Whenever people decide to embark on the journey towards entrepreneurship, one challenge which always seems to weigh them down is lack of funds.
This challenge quite often stalls mental creativity.
Let’s remove that barrier by addressing a few ways to raise funds for a start-up
Start with what you have
One thing every investor you approach will ask or will want to know is how much have you put into your vision?
You can start with what you have, and where you are. Save as much as you can and do
something with it. Then you can consider getting financial support from potential investors.
Ask your family and friends
Pitch your business idea to four family and close friends. Make sure you start with someone you can trust with your idea. Get them to commit to your business idea/vision. If you can’t win them over, it will be very hard to convince strangers to invest in your business.
People usually don’t invest in businesses solely because of the ideas behind them. They invest in the brand’s profitability and integrity. Make sure your pitch has figures and information that prove you are worth their investment; that they can get their funds with interest after the accepted period.
Partner with a Bank/Financial institution
If you must approach a bank to be your financial partner, make sure they have the solutions you need. Every bank has propositions of what they can do for you based on your business type
Look for partnership offers like free or discounted offers, online platforms for e-commerce, available relationship managers i.e. people who can give you business advice that can propel your business forward. Choose institutions that know what they are doing and have been recognized by other bodies in their field for what they do. Avoid partnering with a financial institution with unfriendly terms and policies.
Seek Government assistance
There are government policies, agencies and parastatals whose job it is to make funds available for start-ups. Examples include YouWin
, among a host of others.
Access information that will let you know if you qualify for certain government assistance; you can visit places like Lagos Chamber of Commerce and Industry
for such information.
Sometimes you can only get access to funds from the government if you meet certain criteria or if your business belongs to certain categories (not all businesses are SMEs). For instance, micro finance banks attend to the needs of micro enterprises (i.e. companies with N1 – N1million as capital base, minus cost of land and building with only 1 – 9 employees).
On the other hand, Bank of Industry
and other programs by the Central Bank of Nigeria encourage SMEs (i.e. small enterprises are companies with 10 – 45 employees and a capital base of 10 to 100 million naira; medium enterprises have 46 – 500 employees with a capital base of 100 million too 1 billion naira).
Remember, the key to accessing the funds you need lie in your ability to pitch your business idea so that it is considered profitable
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This article was first published on 26th February 2018