FEATURE ARTICLE
How to Finance Your Dream
Small bites of the big pie - So you are dreaming big and need some money and are
puzzled because no one believes in you?
So you want to build an empire and you've
decided that you need millions to do so,
but you don't have the money. The ques-
tion to ask yourself is "how do I achieve
my dream?"
The first step is convincing people that you
know what you are doing. This is the pri-
mary reason you write your business plan.
By writing this plan you should show that
you know everything about the business.
You submit an abbreviated version of your
plan to potential financiers, but some-
where you should have all the informa-
tion — and I mean all.
You also need to be able to pitch sufficient
information to potential financiers to grab
their interest as well as have a presenta-
tion that can engage them in the facts for
twenty minutes without boring them.
You also need to ensure that vou do not
"give away the baby with the bathwater"
as they could do it cheaper and with less
risk without you.
Some of the meetings may be seriously
rough, as financiers want people who are
in it for the long haul so they try and weed
out the faint of heart right in the begin-
ning. You have to ask yourself the ques-
tion: "just how- committed am I?"
Here are some of the questions you should
be asking yourself, and the questions that
investors need r e a l i s t i c answers for.
• How much business can you generate?
• How much turnover can vou generate?
• How much Profit can be made?
• What are the start-up costs?
• How soon can vou pav anv monev back?
10 www.saguides.co.za
Bv Gavin Tanks
• What happens it something goes wrong?
• Where and what is the profit centre of
your business? — the core part that is re-
sponsible for making money.
" What is the least amount of money you
need to begin trading?
• Why aren't you trading now? — Could
you be doing business from a garage or
the boot of your car to prove how pas-
sionate you arc about this business?
The business case
Not the idea, but the business vehicle
where the idea is turned into a function-
ing business.This is not how passionate you
are or how good you are.This is not about
your mother thinking you are the best so-
lution to all her problems. This is the cru-
cial nuts and bolts of the business, its work-
ings and day to day running.
• How your business generates a profit.
• The turnover you expect and why you
think it will generate this amount of
money.
•The reasons people will buy from you.
• Where is the real business and where are
the opportunities?
• What effort is required to access the op-
portunities and challenges you will face?
• What do you recommend you need to
get done to access the opportunities?
•Where are the benefits to investors if they
partner with you?
SA GUIDE TO BUSINESS OPPORTUNITIES VOL 8, # 2
• What happens it you do nothing?
• When will you start?
• How much money will be needed, and
how many people will it take, and how
much time will be required to deliver this
dream of yours and the solution that will
realise all of the benefits?
The business - how it will work.
Detailed flow charts of paper trails and
key staffing are required.You need to knov\
job functions and descriptions for all key
personel, as well as the flow of resources,
cash and credit in and out of the business,
daily, weekly, monthly and yearly for the
next five years.
You also need to know "what happens if"
and be able to show this scenario in a docu-
ment that is easy to follow and understand.
So, ask yourself, "what happens if":
a) I underachieve.
b) I achieve what I set out to.
c) I overachieve.
The key isYOU, and you need to know all
of these things as the person who will ul-
timately take responsibility for the inves-
tor's money. It's no good to say you will
employ a financial person if you don't
understand the financial implications of
the business. The money within the busi-
ness is the key to investor confidence -
and they want to know it is in good hands.
The buck stops with you. An investor may
add supporting staff or guidance in the
business as part of the deal, but if you don't
do the 'time', you won't see the 'shine'.
The big vision
* What is the lowest amount required to
begin trading?

• What is the break-even investment to
reach a return of income?
•What is in it for the investor?
• Where is his money being spent?
• What have vou contributed?
•What's left if YOU fail?
You should have a pencil, a calculator and
a computer spreadsheet. The sooner you
learn to use them and understand the
numbers game in business the quicker
someone will lend vou money. If you do
not see this as critical in your business you
are not serious enough to be a succeslul
entrepreneur. People need to know and
see you are prepared to trv and have a
grasp at what is happening to your dream
as it becomes a business.
Converting skeptics
Entrepreneurs are always on about how
no one takes their idea seriusly. The rea-
son is that most [around 90% of] entre-
preneurs want someone to lift them up
on a golden cushion.
They also feel that these same investors
should then feed them grapes and finally
pay them for the rest of their lives for an
idea. The sooner entrepreneurs get over
the fact that an idea is not a business, the
quicker we can move forward and develop
a stronger third economy.
By proving your idea is a viable business,
you can convert people to supporting your
business. Each time you convert a skeptic
to your cause you are closer to your goal.
You need to listen to what people say and
ask and reply in an articulate and sensible
manner. Practice and perfection of your
pitch comes with trial and error.
Interested people may wait a year before
acknowledging thev like your idea just to
make sure vou are in it for the long haul.
These people alreadv have business and do
not want to run yours because you got
tired along the wav.
Know your stuff
If you are producing something, go to a
factory and watch how it is done. Be aware
SA GUIDE TO BUSINESS OPPORTUNITIES VOL 8, # 2
of technical problems and ask a lot of peo-
ple questions. This can save millions of silly
school fee mistakes further on in the
projects development. People rush in to
get going and a little more research would
mean manv more really good ideas are still
around. Rushing is really expensive for a
company that has little resources.
Become an armchair expert at everything
in your business so people cannot pull the
wool over your eyes. Watch time and proc-
ess and go and see it being done in other
places. Ask questions and do not be afraid
to look stupid. Any questions are intelli-
gent if thev save you money.
Research your products on line, and know
where they are selling and who they are
being sold to.
If you cannot get a 'feel' and a 'handle' on
the business, someone is going to take it
from you. I have seen this happen far too
often not to have it in the top 3 'must do1
fists for succesful entrepreneur ship.
Do a very critical self analysis of yourself
and stop fooling yourself how clever you
are. Be honest about strengths and weak-
nesses . Ask friends and business colleagues
what they think your strengths and weak-
nesses are.Then find ways to shore up this
knowledge in yourself first, and then in
others you may need on your team.
Market research
This is very contentious as people go onto
the internet and download pages about
how big the market is and how much can
be made.
The questions to ask are:
• How much ot the exisitnig market can
you acquire?
• How big is the competition?
• How much business is in you area and
with your available resources can you re-
alistically:
A-Get
B - Service
C - Grow
D - Make a profit on
FEATURE ARTCLE
The business landscape
It is highly unlikely that your business idea
is so innovative and new that no one else
has thought of it yet. However, if in the
unlikely event this is true, than these fol-
lowing questions are important.
If your product is an innovation or adap-
tation of an existing need, then you also
need to answer them.
Why you? Why will people buy from you
and not someone else? If there are leaders
and multinationals in this trading space
why. are they not buying from them first?
Is your price competitive? Have you done
your research? If the product is so good
do you have advance orders? Who in the
market is so impressed with your innova-
tion that they are willing to buy into it im-
mediately with a commitment?
Orders are business tender, so if not, why
haven't you got orders for the product
based on the delivery potential of your
business? Don't tell me people are hold-
ing their breaths their entire lives for this
product and I don't see a queue of them
outside your door.
Legal considerations, product failure,
servicing clients. Show me the research
and how you intend to overcome these ob-
stacles and deliver on your promises at the
same time.
Marketing, how are you going to speak to
the people who want your product and at
what cost?
Answer these questions in a confident
manner and have a track record of sales,
or potential sales in your hands and it
should be a breeze to get finance.
In the current financial depression, the
success to failure rate is no different to
any other time at 50/50. So you need to
prove why it will be different for you and
that you will be one of the 20% who may
pull it off, against the 80% failure rate in
this country.
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