Get The Money You Need To Build A Business & Keep It

by Pavlo Phitidis

Starting your business is hard, but growing it can be far more difficult. One of the most important elements attached to the process of growing your business lies within negotiating deals. Television programmes like Shark Tank and Dragon’s Den have put the art of making deals into the limelight, as investors ask for equity from entrepreneurs, in exchange for injecting their skills and financial resources into a fledgling business. But how can you fund the growth of your business without giving away too much equity? Here’s how to get funding for your business or project.

How do "deal make" your funding to build the business you want

There is more money available than there are ideas

Money chases good opportunities, so it’s important that you ensure your business creates those opportunities. Look at your business in the same way an investor would, as an objective perspective will help you to create an attractive investment opportunity. A good business opportunity for an investor is: where a good return can be made and maximised, with minimised risk. 

Find Your Customer First

Entrepreneurs often make the mistake of trying to attract funding, before they attract their first customer. If you believe that the service or product your business provides has true market potential, find the customer first. If you can’t find a customer, you’re in the wrong business. 

Fund Using Suppliers and Customers

Once found, your ability to service that first customer will rest upon negotiating and creating relationships of trust. For example, offering your suppliers a cut of your profit, in exchange for good payment terms, creates a great relationship, whilst offering your first customer a discount for a deposit paid before delivery, is a deal maker’s way of funding your first few transactions. 

An Angel Investor

Once you start attracting repeat business and/or processing large orders, you may need a boost of capital to help you service your customer demand. An Angel Investor will give you a small amount of money (usually less than a million Rand) to fulfil your customers’ needs, while growing your business. There may be some significant terms and conditions attached to this investment though, and this where your keen negotiation skills will come to the fore – you need to make the smart deal, rather than the desperate deal. Commit to achieving certain milestones with the investor, which will see their return grow, and offers you the opportunity to buy back equity.  

Accelerating Towards Profit

Expanding beyond your first phase of growth may require you to look for further funding. This is when you can blend debt and equity fund sources to reduce your overall cost of funding. If you have momentum, cash flow and evidence that your business is growing, you can negotiate reasonable terms for servicing your debt, rather than offering equity in exchange for creating further debt. 

Try Not to Grow Too Quickly

The most beautiful, yet dangerous, business dilemma is one where your customer demand has outstripped your business’ ability to deliver. Your business is ‘bankable’ and you’re fully capable of servicing debt, so it may be time to shop around for a business loan, from a bank or financial institution. Beyond that, look towards slowing down your business’ growth a little, and focus on attracting two rounds of investment, possibly a year or two apart. The first tranche will help you to grow, while the second helps you get the price of that funding down allowing you to hold on to as much equity as possible.

Listen in to the podcast below on what and how faith deals are made. They are powerful and beyond anything that a business school can ever teach. You need to believe in yourself, the business and operate with great integrity to get them right!

Take Action

You’re keen to build a successful entrepreneurial business that creates investment opportunities – Aurik can help. We work with you build your business into an Asset of Value. This is a business that will generate the future wealth you deserve for the risk, time and effort you invest. Sounds right? Contact us today and let’s turn talk into walk!

Big Questions from Business Owners Like You
The Money Show Growing business value Growing Business Systems

Big Questions from Business Owners Like You

On The Money Show with Bruce Whitfield, Pavlo Phitidis set out to answer some big questions from business owners, like you:

Read more

Small Business Financing: To Debt, or Not to Debt?
Business Opportunities The Money Show Business Growth

Small Business Financing: To Debt, or Not to Debt?

Finding the right small business financing solution for your growing business is critical. Is going into debt the right option...

Read more

How to Protect Your Margins & Grow Your Business in a Cost Inflationary Environment
The Money Show Accelerating Growth Business Growth

How to Protect Your Margins & Grow Your Business in a Cost Inflationary Environment

Everyone is beginning to feel the pressure of an increase in VAT, petrol levy, and other price increases. Rising costs will...

Read more

The Key Components of Collaboration
The Money Show Building your Business Business partnership

The Key Components of Collaboration

While we’ve been looking to fill 13 positions within our company, Pavlo has also been dealing with several international...

Read more

How to Present Yourself Online
The Money Show Building your Business Strategy Online business

How to Present Yourself Online

How you present yourself online is an all-important component for your personal, and business, brand. On this week’s The...

Read more

Business Accelerator 2018
The Money Show Business Development Building your Business

Business Accelerator 2018

Business accelerator programmes can be great catalysts for your growing business. Getting the right kind of help as a business...

Read more

How to get the right headspace to survive and thrive in tech-driven opportunities and change in your business
The Money Show Building your Business Business Growth

How to get the right headspace to survive and thrive in tech-driven opportunities and change in your business

Increasingly, technology plays a deeper and more pervasive role in business, and in our lives. Importantly, technology that...

Read more

Building the future we want as business owners in SA
Business Opportunities In the News Positioning your Business

Building the future we want as business owners in SA

South African entrepreneurs can play a big role in bringing the promises made during this year’s State of the Nation Address...

Read more

Kushesh Express, achieving rapid growth in a competitive environment
Growing business value Asset of Value Building your Business

Kushesh Express, achieving rapid growth in a competitive environment

Kushesh loosely translates to “very quick” and is a fitting name for courier company Kushesh Trading, which services the...

Read more

Innovation and Entrepreneurship
Blog In the News The Money Show Innovation

Innovation and Entrepreneurship

I recently hosted an innovation workshop for more than 100 franchisees and a franchisor of a well-established, successful...

Read more

Small Business Venture Capital Investments: What You Should Know
The Money Show Growing business value Building your Business Business Systems

Small Business Venture Capital Investments: What You Should Know

Section 12J investment funds are an attractive option for investors. When first created during the mid-1990s as part of the...

Read more

Build Your Business with these 5 Habits
AoV Mindset The Money Show Asset of Value Building your Business

Build Your Business with these 5 Habits

Welcome to 2018! A whole year ahead, to plan, implement, and prosper. I hope you had a great break, and were able to gain...

Read more

What Entrepreneurial Opportunities Await in 2018?
In the News The Money Show Growing Strategy

What Entrepreneurial Opportunities Await in 2018?

The tumultuous events of 2017 have already shaped the entrepreneurial opportunities for 2018. The innovators respond first,...

Read more

Start your Strategic Planning for 2018
The Money Show Growing business value Business Strategy Business Growth Strategic Planning

Start your Strategic Planning for 2018

2017 has been a rough year, for everyone. At every level, corruption has put paid to so much, and the dismal economic growth...

Read more

How to write the right kind of business plan
Business Opportunities The Money Show Business Systems Business Growth Business Plan

How to write the right kind of business plan

I’ve recently read through oodles of business plans, with a sample of ten showing me that: 4 were applying for growth funding;...

Read more

A Succession Planning Strategy for Your Business
The Money Show Succession Business Exit Business Succession

A Succession Planning Strategy for Your Business

The resignation of Robert Mugabe and the current race for power within the ANC have highlighted the importance of succession...

Read more

Critical strategies to future-proof your business
Growing business value Business Development Growing Focus Business Growth

Critical strategies to future-proof your business

Even for established businesses, it’s not easy to make sure that you will be ready for whatever might happen in the future....

Read more

How to start a business (or your career) from nothing
The Money Show Creating Time Growing Goals

How to start a business (or your career) from nothing

My recent meetings with people across the country have revealed that we have so much human potential, and yet such low morale....

Read more

Learning Resilience, to Build your Business during Tough Times
The Money Show Growing business value Building your Business Growing Accelerating Growth

Learning Resilience, to Build your Business during Tough Times

Simply reading the news headlines can be downright distressing, and government’s lack of adequate response towards corruption...

Read more

How to build your Business into an Asset of Value that is ripe for selling
Growing business value Asset of Value Sales Accelerating Growth

How to build your Business into an Asset of Value that is ripe for selling

Every business owner should be concerned about whether they will be able to sell their business for a good return when they’re...

Read more

What to do when you’ve made the wrong investment for business growth
In the News The Money Show Growing Strategy Accelerating Growth

What to do when you’ve made the wrong investment for business growth

Earlier this week, the South African Minister of Finance presented the Medium-term Budget, and the news was somewhat disheartening....

Read more

Get with the Aurik programme to ensure company growth
Growing business value Business Development Building your Business Company growth

Get with the Aurik programme to ensure company growth

Business owners are bracing themselves for tough economic times with SA’s downgrade to junk status and a gradual economic...

Read more

From a small family-owned business to an internationally recognised operation
Case Studies Business Development Family Business

From a small family-owned business to an internationally recognised operation

How did Liquid Movers quadruple their baseline turnover? The family-owned business joined the Aurik programme to grow its...

Read more

Delegate, you must: if you want to sell your business one day
Asset of Value Sales Business Exit

Delegate, you must: if you want to sell your business one day

Despite what you may think or feel, doing it on your own won’t set you on a pathway to success. You can’t build a business...

Read more