In his new book on Financial Skills For Business Success, How To Start Small, I.K Adusei addresses the startup capital challenge and argues why money is the least of the major requirements in starting a business. In chapter 12, page 189 of his groundbreaking book, How To Start Small, the author had this to share.
TOP 3 QUESTIONS ON FINANCING ANY BUSINESS
1. How much do you need?
You say you need money to start a business, right? Alright! So, if you meet an angel investor who is ready to finance your business today, can you state emphatically how much you need? No‘guesstimates’here!
Most people conceal their laziness and ineptitude behind the cloak of lack of money to start a business. When confronted by a potential to make their dreams come true, they soon realise that what they needed was not even money. Money is the least of the basic requirements to start a business.
Ask yourself now. How much in actual terms do you need to start your business? I mean an actual budget of how much you need to start your business, indicating the areas and how much in percentage terms you are going to spend within a specific period to meet your desired target?
Now you know that you do not need money to start a business. Money is probably the last thing you need now. You need a budget which states in no uncertain terms how much you need and how you intend to spend it.
Now get to work!
2. How soon do you need it? Or when do you need it?
Many people come to me to seek business advice.
They mostly do not leave without talking about their lack of money.
The question most fail to answer correctly has always been, how soon they need the money? Apparently, their answer at all times has been, “now”!
I have come to know that it is people with a dire financial situation who go cap in hand looking for money to start a business. To succeed in getting the money now than later, one should prove that they do not need the money.
In reverse, the money needs them. The world is replete with people who want to put money where it can grow. People who have and are able to multiply money, would not sink a USD $1,000 in a pit, just because a mentee or close business associate claims he or she has some knowledge of starting a certain business.
The truth I have learnt over the years is that people who come cap in hand, mostly need money for their bellies – not their businesses.
Nonetheless, you may need money later on a specific date – say 2nd June 2020, to start your business.
As I am writing this book today, I know when this book will be published and how much I would need to do so. The time span between now and when the book is published, is the time ABN Communications, my publishing company will strategize to promote and raise the needed resources to actualize the dream. This involves a well-rehearsed strategy on financing, production, promotion, marketing and sales.
There is a winning financial equation I would like to share with you.
Business Plan (BP) without Financial Plan (FP) is just a wish (WH).
Therefore: BP – FP = WH
In addition, Financial Plan (FP) without a Business Plan (BP) is a wind (WD).
Thus: FP – BP = WD
Every business plan needs to go hand in hand with a financial plan for one to attain the lifeblood of business which is Money or Financial Success (FS).
Meaning: BP + FP = FS
A business plan without a financial plan is just a wish – everyone has one.
A financial plan without a business plan is a wind. The wind has many directions and can disappear in no time. A business plan should always move with a financial plan for you to achieve financial success.
The main reason why people sit down for years without starting a business is that they do not have money to start. Thus, they have a business plan but no financial plan. If you are in this category, you could have started last year with a financial plan of raising GHC 1,000.
You would have been able to start your business in January this year if you had made plans for it a year (s) before. Doing it later will make it greater.
Proper financial projections often give you the opportunity to strategize and as well raise capital for business.
To read more or access the book please go to: www.abnonline.org/books