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Would you do just about anything to make some money, from hanging out at the local laundry and offering to do other people’s washing to selling popcorn for a profit to the local neighbourhood children? If the answer is yes, pull up your chair and read what Irvine Green has to say in his latest blog.
The first ingredient to small business success, reckons Irvine, is the ability to identify money-making possibilities at every opportunity. If you don’t think you’ve got the nerve to wring money out of every relationship and situation, then running your own business is probably not for you, is his message. – JC
By Irvine Green
In most cases of starting up a SMME, there’s a need for money…! Sometimes a lot, sometimes just enough to get things kick started.
We all know of the routine that includes business proposal, business plan, see a bank ‘relations manager’, leave disappointed… until all banking options have been exhausted. There’s a saying among people who’ve started a business and got going in spite of the banks : ‘The only time a bank will grant a loan is when you don’t need it’ !
Nowadays there’s a growing swing AWAY from going the business plan route – especially if it’s a new age hi-tech business or something that WILL work but has never been done before (eg. Computer Camps..!) It’s hard to write a business plan until there’s a generally accepted knowledge of the field you’re entering. Market response, ways of advertising, who (or which sector of the population) is the target market, and more.
So, I’ve thrown the bank finance idea out of the window. Forget the banks unless your dad or uncle is CEO of one of the big five…! Or have an open minded billionaire relative…!
To digress briefly. I know that many of the readers of my series are probably those already in business (employed or doing their own thing) and so have probably used the old methodology of finding finance to kick-start things. But no doubt these articles are also being passed onto younger members of the wider family – perhaps even this year’s matriculants or degree graduates, and that is really who the whole concept of SMME start-ups (the crux of these articles) is primarily aimed at. And so I am approaching it from the ‘beginner businessman/woman’ point of view. The pocket is empty, there’s an idea going begging…and buyers who’ll lock onto that idea.
The whole thing about financing as a ‘bootstrap business’ is this. Passion for what you want to do… and equal passion about selling that idea to prospective customers. Because… if someone who wants to be your first customer can SEE the flames in your eyes and hear the passion in your presentation, the odds are s/he will probably lend you more or less the basic cost of what you need to provide the service/product and pay the balance later on completion of the job. I haven’t gone that route myself… but I have heard of many who did.
Complete the job to the full satisfaction (and more) of your first client.. and you’re starting to build a sales force as well. That FIRST client might even lend you some start up capital to get your second client and just ask for a certain payback of the loan per client served… or if used as a reference, convince client number two to assist you with some money up front. If THAT can be achieved, you’ll know you’ve achieved market relevance and growing trust.
Plan number two. I heard someone talk about this on a radio show a few days back. Try the ‘three F’s route’ to borrow some money. Family, fools and friends…! I don’t know so much about the ‘fools’ part as that can backfire, but again – if family or friends can SEE that spark and hear that passion you have for your idea, one of THEM might be your first client. And who better as a reference than a good friend?
Then there’s the parallel bootstrap routine (as I call it). Start something simple that has a high profit return from which you can gather funds to pay for the main business you want to start. From making and selling popcorn to doing someone’s washing for them at the local ‘pay as you go’ laundry… then there’s housesitting or queueing for people who are short of time when they urgently need a parcel posted, or TV licence or telephone account paid. There’s thousands of ways to do the ‘simple bootstrap’ for fund raising to finance your MAIN business. From re-cycling to browsing charity shops for items that are priced below what you feel you can sell them for…or buying ‘odd lots’ at auctions (especially from deceased estates) and selling the items separately. Some people make a LOT of money from this as a MAIN income.
If you’re throwing the ‘Yes, but…’ at me by now, go and stand on a street corner. Business ISN’T your scene..! Nor self-employment. But if instead you’re brainstorming as you read this and dreaming up something special to raise funds for your main business, you’ve probably got two workable businesses in the pipeline at once..! Great. When one business is ‘down’ the other one may be keeping you on your toes 24/7…!
Of course there’s the other usual methods of financing such as the National Youth Development Agency, various small business assistance agencies, SMME consultants, and more. Browse some ‘ small business oriented ‘ magazines at the bookshop for any articles/references to financing a SMME.
Where there’s a will there’s a way. And IF you have the passion you’ll FIND the way (and the money). Probably IT will FIND YOU.
To close… there’s the other interpretation on ‘will’ (which can work if you’re in luck). ‘Where there’s a will I want to be in it..!’
I know this has been a light hearted approach to financing. But read between the lines and beneath the text and meanings and you’ll see where I am coming from. If you’ve been innovative in finding a product or service to take to market, the odds are you’ll be innovative in seeking and getting finance. Or backing (as I did, in kind, when starting computer camps, as told last week).
Good luck. And tell biznewz.com all about how you got it right for others to marvel at…!
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