Page 14 - MIND YOUR ASSET

ANTHONY KAIRUZ

STEP 3: RAISING CAPITAL FOR YOUR BUSINESS

Raising funds is one of the most challenging tasks of starting a new business.

When you apply for finance at the bank, it will be in your favour that your CV shows you have the
experience to back up your business.

When raising capital for your business, it is critical to ask for sufficient funds to succeed. Cash
Flow Is King.

Too little capital is a fundamental reason why businesses fail.

 How much capital do I need?

Start-up capital should cover all leases, equipment and supplies, as well as at least six months’
worth of projected operating costs, including the owner’s salary.

Business Plan
It is crucial to draft a detailed and thorough business plan that recognizes “where you are today,
where you want to be tomorrow, what problems might arise and how you are going to resolve
them”.

A complete plan identifies and quantifies the capital that is likely to be required to reach break-
even and beyond.

Executing a plan means:

 You will get a better understanding of your market and the competitors you will face.
 You may avoid costly and disastrous mistakes in the future.
The quality and extensiveness of your business plan is key in obtaining capital from bankers and
potential investors.

 How do I raise new capital?

Entrepreneurs usually seek capital from:

 Private institutions such as commercial and investment banks
 Investor groups that want to help their local economy grow
 Venture Capital Funds
 Groups established by private investors to exploit such opportunities
 Wealthy individuals

 Crowdfunding

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