Financing your Business

1. Financing your Business Financing your Business Financing your Business Presented by Queen Kganyago

2. BARRIERS – ACCESS TO CAPITAL • Lack of skills and expertise • Lack of mentorship • Lack of awareness through poor information dissemination. • Lack of business infrastructure • Complex tendering documents and procedures • Lack of access to finance

3. MARKET / INDUSTRY CHALLENGES • A more enabling environment that contributes to better access to finance for very small/micro enterprises. • Finance is not easily obtainable for start-ups, micro enterprises, groups with no/ limited collateral or weak credit histories. • Access to information about SMME’s should be increased, to enable providers of finance to have sufficient knowledge to assess the risk of applications. • Finance Providers are seeking owners having the relevant skills and expertise to drive the business operations. • Receiving business plans that are viable and sustainable, supported by cash flow projections and historical financial information. • Potential of the business to sustain itself with the support of comprehensive mentorship.

4. SMME VALUE CHAIN Integrated Model Funding Viability & Sustainability Competencies • Basic knowledge • Technical skills • Basic experience • Proper investigation into business set-up. • Viability studies and bankable business plans • Traditional information • Business skills • Cash flow projections • Prove viability and sustainability • Financial risks • Repayment ability • Own equity • Collateral • Credit worthiness • Mentorship

5. Financing you business • Starting a business requires capital • Determine what your financial needs are • Precisely what the funds will be used for • Establish what your short, medium and long term financial needs are • Consider where you will source you funding to take care of these needs

6. Financing you business • You can finance your business in one of the following ways: • Use your own money • Borrow from family and/or friends • Approach a financial institution for a loan • Get an investor to invest in your business Remember that any business can start small and there might not be a need to borrow a lot of money. If your business is well researched and managed properly it will grow itself without always having the need to be financed

7. Financing you business • There’s a myriad of products and services available • Choose the most suited to your individual business • Make the product you choose work for your business

8. Financing you business Always remember that you are more likely to attract financial backing from other parties external to your business if you make an adequate financial contribution yourself. How can you expect other people to risk their money in your business when you, the ultimate beneficiary of its success, are unwilling to do so yourself? Your own contribution is viewed as your commitment to make the business work.

9. Managing the business administration • An entrepreneur must have full understanding of the administrative processes in the business.

10. Managing Human Resources • Finding employees and complying with the labour environment: UIF, Health and Safety Act, Basic Conditions of Employment.

11. Managing Finances • If you cannot manage your finances properly you can either make or break your business. Record keeping, managing cash flow- money coming in and money going out, costing and pricing, managing the assets of the business.

12. Managing Marketing Activities • This involves branding the business, advertising, promotions, packaging and sales.

13. In conclusion • To ensure that your business runs successfully, you need to have systems in place that you can manage easily and effectively. You need to have a set way of doing things, a way that enables you to deal with any challenges thrown your way.