One of the most challenging things about being an entrepreneur is figuring out the most cost-effective ways of financing your business. Furthermore, the budding entrepreneur, who most likely is not able to afford a big staff, is balancing financing with creativity, which are equally important in the beginning phases of building a business.

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Even the entrepreneur’s creativity requires financing. Rarely does a successful business become successful without having a solid business plan in place. This, in a nutshell, means, doing financial projections so as to have a fair idea of the potential of the business, having a budget for the business and having a solid marketing plan in place – you need to know that your business will at least appeal to particular target groups.

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The question for most entrepreneurs is how to achieve this without attracting stringent liabilities to their business in the early phases of its growth.

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My personal experiences as an entrepreneur of one year, have allowed me to be able to share the following tips:

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Always ensure there is cashflow

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If you’re so eager to see your business idea come to fruition because you feel the time is ripe for the idea to be made a reality, then you may or may not have savings to back the idea. If you fall into the latter category, it would be helpful if you have another source of income. More often than not, budding entrepreneurs either have day jobs or other businesses.

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If you want to fund your business but are avoiding loans, then cash flow is even more important for you who would most likely be using personal funds to finance your business.

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The budding entrepreneur with the colloquial “day-job” should dedicate a percentage of their salary to their budding business, in savings. Commercial banks offer products such as fixed deposits which compels your saving for a period of time.

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If you are already a business owner, introduce investment mechanisms as a part of your financing plan. Examples include finding ways to make one business fund the other if you are the owner of more than one business or finding business partners.

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It has been reported that 82% of businesses fail because of cash-flow issues.

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Track the Business Cycle

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Developing a business in 2021 in Guyana introduces the context of doing business during a global pandemic. Typically, it would be profitable for the new business owner to supply a product or service for which there is high demand.

The business cycle starts with an increase in positive economic indicators, gradually moving its way to a peak point, which is the point at which economic indicators can no longer grow. After the peak point is the recession followed by the depression point. The budding entrepreneur should try to avoid being terribly victimised.

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While some businesses are feeling the effect of the peak phase of the Business Cycle, others are in the expansion phase. While the Covid-19 pandemic brought about challenges for some businesses, many new businesses for which demand increased were born. Typical convenience-based businesses such as delivery services, sanitisation services, and even Covid-friendly entertainment services have shown just how creative, both existing and budding entrepreneurs can be.

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What is important for these businesses is ensuring their sustainability beyond the peak period of the Business Cycle.

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Be Ready for potential Investors/Partners

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Some people lack the necessary trust to take this step. However, a basic written Memorandum of Understanding can allow for all concerns relating to partnerships, to be addressed.

As a budding entrepreneur, it is important to understand the benefits of having an investor or a partner. My personal preference has always been for a partner which takes 50% of the burden of investing off of me. It has also allowed for a capitalisation on varying strengths, per partner and it also allows for a division of labour, thereby giving both partners the space to have other sources of income.

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Being ready for a partner means having all the information that would help to persuade your potential partner to become a part of your business venture. At the very least, you should be able to show your partner how much revenue your business is projected to attract in the short, medium and long term and you need to be able to show how you propose it does so.

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Capitalise on the changes in the Business Environment due to the Covid-19 Pandemic

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Many businesses have either adopted a fully or partially virtual workspace to avoid the spread of coronavirus. Automatically, this means that overhead costs for the business would be reduced significantly. Subversively, this could also mean that the burden of certain overhead costs has been shifted to employees, for instance, electricity and internet use.

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In an extremely virtual world, what business idea would make sense? What product or service does not require physical interaction especially since a large percentage of any given market may be touching-averse due to the pandemic? These are questions that can spark potentially sustainable business ideas.

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