Financing your Business

Many small businesses fail due to lack of financial planning and control….

Getting your financing right upfront can be really tough, as you probably only have a vague of how much you actually need. Your research is crucial. Start by writing down what you have, what you think you will need to get started, as well as what you need to stay in business until such time as you actually start getting paid.

Now beak these elements down. Under “what you have” include a personal financial statement to provide a visual guide of what you own and what you owe. This is your personal assets and liabilities statement.

When looking at your start-up costs, your research should include phoning around and getting “ballpark” figures for all inputs. And if you’re in retail, don’t forget to include things like renovating or decorating your premises, as well as furniture and equipment. Legal fees, registration and licensing fees are also often forgotten about. These can mount up, so find out what you are in for. Provide a “contingency” amount to cover the unexpected costs that always crop up.

Even if you believe the tills will be ringing from the moment you open the doors, don’t include these funds in your operating expenses. The reality is that you will need at least three months’ worth of expenses (plus your start-up costs) available in order to operate comfortably from the start. I’d recommend that you put these funds into savings or interest-bearing account of sorts.

How much additional finance will you need?

Add the start-up finance required, to three-times your expected monthly expenses, and deduct the figures on your personal financial statement, to determine what additional finance (if any) you will require. Don’t forget to include your living expenses; it’s one thing being able to pay for all your business expenses, but if you can’t cover your rent, you have a problem. From here, work out your operating costs for your first year of operation.

Draw up a business plan from start

Don’t fall into trap of thinking that you only need a business plan if you are applying for finance from a bank or alternative funder. Draw one up from the start –on your own –as it will give you greater control over your business. If you follow this plan and update it on regular basis, it should keep you in the right track.

Remember that the better the plan, the better your chances of success. (For comprehensive business plan template, courtesy of Viljoen Consulting, email editor@bizmag.co.za to request one)

There is no doubt that starting a business is hard work and that the process can be daunting. But it is also incredibly rewarding. If you are adequately prepared, have a comprehensive business plan in place, and remain focused on your goals, you have every chance of success. That said there will always be things you haven’t anticipated, and owning a business means that you will be constantly learning. Continue to research your product or service and market. Keep reading up n new legislation and business ideas. Most of all do as much of it as you can, but don’t be scared to ask for help. Good luck!

(This article was taken from Your Business Magazine February/March 2012 issue, page 24) www.bizmag.co.za

Nikki Viljoen is an internal auditor and business administration specialist.  Contact 083 702 8849 or www.viljoenconsulting.co.za

Ekasi Entrepreneurship Conference

Young township business owners will get a boost next month [ed: Sept] when The eKasi Entrepreneurship Conference comes to Khayelitsha.

A conference to empower and encourage youth entrepreneurship in the townships will be held in Khayelitsha, Cape Town, on 28 September 2012. The meeting brings together entrepreneurs, business organisations, NGOs and experts from the UCT Graduate School of Business, to share the latest thinking around growing micro enterprises.

Small businesses are praised for their potential to create jobs and grow the economy but young entrepreneurs face the challenges of access to resources, knowledge, support and guidance. The eKasi Entrepreneurship Conference aims to inspire and engage young entrepreneurs through talks given by leading entrepreneurs and business thinkers.
Conference co-organiser and entrepreneur, Luvuyo Rani, says the idea is to unlock an entrepreneurial mindset and to impart knowledge of how to access finances and support.

“Through engagement with speakers and successful entrepreneurs, these young township entrepreneurs will see how others succeed. The hope is that this helps young business-minded people realize their potential while igniting their interest in entrepreneurship or encouraging them to take their businesses seriously,” he says.
The conference, designed and organised by Founders@work, is for start-ups that already employ three to four people. According to Rani, 300 entrepreneurs are expected to participate.

Rani says that entrepreneurship in townships is very complex as people become entrepreneurs for different reasons. But they have one thing in common: They are hungry for assistance and ideas for growth.
“We find that people start businesses out of a survivalist need, while others identify opportunities to capitalise on,” he says. “You have entrepreneurs looking for tenders, sub-contractors, semi-formal business owners, and those looking to expand their businesses.”

And he says the major problem is that there is no alignment between the national business development and the township entrepreneurs, creating a lack of access to information and a disconnect between entrepreneurs and opportunities to strike up relationships with bigger business organisations.
“We want to act as a bridge for people to come and see how to do business, how to judge the market, how to approach partnerships,” he says. “But, we also want to encourage bigger businesses to consider partnerships with small township business, as there are many opportunities for growth in these areas.”

Rani will be talking at the conference about his experiences of starting his township Internet Café business, Silulo Ulutho, and understanding the market for growing a business.
Also involved in the conference is Elvis Sekhaolelo founder of Founders@work and Eliada Nwosu, an entrepreneurship lecturer and researcher from the UCT Graduate School of Business’ Bertha Centre for Social Innovation.
“My work is in the development of micro enterprises and I get very excited when I see how these enterprises overcome the thresholds that are traditionally seen to hold them back,” she says.
According to Nwosu, small enterprises are often unable to access resources and support but she says she has noticed that entrepreneurs running these businesses are very innovative at networking with other enterprises, organisations and community entities to collaboratively access all they need.
“I look forward to hearing these entrepreneurs’ stories, about how the successful ones have overcome the obstacles that plague small businesses in this country,” she says.
Community impact can only be driven from inside that community and this conference allows stakeholers to drive the agenda, says Nwosu. The GSB has always aimed to ensure that any research has an immediate social impact.

And that’s why this meeting is unique: “The message of this conference will be delivered within the social, traditional and cultural norms of those business people operating in Khayelitsha,” she says. “It will make a much richer contribution in this way.”

Other speakers to be at the conference include motivational speaker Mr Vusi Thembekwayo, Ms Linda Dlova Executive Communications Management of the NYDA, Ms Maloti Mothobi Founder of Strato Wear, Siyabulela Xuza who NASA named a planet after, Ms Viola Manual, Executive Director of the Cape Chamber of Commerce, Mr Mokena Makeka Founder of Makeka Designs, Mr Guy Lundy Former CEO of Accelerate Cape Town, Simphiwe Ntlantsana Founder of Ntlantsana Accountant and Auditors and many more.

This conference is proundly sponsored by the National Youth Development Agency (NYDA) and in partnership with the University of Cape Town Graduate School of Business, Silulo Ulutho,Spier, TSIBA, The Raymond Ackerman Academy.

The organizers of the conference Mr Elvis Sekhaolelo and Mr Luvuyo Rani are fortunate to be associated with organizations such as Endeavor, The Power of Youth, and The Global Shapers community – an initiative of the World Economic Forum

The eKasi Entrepreneurship Conference will be held on September 28th September 2012 and To find out more contact Elvis Sekhaolelo on ekasi@foundersatwork.co.za call him on 074 561 0064.

Get your ticket(s) to the conference here on Webticket

The Conference is themed Inspire – Learn – Engage and Activate

Article written by Rothko Marketing, Design and PR