A number of reasons have been adduced to why many Nigerian start-up businesses and entrepreneurs do not get required funding to grow their businesses. Making this known was Mr Akinwande Ademosu, the Chief Operating Officer (C.O.O) at Credit Direct Ltd/FCMB PLC.
Speaking at a recent Daystar Business Forum Mr Ademosu said: “The reason why businesses don’t get funding because they don’t know where to look for the “right” source of funds.” He proved his point by listing other factors.
“They don’t know how to pre-qualify before applying for loans; they don’t know how to successfully present their request; and some don’t know they will hear NO for “missing just one thing.” Also, many don’t know that a good system enhances their chances, thus they never take the time to build a good business credit rating. Worse still, some don’t separate their personal credit from their business credit.”
He encourage entrepreneurs to jettison the myth of “I don’t have anything to offer,” by refocusing their energies on what is possible. He wants them to understand that they are their dream’s biggest investor if they considered their sweat equity.
“Investors must be convinced that you have issued the biggest cheque. Your cheque must be big enough to secure their investment in you. You must willing to risk it all because if you don’t believe, neither will anyone else.
To be successful at securing funding, Mr Ademosu enjoined entrepreneurs to study and understand the criteria for different funding sources before they apply.
“Know exactly what your request application must contain and what it doesn’t have to. You must also build a good business credit rating with all your transaction and keep evidences.”
He also emphasised the need to master the magic numbers, i.e. gross margin. Entrepreneurs will fare better by knowing the COGS (cost of good/service) and keeping track of monthly sales and gross margin (gross profit as a % of sales) by hand.
“Numbers run businesses because they tell you how to make money with least time and effort,” he concluded.