Interview at Ukhozi FM by Msizi Simon Ndlovu - Talking about business funding methods

Ukhozi FM: 29 July 2019 14:30 to 15:00 - Interview with Msizi Simon Ndlovu

Topic: Where can people get funding for their businesses? What do they need to consider when applying for funding?

Answers:

1. Firstly, I spoke about financial literacy. You cannot start a business without sorting out your financial issues. You need to be very organized, be strict to yourself and professional. I spoke about four things that you need to consider: 1) How to save [business people need to be disciplined at saving, it's core]. 2) How to prioritize your needs [personal and business needs - separate them as far as possible]. 3) Do not mix your personal expenses with your business - meaning do take business money to cover your problems, rather have a stipulated amount that you pay yourself with [be strict and consistent - meaning don't take R10 this month and take R50 next month, if you are paying yourself R10 be strict and only take that much]. 4) Use money properly - don't overspend, always plan the next move with your money. Don't just decide now and buy now, you might make uninformed decision/s.

Now to get to the real questions:

2. I advised, always consider self-funding as a first option. Save money, as little as you have and work towards a specific goal. [This prevents debts and interest and should the business fail, you don't have much to lose].

3. Strong and strategic marketing and sales are answers to funding your business. I know people are expecting easy answers like - 'go to this department/company/person' no that does not work as easy as you would imagine if it was that easy everyone would be queuing at the departments and request funding. Sales are the best answer, start small. It is even better if you are offering services because you can just charge and get a certain percentage upfront. The trick would be getting start-up funds to get the equipment to offer those services, hence my answer was: save or friends or family. If the idea or business is good enough one person in your circle must be willing to assist and of course, your personal credibility plays a crucial role as well.

4. Now the part that you have been waiting for: I spoke about this website (www.finfind.co.za) it is a hub for all funders/companies [for loans, investments, funding]

5. Crowdfunding - definition of crowdfunding (Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over US$34 billion was raised worldwide by crowdfunding.

6. Angel investors - An angel investor is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. Angel investors usually give support to start-ups at the initial moments and when most investors are not prepared to back them.

7. Venture Capitalist - is an investor that provides capital to firms exhibiting high growth potential in exchange for an equity stake. This could be funding startup ventures or supporting small companies that wish to expand but do not have access to equities markets. Venture capitalists are willing to risk investing in such companies because they can earn a massive return on their investments if these companies are a success.

8. Please also tap into the below:

a) Department of Trade and Industry (DTI)

b) National Empowerment Fund (NEF)

c) National Youth Development Agency (NYDA)

d) Industrial Development Corporation (IDC)

e) KZN Growth Fund

f) Isivande Women’s Fund 

g) KFW Development Bank

h) Land Bank

i) Small Enterprise Finance Agency (SEFA)

j) Technology Innovation Agency (TIA) 

k) South African Banks

You may try international sponsors (google and find those in your field)

Also, try incubators programs.

Lastly, don't approach any funding organization before actually starting the business and see it grow or indications that it will grow, market research is very important - it is the key. Many investors, banks, organizations do not fund an idea but they are funding the already operating businesses.

Thank you 

Follow all my social media platforms for such business advice.

Handle: Msizi Simon Ndlovu - MSN (Facebook page, LinkedIn, Instagram and Twitter)