Take advantage of Govt’s empowerment crusade

with a call for all Zimbabweans to get on board.
While for some it does not require a rallying call to get started, as they have it in their blood, others naturally are laggards and may actually be the very last to heed the call.
As I pointed out last week, there is so much that we can do, be it in the public or private sectors.
The starting point, as I have often pointed out, is to find something to do for which you are passionate about and once you have identified the area, you then start looking for a window.
When you find the window, look for an opening and gear yourself for entry before the window is shut. You may ask how do I enter when I don’t have the capital? That’s some challenge for real.
Not so, if you ask me, there are many options available and all depends on your situation. Banks are a straightforward source of funds.
Many offer small-business loans if you have already started your business. A comprehensive business plan and perhaps a personal guarantee is required to secure the loan.
Of late, barring the liquidity constraints prevailing, most banks have been forthcoming with loans and there seems to be a deliberate thrust to help the small and medium enterprises sector.
The bankers need assurance that you can generate enough cash to cover loan payments. A colleague of mine once observed that the banks are now seemingly desperate for clients but for professional reasons I prefer to reserve my comments on that one.
The Government through various agencies including the Small Enterprises Development Corporation and other ministries has also come to the party and offers loans for various projects.
There is the Youth Fund through the Ministry of Youth Development, Indigenisation and Empowerment while Minister Sithembiso Nyoni has also been facilitating funding under her SMEs and Co-operative Development arm. What is key in all these approaches is the requisite paperwork.
CBZ Bank has come out tops is supporting SMEs as it works closely with Government in facilitating finance for various initiatives to empower the local populace. This is a fact and there are records to show their commitment. Well done guys.
Entrepreneurs can also raise funds from friends and family. It is, however, important to treat these investors as real business relationships. You will also have to demonstrate how you will use the money and how you will repay it. In some cases you will have to pay interest over time and it all depends on what you would have agreed upon.
Others will issue stock and return the investment through an IPO or acquisition. Issuing stock, however, is complicated as you may need a prospectus and register the firm on the Zimbabwe Stock Exchange, but that depends on how much you are raising. While listing may not quickly come to mind, it is an option that a serious entrepreneur may have to consider as the business grows.
It is often said that finding friends and family who will invest in your start-up business is straightforward. All you need to do is start calling. You will be after high-net-worth investors who take personal referrals seriously and the best way to find them is through personal networking. Suppliers and customers may also back you. If your product complements a supplier’s, they might invest, for example, if you supply quality chickens to a local supermarket, the owners might want to invest.
You have to be careful though, taking money from a supplier may prevent you from using that supplier’s competitors.
Strategic investors get their return in many forms and this may be through increased sales of their own products, stock sale of your company, advertising through your distribution channels, etc.
These arrangements are rarely made just for a cash return, so the payback can take many forms.
Whichever sources you choose, decide in advance how much money you want from them and how you intend to repay it. It is key for the prosperity of your business to be realistic. Stories are told about some entrepreneurs who make up a story to get the money, only to be surprised four years later when the investors start demanding a return.
Professional investors rarely walk away from an investment, so if you write the proposal knowing how you will provide the return, you are much more likely to reach a happy ending. And more importantly the business will flourish, as it will be anchored on honesty. That way you can’t go wrong.
Without sounding like an activist, it is prudent upon all Zimbabwean entrepreneurs to rise to the occasion and make use of the opportunities that the Government is presenting under the indigenisation and empowerment window if only for the next generation. History will judge us harshly if we fail to enrich ourselves and release ourselves from the trappings of poverty.
As always, let’s make money.
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