The F’ Word in Business — Lionesses of Africa

by Teboho Serotlo

Often in my line of business I come across lots and lots of small business owners who are looking for funding for their business. Clearly access to funding is one of the biggest challenges that small businesses are faced with. To begin with, I think the big question is, actually do you really need the funding? Have you looked at other options? What are these other options? 

Do you in fact need funding or can you start small? Once you have started small, it might be easier to then apply for funding at the expansion phase of the business when you already have a track record and some historical data to show to potential financiers. Of course, it is not all sectors of business where you can start small, for example if you are in manufacturing or mining, you require a lot of upfront capital to start with. It is also useful to remember that actually, funding costs money, unless it is grant funding. Funding also costs you time, because you must put a decent funding application together to increase the chances of successfully landing the funding. Remember also, time is money, so perhaps the amount of time you spend on applying for funding could be used to chase customers, instead. Some of the business owners I have come across also seem to be under the impression that funding is the silver bullet that will solve all their business problems.

There are several financiers out there, but of course they have their own terms and conditions for giving out loans and grants. I personally recall when I was growing up, my Dad used to get my siblings and I to motivate why we were asking for money and to report back on how we spent our pocket money. Therefore, I learnt from an early age that there are no free lunches. So, the financiers have every right to have their own terms and conditions in place before they can grant you that loan. However, sometimes we shoot ourselves in the foot by not complying with basic information. Example, a valid tax pin from the South African Revenue Services (SARS) – your business tax affairs need to be up to date, otherwise you are expecting a loan from a government agent that is “Big Daddy” SARS’s cousin, yet you are not paying your dues to SARS. Surely it cannot work that way. Secondly, you may be required to submit your latest reviewed/audited financial statements and management accounts, and this is sometimes if not most of the time, where some of the small businesses get stuck. The greatest weakness that I have picked up is that we do not have these financials. My last example is something as basic as having a business bank account. Some small businesses do not have a business account, they use their personal accounts for business. This is of course a no-no if you want to run your business professionally.  Keep your personal and business accounts separate.

So, it seems to me that while we cry about a lack of access to finance for our businesses, we could try sometimes to meet the financier halfway by ensuring that we have covered all the basics by being compliant and having the correct paperwork in place.

Have you thought about other options that exist, including your own savings, a soft loan from family and friends, Crowdfunding, selling some of your assets and entering challenges and competitions?

As basic as this may sound, I have learnt not to leave anything to chance, as I have come across some of these challenges in my interactions with micro and small business owners. The struggle is real. How do we educate and collaborate with one another to help us grow and participate in the mainstream economy? Are we going to be part of those who “admire” the access to funding challenge or are we going to be part of the solution by collaborating with financiers? I personally want to help by being part of the solution, whatever that looks like. I am ready to roll my sleeves up and look for sustainable solutions.