever claimed to love stats since they’re generally pretty shocking, but they are what they are for a reason. Individuals are so eager to dive in without having considered the full plan of the business. That is short-term right through to the long-term. The failures all tend to transpire within the first year of operation. This rate of failure makes it tough to appeal to investors, but don't give up, and furthermore don’t drain your own account!
How to register a business in South Africa
Getting your business registered might be easier than you anticipate and can be done at a number of institutions in the country, even conveniently online. The Companies and Intellectual Property Commission (CIPC) website have an online portal for you to fill in your business credentials, area, industry, and a few other details to apply for registration. This can also be done on the Bizportal.gov.za website, with a bank including FNB, Nedbank, and more. Registering your business is a very important step as it is also a legal requirement for tax reasons as well as a requirement for business insurance. Getting approval for a business loan, as well as the future and sustainability of your business all depends heavily on this step.
Tips on how to start your own business
Starting a business can be a tricky task, but there are a few things you can do that will put you on the right path towards success. With the right funding, people, and a solid plan in your corner the sky's the limit.
Produce a business plan
Investors require a sound business plan on how you’re going to make your idea a success. It’s all fair and well to simply project figures, but they will need to be backed up with evidence of how you plan to achieve these figures. A strong business plan will get you the right business finance as it will have lenders or investors assured that the money is secure with your business idea and know-how of the industry you’re entering into.
Highlighting potential risks and furnishing proposed solutions for these risks, should they transpire, is a fine way to display your thorough research and understanding of the business you’re getting into. Don’t forget to include market analysis and other facts that might appeal to the readers of this well-thought-out dossier. The more exciting it seems, the more likely you are to have investors jumping at the chance to get involved.
Insurance and risk management
The first year of your business is the most important phase. While many businesses lack to get proper business insurance in place, it is absolutely crucial. Insurance can protect you from a wide variety of risks and ultimately from financial ruin. Besides all the major risks like fire, theft, natural disasters, and damages you will also need legal protection. For instance, if you have a restaurant, you could be held liable for food poisoning, one of your employees could get an injury on duty and blame you for not making the workplace safe. We live in a time where clients and employees are looking for opportunities to sue businesses and eliminating this risk is a key point in sustaining your business.
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Get out there & network
It’s absolutely no secret that the best way to attract investors to assist in a start-up business is to network. This means marketing has fundamentally become one of the most favoured ways to branch out on your business, develop business, and come across others that might have a vested interest in what you’re proposing. Relationships are everything. Building them is therefore paramount to earning any trust in your ideas and future ventures.
Other business owners are also willing to lend you sound advice for moving forward with your business. They might even have contacts that they can put you in touch with. These contacts will all be conducive to the longevity of your business. Some might come in handy during the start-up phase, some during the growth phase, and others later in the difficult and more challenging phases.
Learn to compromise
Remember that even though this is your ultimate dream idea, you still require business finance to give you a strong start. If investors are passing up on your idea, or otherwise suggesting alternative processes to the business, it’s important that you remain open to compromise. These are the people who are going to help your business take flight, therefore it’s a wise idea to consider that they might have some good ideas that you hadn’t considered but could really work. Just by being flexible, you can secure the chance for your start-up to be fully funded!