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Preparing your finances

Simple Alliance, Kenya Limited


Probably acquiring and preparing finances during business start-up is what is viewed by many as the most challenging bit in the lifetime of a business. Could be, the reason why many snob their entrepreneurial ambitions. This however should not be a worry with the reasonable start-up capital options that are to help aspiring business owners prepare their finances for an effective and springing start.

By concentrating on a few steps that indicate a well prepared entrepreneur you are sure to bring up a business that will not cause you headaches as you start the business.

Entrepreneurial needs

An estimate of the needs you have as you prepare to launch the business is a critical point to start and in doing this one considers the various launch options there are for a business, it could be a franchise, a partnership or a sole proprietorship and each of these will require its own special capital needs. In doing so you should also consider the finances you will need to sustain your business. The various options there are in the form of capital sources also come into play at this stage, and whether it is from out of pocket, savings or contribution from family and friends you should always ensure that it is neither an underestimation of overestimation of what can be catered for.

Financing options

In kind contributions and family savings can always be complemented by loans from commercial banks, commercial finance companies or venture capital firms which are always ready to offer capital to small business owners as long as they can present their case in a way that sells. In this point of preparation you need to be very careful as you will be required to evaluate the different terms that apply for each option in terms of evaluation and payback requirements. At this stage a business plan plays a big part in selling your idea.

A good business plan

As seen earlier a business plan plays a great role in preparing finances during start up and the format you adopt as you come up with one dictates whether you receive money from the lenders or not. One that details the education background of the business owner and the experience they have in the field under discussion works perfectly to show the lenders that you have the capacity to handle the projected tasks without them losing their money. This however is only propped further by indications of the nature of business and its viability in terms of the available resources and their role in ensuring its success, the competition and how it will be handled in ensuring that the business fits in the market place. This should also cover the timelines you have set for various objectives you have.

Projections and expectations

Projections of cash flow do not only work to convince lenders that you will repay the loan but also give you a picture of how much you need within a certain period of time.  This calls for realistic projections that are supported by facts that validate the estimates and projections. This to a great extent helps you as an entrepreneur to determine and establish the viability of your projected business.

Ask, ask and ask

Seeking peoples opinion may seem like a no go zone but is a crucial aspect of preparing your finances during business start-up. You need to be organised and approach objective minded people who will answer most of the questions you may have in your head about the finances due to be put into the venture. This does not only build your confidence but also prepares you for any issues that may arise. In doing this you need to talk with all people from potential lenders to expert counsellors who have a lot of wealth and will sure give clear guidance on steps of start-up financing.

Copyright (C) 2016, Simple Alliance Kenya Limited

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