So, today, I mentioned two important things about financing a business idea. I mentioned Crowd funding and Reputational Capital. I still stand by my words. Please, don’t take a loan. Its too risky.
Before you even start a business, you should have a good business plan which has a financial plan in it. You should have an idea of how much will cost you to set up and run that business. Also factor in the fact that you might not make profit for the next two years.
When you have a figure, then we can work.
But, listen. Since we are not taking loans, and we don’t have one huge money somewhere to start up with, we need to understand how to make our capital lean.
Strip that ampunt you have on paper to your barest minimum. There are many things you might not need at the initial stage, but, you’ll be thinking they are critical. My brother, let the Ijebu in you come out.
You might not need to rent an office space at the beginning. Yes, you might not need exccesive branding. Those t-shirts you want to print, you can chill on it for now. Just go for the basics. One basic thing every small business needs now is a website and social media platforms. These wouldnt cost you an arm and a leg. With these two things, if you have a very creative mindset, you can begin to run a business and gradually, you’ve blown.
Believe me. That’s how I started. I didn’t even have a website. I finally got a website two years after I started my first company. I started off with my Facebook page.
My point here is simple. Reduce your capital to the barest minimum. I see some people tell me that they need N500k to start up their business. I just laugh at them. Who will give you that sum of money? In this Nigeria? No one.
So. Now, once you’ve gotten a sensible amoint of money to startup, this is where you can now crowdfund.
Do a list of family and friends. Break down the money into smaller bits. To get N100k, get twenty people to give you N5k.
Now, before you even begin to crowdfund, lemme warn you. No one wants to throw money away. This is where Reputational Capital comes into play. Some of you have never run any business before, never managed or handled anything before, even the smallest thing, yet, you get angry when one uncle doesn’t give you money to start a business.
You’ve not even proven to anyone before that you’re serious in life. There’s no day you’ve every woken up before 6am. Your normal waking time is 10am. Yet, because everyone is talking about entrepreneurship, you decided to start a business. Now, you want your family members to support you. I laugh in pidgin.
That’s why its called Reputational Capital. Your reputation matters too. If you ask me for money for your business. I’m sorry, I might refuse. I’m a businesssman. We are the stingiest people on earth. We don’t waste money.
So, ladies and gentlemen. As my village people say, ‘a word is enough for the wise’.