BUSINESSES need cash to get started and to keep afloat until they can generate enough income to keep going.
This is why funding is so critical to the survival of small businesses. Entrepreneurs often do not have the extra funds to survive the period between the launch and when there is a strong enough cash flow to keep the business running by itself.
Jenny Retief, CEO of Riversands Incubation Hub, the small business survival specialists, said that funding is important but it’s not always the magic answer many believe it is.
“Too often funds are used to support a fancy lifestyle and not the business. If you need funds to pay for cars and clothes, then you need to re-think your business ideas.
“Every new business should be focused on generating a regular customer base first.”
Jenny said that a business that starts well is excellent but getting too much money too quickly may lead to other problems.
She said too many businesses that started well later crashed because owners and operators became arrogant and assumed the income would always be good.
“It is important to know that while funding is needed, many businesses have succeeded on far less than you would expect.
“If you want to be an entrepreneur, start now. Work in an industry that interests you. Learn hard, work on your ideas and save up some capital.
“How do you want to start your business. It’s okay to start slowly on the side, as a part-time project and when it takes off, you can juggle the risks of leaving your job and changing your part-time gig into a full-time business.
“You don’t have to devote every second to it but do enough to keep it going. You can experiment with different ideas until you find the ones that benefit you.”
Jenny also said the people looking for funds need to show potential funders all the right documents. Investors need to see your business plans to evaluate their investment risk.
“It’s important to be honest because investors also run background checks and they will discover what you have hidden.”
