Banks, government agencies and investors are eager to fund businesses; why wouldn’t they be? They’re in the business of funding; that is what they do and that is how they make their money, so why wouldn’t they fund you?
Many new entrepreneurs complain, saying “funding institutions are not funding us”. This is an incorrect starting point. There are many entrepreneurs across South Africa receiving funding. If you are failing to obtain start-up capital, there is something wrong with you and or your idea. Thus the first question: “Are you financeable and is your business idea financeable”?
Are you financeable?
Are you, in your personal capacity, equipped with the necessary expertise, skill and knowledge to execute the idea you have put forward? Do you know what you are doing? The riskiest thing in business is owner incompetence. You have to fully understand your business, market, customers, products and so forth. Funders do not fund people who do not know what they are doing.
You must be able to show you have an understanding of business. And that is not to say an MBA or business degree-level understanding, but at the very least you must have a comprehension of your chosen field and the knowledge to be able to run a business. Therefore, funders will first look at you, the entrepreneur, to determine your skill level in relation to the idea you have proposed. So equip yourself via the many business training programmes out there dealing specifically with your industry.
Is your business idea financeable?
Do you have a financeable business idea, meaning can it be turned into an operating business that will eventually make a return? To determine this you must ask yourself some difficult questions and be as honest with yourself as possible.
Do the hard yards
You must conduct real research: study your industry, competition, market trends and potential customers to see how your concept fares against the status quo. Funders want to be shown how the business will make money. At the end of the day, if you cannot prove your idea is financeable, they will not even consider your proposal.
Munya Duvera (firstname.lastname@example.org) is CEO of Duvera Analytics