During the course of this article, we will explore the various requirements needed to not only fund your venture but how to ensure your business survives the startup phase and develops into a stable business.

Mentioned below are a few tips to guide you in your journey to get your business up and running:

Step 1: Believe in your idea

Like anything in life, if you do not have a genuine belief that your idea or business will succeed, it ultimately will fail. Belief forms the core of your overall foundation for your business before you have even put pen to paper on an idea. It gives you a sense of self-confidence about your business that will make circumstances such as the market rejecting your initial pitch easier to recover from mentally in order for you to keep pushing forward.

Step 2: Solve a current need/want in the market

Ensuring your product or service serves a current need/want in the marketplace is crucial in determining whether it can be a clear success or failure. The marketplaces’ response to your idea will be based on the level of output and effort you put into getting it out to your target market. One of the most common issues in business today revolves around current businesses generating ideas for new business avenues, as a result of ineffective marketing of their product/service.

Step 3: Educate yourself/ Entrepreneurship programmes:

In order to better understand business processes and any other aspects related to their jobs, employees could embark on business management training courses. This type of training teaches employees technical matters related to their jobs that will allow them to perform them at a higher level, that will allow them to delegate new information at a more effective rate. As a result, employee morale is increased which can improve productivity, which can improve business profitability in the long term.

For example, consider the case of Busi Moyo. After developing a passion for event planning after planning her own wedding, Moyo went on to start her own business during the pandemic. Her mindset played a crucial role in keeping her business afloat, stating that – “When COVID-19 hit last year, I decided to use my spare time wisely and start working on the concept of KwaKuhle. The fact that we were in lockdown and businesses were suffering did not discourage me, I knew this was what I wanted to do’’.

Find out more about other entrepreneurs who made a success of their own startups

Furthermore, here are some South African business incubators for start-ups and what they can offer you:

RCS embarked on a program with the TSIBA Ignition Academy to assist with the contribution of small business development in South Africa. Level Up was designed to assist small businesses with access to skills, markets, resources and networks.

GCIP-SA forms part of a global initiative whose main aim is to promote environmentally friendlier technology innovation whilst also supporting entrepreneurs in growing their SMMEs and start-ups into viable, investment-ready businesses.

SABizHub provide businesses with affordable workshops and opportunities that empower prospective entrepreneurs by providing them with the skills and knowledge necessary to start their own business.

Investec Entrepreneurship programmes serves as a continuation of the group’s beliefs that are based on their entrepreneurial spirit. Investec believes it is vital to develop entrepreneurs whose success will create opportunities for economic participation for an increased number of South Africans.

The South African Institute for Entrepreneurship, or SAIE for short, aim to address poverty and unemployment issues through entrepreneurially focused initiatives.

Step 4: Fund it

There are a number of ways to acquire funding for your business that will align with your current financial requirements, including:

Business Loan – A type of loan that acts as a debt-based funding arrangement between a business and a financial institution such as a bank. As a result, smaller businesses must rely on other lending products, such as lines of credit, unsecured loans or term loans to secure finance.

Peer-to-peer – This type of lending enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman.

Credit Card – A credit card allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment.

Venture capitalists - Venture capital is a form of private equity and a type of financing that investors provide to start-up companies and small businesses that are believed to have long-term growth potential. Venture capital is normally acquired through well-off investors, investment banks, or any other financial institutions.

Friends and family - Money, which is usually in the form of a loan, are acquired by a business owner from either family members or friends that is used to help finance their start-up or growing business.

Personal loan - A personal loan refers to an amount of money that can be borrowed to use for a variety of purposes that may include: debt consolidation, home renovation repayments, or even to use to plan a dream wedding. Personal loans can be offered by banks, credit unions, or online lenders.

How to qualify for a Business Loan

Your credit score is arguably the most important factor that lenders will analyse when considering your credit application. It serves as your overall track record of finances that allows them to determine whether or not you would be an ideal candidate to repay the loan. It is important to ensure you have your financial statements and management accounts prepared for the process.

Below are the respective credit scores and their likeness to be accepted by lenders:

  • 700+: the best rating you can achieve.
  • 660+: a good credit rating.
  • 620 to 659: chances are that you may struggle to get a business loan.
  • Below 620: lenders will view this as a high-risk score.

 

Tips on Keeping Your Business Afloat in the First Few Months

  • Tip 1: Assess your business finances to determine your overall financial position. This will allow you to plan accordingly to ensure your business stays on top of its finances.
  • Tip 2: Apply for financing that suits your overall business needs.
  • Tip 3: Get informed on tax provisions to better prepare your finances to ease the overall impact it will have on profits.
  • Tip 4: Negotiate with customers and creditors for either quicker payment collection times or extended payment periods to allow your business additional time to increase your businesses finances.
  • Tip 5: Make business more efficient by streamlining any services that can be afforded to be outsourced so that more time can be spent improving the business to make it more profitable.
  • Tip 6: Adapt to market trends to stay relevant in your market whilst also allowing for increased target market size and potential sales.
  • Tip 7: Stay in touch with (and in front of) Your Customers to build personal connections that will lead to brand loyalty, and repeat business.
  • Tip 8: Study your competition and learn from the aspects they perform effectively, and apply them to your own business to gain a competitive edge.