The Ultimate List of Everything You Need to Finally Secure Funding for Your Small Business

There is a lot of advice out there for entrepreneurs on how they can secure funding for their small businesses. We have compiled all the funding received over the years from experts, funders and entrepreneurs.

From the right documentation needed, to adequately researching investors and funding instruments and how to pitch. Below is a guide for what you need to get right before going out and seeking funding.

Have the proper documentation

1. Financial documents – “Basic business plan; cash flow projections; outstanding debtors (i.e. customers who owe you money); up-to-date management accounts (i.e. income statement, balance sheet and cash flow statement); latest annual financial statements; latest VAT statement; last three/six months’ bank statements, tax clearance certificate” – Darlene Menzies, CEO of Finfind.

2. Personal documents – “ID documents of owners; marriage certificates of owners (where applicable)” – Darlene Menzies, CEO of Finfind.

3. Business documents – “Company registration documents; office lease or mortgage agreement; shareholder agreements; share register; proof of business address; relevant business licences; accreditations or registrations” – Darlene Menzies, CEO of Finfind.

4. Application forms – “Prepare your application pack to ensure your funding application is aligned with the type of funding opportunities the funders are looking for” – Jeremy Lang, Regional General Manager of Business Partners.

Research and plan for investors

5. Identify the investor’s flavour – “Investors usually have preferences which relate to their own expertise and experience in a particular industry. For example, there are investors who specialise in technology, agricultural processing or financial services, and they will only engage with and fund businesses that fall within their focus area” – Allon Raiz, founder of Raizcorp.

6. Have a exit plan – “Investors want to see a solid business plan that includes monetisation and scalability, as well as a viable exit strategy”.

Research the right funding product for your small business

7. Approach the right funder – “The entrepreneur must also do their homework into the VC funds that are investing in SA to determine if their business is in line with the types of businesses/sectors the VC’s they are considering invests in” – Keet van Zyl, Knife Capital co-managing partner.

8. Know what is available – “Familiarise yourself with the different types of finance products available” – Darlene Menzies, CEO of Finfind.

Be fully transparent

9. Be honest – “Be transparent about your risks”  – Andrew Louw​, CEO at +Louw.

10. Be upfront – “It’s vital to have a frank discussion with the lender and disclose any relevant past issues (including bad credit record)” – Gary Palmer, CEO Paragon Lending Solutions.

11. Don’t lie – “You must be able to tell them how they are going to get their money back. Be realistic about it; don’t lie” – Andile Khumalo, I Am An Entrepreneur.

The pitch

12. Practice – “Perfect your pitch” Keet van Zyl.

13. Know your product – “Be able to explain your idea simply and easily in 30 seconds or less” – Andrew Louw​, CEO at +Louw.

14. Tailor your pitch – “Don’t deliver the same pitch to everyone” – Adjust your pitch to suit the audience, whether it’s a potential investor, collaborator or clients” – Selebogo Molefe, The Hookup Dinner and The People’s Fund.

Ensure there is Product/Market fit

15. Test the product out – “Don’t look at getting a million Rands for a concept you haven’t even tested Tafadzwa MadavoBusiness development manager at Riversands Incubation Hub.

16. Know your customer – “Understands their customer and market segment well” – Jeremy Lang, Regional General Manager of Business Partners.

17. Know your customer – “Clearly define ‘What problem are you solving for your customer?'” – Vusi Thembekwayo, well-known South African businessman, investor and public speaker.

Have a track record

18. Have some traction – “Already [have a] proved product/market fit and some traction – Keet van Zyl

Build up your industry expertise

19. Have some skills – “[Investors want] business owners who understand their business from a technical perspective and have good levels of business acumen.  Jeremy Lang, Regional General Manager of Business Partners

20. Know your industry – “Business owners who clearly illustrate a passion for the business and industry” –  Jeremy Lang, Regional General Manager of Business Partners

Build a team

21. Build a team – “You need capacity. Find those marketers, find those IT people, find those legal people. Too many entrepreneurs look at those skills as investments to be made grudgingly, to investors is one more indicator of success.” – Al Karaki, programme manager at Founder Institute Johannesburg https://www.smesouthafrica.co.za/what-investors-are-looking-for-in-sa-startups/

22. Prove your team can execute – “Investors want to know the entrepreneur’s background, and whether the team has the ability to execute the plan and make the business a success”

Always be prepared

23. Stay ready – “Have documents ready on a memory stick or an email folder for when you meet the right people” – Marang Marekimane

Be personally invested

24. In it to win it – “You have to invest in your dream before anyone else does. Once investors see you’re willing to risk everything, they start believing in you. Struggling to find financial support taught me independence – and persistence when it felt like no-one would back me.” – Allegro Dinkwanyane, founder of Orgella Media

25. Be involved in all aspects of your small business- “Committed business owners, both financially and through their level of involvement in the business” – Jeremy Lang, Regional General Manager of Business Partners

26. Be personally investable – “There is no better evidence for success than the passion you bring to your business. It’s the persistence of the entrepreneur that funders will be investing in.” – Al Karaki, programme manager at Founder Institute Johannesburg

Have a business that is legally compliant

27. Take care of the legal – “Find a team of professionals who can help you stay on the right side of tax and legal requirements” – Gary Palmer, CEO, Paragon Lending Solutions

Know your why

28. Is it necessary? – ‘Do I want it?’ versus ‘Do I need it? – Darlene Menzies

29. Is the timing right? – “Do I Need It Now?”- Darlene Menzies

30. Is the business ready? – “The first question we ask is: “Is the business ready for money?”, and then: “What is the money for?” Many entrepreneurs think money will solve all their problems” – Chantal de Kock, general manager at Fetola Business Development Professionals

31. Know what the money is for – “Be clear about what you need financing for in order to determine which lenders you should be approaching  – Darlene Menzies

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Lebohang Thulo
Lebohang Thulo
Lebohang Thulo is the editor of SME South Africa. She enjoys keeping up with the country’s exciting and fast developing entrepreneurship ecosystem. You can find her at @lelele3