Entrepreneurs' Weekly Update – 11 October 2021
Winning with Money
Whether you prepare a business plan a business case or idea, it will inevitably have a bottom line. It doesn’t matter what you are dealing in, you will always need to calculate the cost—the numbers—in order to emerge as a winner.
When it comes to starting a business, I always say that your idea does not matter until you start implementing it. The best way to start a business—that will fast-track you—is to actually know how numbers work.
Learn how money works because once you understand the bottom line, you can then take it back to any business idea that you plan to implement. Here are some great reads for you to build your knowledge on money matters:
The Essential Finance Handbook for Entrepreneurs by author Precious Mvulane, offers seven systematic steps to setting up and managing your business finances, enabling you to set the foundation for success.
This handbook helps to provide that understanding and is aimed at entrepreneurs and owners of start-ups who are not clear about the financial side of running a business, or who perhaps have no idea where to even begin. Available on www.publisher.co.za
The Apprentice Billionaire's Guide to: CASHFLOW by author Brad Sugars will help you learn some proven and tested ways to grow cash flow and maintain a healthy cash position. This book gives you more than 200 strategies to make more money.
Brad Sugars, is the founder of ActionCOACH Business Coaching, self-made multimillionaire, and entrepreneurial expert shows you how to boost cash flow to your bottom line and his simple yet powerful lessons fit any business. Available on www.takealot.com
What I’ve seen in my experience is that small business owners (especially start-ups looking for finances) walk into the bank with folded arms, zero data, and no financial statements and when they are denied finance they take it personally and start blaming factors like their skin colour or apartheid. That is simply not accurate nor truthful. So let’s always adopt the stance of Truth when it comes to finances. Once we do that and follow the right procedures and protocols of financial institutions, then only can we examine whether an exclusion is a result of discrimination based on any biases. The only people who have arguments of substance—as it pertains to this—are people who have followed the rules of the financial institution/s.
As a Coach, I would like to take this opportunity to role-play and hereby ask you the right questions, before you even approach a financial institution to ask for funding:
Do you know what you want funding for?
Do you have the right numbers for the funding – do you know how much you need and how much you are going to make?
Do you know your profit?
Do you know how long it will take to pay the money back?
How do you put a guarantee into all of these things?
How does money work, do you know the rules of financial institutions?
Do you understand the criteria financial institutions use or the documents they require from you?
Are you also aware that your financial behavior could either work to your benefit or your detriment?
Do you understand the data and do you have the data that they are asking for?
So, my rule is this – if you want funding, go to who you’re going to ask funding from, get the full criteria, lay it all out in front of you and then prepare each and everything they are asking, in other words, follow the protocol.
For example, you have a business and you want to buy a property with your business. If the bank is going to ask you for 3 years’ worth of audited financial statements or 6-12 months of management statements of your business, then the conclusion is that the only time you are eligible to make a purchase is in three years’ time.
The biggest problem you may face as SMME owners is that you want to purchase when you are in a financial crisis, you want things that are instantaneous or when you are in emergency situations. These are the reasons that contribute to being declined by financial institutions – because there is not enough accumulation of what the bank needs.
I advise you to:
1. Always schedule your purchases in advance
2. Prepare in advance
3. Know the criteria and rules
4. Submit everything exactly how it is requested
Follow these guidelines and see if you get financed or not. I can almost guarantee that people who follow the system get the results they want, regardless of the colour of their skin.
My aim is to cultivate a winning mindset in you, as an entrepreneur. Being a winner has nothing to do with the colour of your skin. You win because you know the rules of the game and how to play the game. Others may have bigger wins, but stay in your lane and focus on your wins.
"Financial freedom is a mental, emotional and educational process." – Robert Kiyosaki
ActionCOACH Thabo Pitse