Wadau how did you get funding to start your own business? Will appreciate pointers.
Through hardwork,tears,blood,sweat and certainly not through charity or benevolence.
Enlighten us please
Hardwork. My first big money was a tender to supply Laptops n bank walikataa kunifund ati biz is too young…Friends wanahepa ati the waiting period to return the cash is too long, family chipped in Abit…but mostly ni wewe…
The first thing any would be funder will think is what’s in it for him. Approach prospective funders with your biz plan, payment period etc… Personally, the first time I started biz, my partner and I approached our funder, pitched him our business plan, he was skeptical, because it seemed to good to be true and totally unworkable, but because he was a childhood friend, he came through, after exactly 26 days his investment returned 12%, after that he was willing to top up his initial investment 10 times.
First off. You need to start small!! Hata kama it’s with 10k. Work from your house, do not hire unless you have to etc.
After you have gathered some data and proven that the business can work then raise capital can be through a loan or a straight up equity deal. I prefer the latter.
Borrowing from friends and family is relatively easy. I went the VC way since I was raising a substantial amount that my F&F could not provide. But damn, it is very hard to get someone to give you money in this town. Make sure you have actually data and not hypothetical because that is everything when trying to raise money from total strangers. Keep your receipts well, document your work etc.
Biggest mistake I did was to raise capital too late. Try to do this at least 3-5 months ahead to reduce stress ( I cannot emphasise more on this point ).
Have your business plan ready, sample data and key metrics collected from your pilot and actual profit and loss statements and cash flow statements as well as projections. I had none of this when I started.
Make sure to have a lawyer read through the term sheets or any other document that requires you to append a signature on and do not be afraid to negotiate on the terms.
Lastly when asking for Capital, you will be asked to account for every penny you are asking for. Make sure you draw up your expenses ( operational costs and Capital expenses) to present to the investor.
Start with whatever little you have without incurring a loan, then go for a loan if the business shows prospects of expanding. At least you will have a track record to support your application for funding.
Good pointers
I reared 100 chicken back in 2015…for fun! 6 months later, I was selling eggs worth 800 daily. Banked for religiously since it was not anticipated. Got a mobiloan, topped up and bought an incubator.
Fast forward to 2017 Dec, I invited my bank manager for some chicken cHoma. On seeing my now 1200 birds, he hooked me up with my current gf (shhh…shit happened! ). Who insured them all with UAP and the bank manager gladly gave me XXmillions to win a Kenchic contract farmer.
Key point…create am relationship with your potential financial institution now, as you develop your idea. They prefer meeting you halfway nowadays…they wouldn’t fund my 100 birds remember!