Raising working capital is probably the biggest obstacle many entrepreneur face in starting a business.
Working capital as we all know is the amount of liquid assets especially in cash or accessible as cash to run and grow your business. Start-up capital (which serves as working capital) should cover business expenses for at least one year or until the business can generate enough revenue to sustain itself.
The average Nigerian worker is an entrepreneur at heart but the major challenge facing them is that their current 9-to-5 job salary is not enough to meet most of their needs, talk more of it been enough to raise capital for their dream business.
It is probably tougher to be an entrepreneur at the start than work a 9-to-5 job. Keeping your current job will provide you with a steady source of income while you continue to work on your business.
You donâ€™t have to fire your boss yet, you can always use your current salary as your start-up capital for your dream business if only you know where to look for it.
It is not uncommon to see for example, a school teacher that knows how to sew or a banker that bakes, or a co-worker that sells recharge card and the list goes on. Every Nigerian worker has the mind to compliment their salary with one form of business or the other.
The first thing I always advice before thinking about raising capital is to determine a rough estimate of how much of a working capital that will be needed to start the business.
The rough estimate of the working capital should include the amount needed to pay for registering the business, purchasing of the equipment needed for the business, rent space, initial advertising and marketing, training, salaries, transport and logistics, virtually all other expenses that need to be covered until your business revenues will cover and exceed all expenses.
The second thing is to get training and mentorship in the area of business you are interested in, instead of investing your hard-earn capital into a business you have little or no experience in, it will be a very wise decision to get some training and mentorship from people who are already succeeding in that business.
We will be discussing on some areas to look at when raising capital for your business.
WAYS TO RAISE A CAPITAL FROM YOUR CURRENT JOB:
Start With Your Savings:
Personal savings is the first area to look at when trying to raise capital for your business especially for anyone who is presently in a paid employment.
If you are employed; you certainly earn an income from the salaries. Saving a reasonable part of any money you receive is a good start to raising the capital you need for your dream business.
Weâ€™d recommend setting up a money market account with the sole financial goal of funding your business idea. Deposit apart of your salary every month into the account and leave it to grow with interest.
Family and Friends:
Raising capital from friends and family members is another area you can raise capital for your business. If you have gathered your savings and find you still need more money, these people are the next best source of capital for your business.
One advantage of raising capital through friends and family is that they already like and care about you and want you to succeed.
For most young entrepreneurs, the first investors to take interest in your big ideas will be your parents, family and close friends. So take advantage of this source of funding for your business
Get Advance Funding from Customers:
This is one of the few ways of starting or running a business with zero capital. Customers with an urgent need for a product or service are often willing to pay part or full price for the product in advance.
This upfront payment usually provide you with the capital you need to produce the product or service, get it delivered to the customer and still make nice profit.
This method of raising capital usually works best for business that do not require any capital investment to start up. If you donâ€™t require any capital to get an office space, buy equipment, then you can really start a business from scratch using advance funding from customer.
Find a Partner Whoâ€™s Got the Cash:
This is another major area of raising capital for your business, find someone that believes in your dream and has the cash to help bring that dream to reality and partner with him or her.
Most times, having a great idea isnâ€™t all it takes to start a business. You may have a brilliant business idea, technical skills or brain power to build an amazing product but you still need a partner who has money that you need to make the product and sell it to the market.
When you have a profitable business idea and find a partner who can contribute the capital, both of you bring something to the table and can share ownership of the business. Itâ€™s a win-win situation for both of you.
Sell of Some Personal Asset:
If you have gadgets, a second car, or other valuables, you should consider selling them to raise more money for your business. This is also another area where you can raise capital for your business. There is no need holding fast to assets that can yield the required funds to start your dream; currently the items are not in use and they are not bringing in cash, it is better to sell and raise the needed capital.
Capital is available to everyone if only you know where to look. You can start that dream business today; just dare to believe in yourself and start.
Olodu keonyedi â€“ is a trained engineer and by passion and personal development a public/motivational speaker, a business coach and human capacity developer, he has a B.Eng degree in Civil Engineering from the University of Nigeria Nsukka, he is a member of Nigeria Society of Engineer and a COREN registered Engineer.
Email: firstname.lastname@example.org Tel: 08037489704, www.instagram.com/sir_keon. www.facebook.com/olodu keonyedi_mentorship