Table of Contents
- Register Your Business.
- Open a Business Bank Account
- Acquire The Services of a Competent Financial Manager/Advisory
- Prepare a Pitch/Proposal
- Apply for Funding
Funding remains the lifeblood of every business in Nigeria, especially at the start-up stage. Without adequate funding, businesses would not be able to acquire data or raw materials, process them, market them, and even pay their employees.
As against the former norm, where commercial banks largely provided access to funding, more financial institutions like; private equity firms, capital firms, crowdfunding platforms and fintech have emerged to give businesses and entrepreneurs a variety of funding options. This goes to show how the financial industry in Nigeria has developed over time.
Despite these available options, many SME’s still find it difficult to raise funds to bring their beautiful business ideas to life or even sustain the one they have. This is largely due to a lack of proper information and sometimes tough loan requirements.
Therefore, let us take a look at some tips that would help you raise capital for your small business in this article.
Register Your Business.
As much as this article refers to already started businesses, it would be wrong of us to assume that all start-ups are registered already. Some businesses miss out on loans and other funding opportunities simply because they are not yet registered with the Corporate Affairs Commission(CAC). It is imperative you register your business with the CAC as this will give you an edge in raising capital for your business through loans, grants and other funding options in Nigeria.
Open a Business Bank Account
Despite the numerous policies put in place by the Nigerian Government and business-friendly accounts operated by commercial banks, some start-ups still use a personal account to run their businesses transactions, most of them do this to evade tax payments. Failure to use a business account for your business will amount to meddling up personal money with business money, it could also put you at a disadvantage when applying for funds of any type. Most commercial banks and other financial institutions are not likely to credit a personal account for ‘business funding purposes’. It is advised that you open a business bank account to help you raise capital for your business.
Acquire The Services of a Competent Financial Manager/Advisory
A financial manager generally oversee the financial health of an organization and help ensure it’s continued viability. They supervise important functions, such as monitoring cash flow, determining profitability, managing expenses, advising on healthy loans for capital and producing accurate financial information.
As a business seeking capital, it is overwhelming to make yourself a jack of all trades, allocate your financial responsibility to a financial manager as this is a very vital key to the financial sustainability of your business. A financial manager will advise you on the right funding to apply for and the necessary paper works you will need. At BlackCOD Asset Management, this is one of our fortes. You can reach out to us and be certain to get excellent financial advisory for your business.
Prepare a Pitch/Proposal
A pitch/proposal is a small document about your business that gives investors/banks/funders an insight into your business. When preparing a pitch/proposal ensure that it is convincing, highlight the social impact of your business, indicate how innovative and viable your business is and most importantly, show proof of a good cash flow from the business to convince the financier that you can pay back. It should be noted that some financiers will request for a collateral, adding this to your proposal will give you an added advantage.
Apply for Funding
The last tip on our list is the actual step for small businesses seeking to raise capital. Once you have had help from your financial manager/advisory on the type of funding your business needs, whether debt, equity, hybrid or grant, you can start sending out your proposals to financial institutions to apply for funds but ensure you tailor each proposal to each financial institution appropriately. If properly done, you can have multiple opportunities to choose from to help you raise capital for your business.
cc: onlinedegrees, Nairametrics
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