One of the hardest parts of a business is experienced at the start of the business and it has to do with finances. To make it clearer: SME means (Small and Medium-sized Enterprise). Many businesses have closed down even before they started because of either lack of finances (startup capital) or misappropriation of the same. Here, let us quickly look at ways to bail out a business in relation to startup capital. That is, how to go about raising the required funds for starting a business.
1. From what you've saved
There is a saying in the Southeastern part of Nigeria that explains that "the quickest helping hand is the one on your shoulders - that is your own hand." This also applies in the area of raising funds for your business. Before other external financial helps may come through, there is a need to get started with what you have. This can be from the ones you have saved up.
Most times, some people that want to help you with finances only want to see you get started so as to be sure of the business. This is why you need to start up something from where you are and with the savings you already have with you, then you will be surprised how more helps will be made available for you in the course of taking steps. Waiting to have the full financial support from external sources before you start will delay your starting.
2. Friendly assistance from friends and family
In case where the personal savings become limited or when they are not enough, there is a need to seek for external source. Most times, the closest people to you (people within your circle - your friends and family, the people who believe in you), will be the quickest people you can run to for assistance. This can come in form of loans or grants.
A few weeks back, a friend of mine started a mini importation business. Before then, he was complaining of funds and how to raise them. I discussed with him about it and after he made a list of the funds he needed, I asked him to split them into 20 places. After that, I told him to go through his contacts and make a list of 40 of his friends and communicate with them about how to help him raise the fund. Amazingly, by the time he got to the 35th friend, he already got 20 positive responses and the money was raised.
However, when you raise money from friends and family through loan, try to keep to your words and to the payment agreement. This is to prevent lack of trust, so as not to block future helps. You should also know that your friend's help is not a right but a privilege, so it should be treated as such.
3. Using a loan facility
In this part of the world, there are specialized loan facilities for various categories of SMEs that entrepreneurs can access, and some of them have very minimal interest. Like the Agro-alliance that support people going into agricultural related SMEs.
More so, some micro-finance banks can be of great value because of their accessibility, availability and low interest rate. In addition to this, some government provisions can come in handy here - in form of grants. All these are ways in which funds can be effectively raised for an SME.
Thanks for reading
