My name is Themba Mkandla from South Africa. I help startup entrepreneurs access small business capital to grow their businesses. New entrepreneurs generally do not understand how capital markets work. They believe that they can simply prepare a business plan and use it as a ticket to securing business finance. I was pretty much the same as well when I came into business. I learned the hard way a few months down the road when my finance application got the ‘not approved’ response. The reason given was my business plan did not provide substantive proof of a market. That’s bad news for anyone. It was devastating for me. I vowed from that day that no one should have to go through this, if I can help it!
What early stage entrepreneurs need to know is that a business plan can stand the scrutiny of funders only if it shows that the business has customers. Funders require proof that the product or service that you are going to sell has real people waiting to buy. Yes you can claim in your business plan so and so is going to buy because your product is superior in this and that. You can even claim the market is worth so many millions and your product is going to capture some share of that market. You may be right about the size of the market. What is doubtful about your claim is that part of that market will prefer your product to that of competition.
I am going to use my blog to teach wannabe entrepreneurs what they need to do improve their chances of getting funded. I am going to use this blog to show new entrepreneurs how to build their businesses from the ground up, one brick at a time, so that they improve their chances of getting funded. I am going to help new entrepreneurs realise that while compliance issues are important, they should not be the first thing they do when they start their businesses. What’s the use of spending a thousand rand registering a business that may not even make it from the starting line? That money can be better spent on building a product that customers will love. Only then can entrepreneurs register their businesses and comply with other laws that govern businesses.
I derive my knowledge mainly from the lean startup movement. The movement has successfully adopted for building small businesses lean manufacturing principles that were made popular by companies such as Toyota. New entrepreneurs can now build their businesses with minimum waste. They are able to quickly test their business ideas and to make the all-important go/no go decision before wasting lots of time and money on a business that is a dud. It is these lean startup principles that I use to help new entrepreneurs to start and grow their businesses with minimal resources. Only when they have shown that they have something that works, do we proceed to the next step, which is development of bankable business plans to access capital. Before that happens, we don’t have much to show and therefore we do not really need outside capital.