Entrepreneur

How can I find sufficient finance for my business?

Very often, the set up and establishment of a “franchise” or business will call for a big investment. Only a few entrepreneurs are able to find this investment from their own resources. Fortunately, various funding options exist.

Accessing these funding options is a different matter altogether, but being part of a reputable and well established franchisor, will give you a head start. What does this mean? You need to understand that there is no shortage for start up finance. Financiers accept deposits from investors and pay them interest and unless they lend the money to borrowers (in this case potential franchisees) at a higher rate of interest, they will soon go out of business.

However, what is in short supply, are reputable entrepreneurs who are willing and able to present financiers with a well thought out finance application,comprehensive and professional business plan.

Investors (including bankers) often complain about the number of people/entrepreneurs who approach them for finance without a proper “Due Diligence” of the venture the loan is being applied for. They cannot present a quality business plan or loan application, nor are they able to answer some very basic questions about their business in a convincing manner.

Do not fall into this trap – a little preparation goes a long way. Your banker/investor is going to ask some tough questions and they will expect you to provide realistic answers to the following questions:                                

  • How much money do you need and what are you going to do with the loan?       

  • Can you demonstrate how this loan will help you to increase your profits?

  • How do you plan to structure repayments and what alternatives can you offer should the business’s cash flow fail to keep up with ongoing financial obligations?

  • What can you offer as collateral?

A great presentation can help. You are in competition with thousand of others who are also wanting loans. Demonstrate that you have really thought things through. The answer is not merely to ensure that you have got things right, but to make sure you have got nothing wrong. In the case of a loan application any tiny little thing that can give the bank/investor an opportunity for throwing your loan application out of the window – like careless typing errors – will be pounced on.

The most effective way to approach Investors is to do a “Investors Pitch Deck” or ask a professional consultant to prepare one. Check out our Business Services page for more details on Investors Pitch Decks. Or make use of our online consulting service at ZOOM, SKYPE GOOGLE MEET OR FACETIME — 45 MIN – CONTACT US AT: money@global.co.za

                

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Why does Low Cost and Generic Business Plans not fly?

 

Most Generic, Low Cost and Basic/Template type of Business Plans and Farming Plans do not fly because of the following:

  • They do not meet with  Investors/Banks criteria;
  • The overall quality is sub-standard and offer no real value;
  • The general lay-out and sequence of the topics are all messed up and do not follow a certain path;
  • Low cost Business Plans are usually a rushed job done in a few days, without proper consultation with a professional consultant;
  • Most available templates  are developed for the overseas (American) market and do not address important issues/problems experienced in South Africa;
  • Cheap and Generic Business Plans Writers only want to make easy and quick money and do not really have your interest at heart;
  • Some Low Cost Business Plan Writers do not have the expertise and background to explain the entire cumbersome funding process in detail and in particular how exactly the “Credit Act” works and what your rights are. They will rarely go the “extra mile”.

All serious “Entrepreneurs” should be aware and take notice of all the “pitfalls” of services/plans provided by so-called low cost Business Plan or Farming Plan Writers that are only looking after themselves and are not really having your interest at heart, not going the “extra mile” and only want to make a “quick buck” out of you. Before you appoint any consultant first check our guidelines of what to look for when you appoint a consultant, before you burn your fingers badly and eventually do not get the required funding because of poor and sloppy work.

A Business Plan is a highly structured document designed to sell financial institutions or investors on your financing proposal. It is structured to provide them with information in a familiar format so that the information they need to make a decision to loan you the money you need to start or expand your business is accessible. To ensure that you get full value for your money in the preparation of your business plan, you should ask the following questions before appointing a consultant:-

  1. Do they have the required qualifications?
  2. Do they have the ability and willingness to transfer skills and expertise?
  3. Do they have the required experience?
  4. Do they use “off the shelf” templates?
  5. Do they know exactly how the “credit act” works.
  6. Do they provide a “personal” service through the entire process or do they outsource some of their services?
  7. Can they help you in the marketing/sales areas as well?
  8. What financial expertise do they have and exactly what financial information will they include in the plan?
  9. How many plans did they write so far?
  10. How long have they been writing business plans?
  11. Do they explain the entire process upfront showing you all the “pitfalls”?
  12. Do they fully prepare you for your meeting in the pitching of your business plan?

It is vital for any entrepreneur to check out the above before committing or signing any contract/agreement and thereby avoid any unhappiness later. Some customers find out too late that they were taken for a ride. Don’t be one of them.

                  

                         

 

 

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