Top 5 tips to increase your chances of getting business funding:
- Find ways to lower your budget.
Focus on financing only the key resources and activities that your business depend on.
For example: If you’re a graphic designer, prioritize funding to buy the latest design software and computer, and take office furniture off the list.
2. Gain traction first
Funders need proof of market and also they want to know they can trust you to execute.
So, take initiative and spend the first 1-2 years focused solely on gaining customer traction and building your brand.
Examples: Build a website, execute brand activation activities, build your social media following, get Letters of Intents, Attend trade fairs in your line of business to build relationships, take up a course to upskill yourself. Etc.
3. Business model innovation
Do not be just a graphic designer down the street. Come with something new. Improve on the typical value added services in tour line of business. Offer the service differently. Find ways to leverage on one craft. Have a 360 ° look on your value proposition. Criticize it. Break it down. Put it back together. Paint it. Heat it. etc. All these to make it an irresistible value proposition even in the eyes of an investor.
4. Do not be a beggar. Desperation is not seductive.
When you show up from a point of disadvantage, you’ll be treated as such.
Being young, black, woman, etc is not a competitive advantage. BBBEE policy is an enabler, not your sustainable competitive advantage.
Do not sell you being young, black, disabled, etc. or any marginalized category, sell the value.
Show up as someone who understands what they’re doing, and determined to make it (with or without you).
Do not beg. When you beg you give up your power and you’ll fall trap of bribes/corrupt activities. And it is emotionally draining.
Vibrate at high frequencies. Yes you really need their help, however make them buy the value (sometimes it is your character). Desperation is not seductive.
5. Be realistic
You cannot say you want R100 000 for a business that needs R40 000.
You cannot say you will make R1mil in an industry where top players are making R500 000.
Do your homework. Numbers are good but they can throw you off.
I hope this helps you to get funding.