One of the main problems that most businesses face is accessing finance. This is especially the case with Small and Medium Enterprises (SMEs) across different sectors. Why is it hard for most SMEs in Zambia to access funding? Let me share some tips on how you can make your business ready to attract funding, however remember you are a business and not an NGO hence your core business is making money not fund raising through donations and grants. These tips will be beneficial to you as a business whether or not you are fund raising.
1. Have a written business plan
While most businesses will be busy looking at getting funds to invest in their businesses, very few businesses have any business plan that is written. That is not to say that the businesses lack plans but rather, the plans are in the head of the owner or the manager and nothing is put on paper. It is important that you have a written business plan that shows the short, medium and long-term goals of the business. This will make it easy for you to respond to opportunities as they come up.
2. Sort out your financial records
Having accurate and up to date financial records will always give an edge to every business when competing for funds. Any investor, banker or donor wants to be sure that the money they lent or provide as a grant will be in safe and competent hands. Having proper financial records should not only be seen as a prerequisite of getting external funding but this will help you as a business to analyse and plan your business well. It is unfortunate that some businesses start sorting out their financial records when they are asked by a potential investor or a financier. Good business practice requires that you have accurate up to date financial records. The records are more acceptable and convincing when they have been certified by an independent and registered auditor.
3. Have a well elaborated structure
It is important that as an established business, your organisational structure is well elaborated and the qualifications and functions of each office bearer clearly stated. This assures the would-be investor or financier that you have a competent team in place and that there is enough separation of duties so as to minimise fraud in your business. No one will give you money without this assurance.
4. Have a board in place & keep board records
Having a board that provides oversight to management is key to assuring would be investors or financiers of your accountability and that their money will be well looked after if they invested in your business. Minutes of board meetings should be well written and stored as this provides evidence that your board is functional and effectively providing its oversight role on management.
5. Have written policies and procedures in place
As a business you need to have some basic policies in place. Policies provide evidence on how the business runs its affairs on a day-to-day basis. The policies should be periodically audited to check if they are being implemented and adhered to by management and staff. If your business is involved in any processing of food or food handling, this becomes even more important so as to assure your customers that the food is produced in a safe and sanitary environment.
6. Look out for opportunities
It is important for you as a business to look out for funding opportunities that are available. Remember it is your business that wants funds so the onus is on you to find who can invest or provide finance to your business. Networking is key to getting information on funding opportunities hence as a business you need to have wide networks.
By Ngolwe Sikazwe, Portfolio Manager.