Building a business venture from scratch

For many young entrepreneurs, finding an investor willing to provide startup capital is always an uphill task as many of them are skeptical about such ventures. This is besides the competition from other credit seekers. These challenges often demoralise many enterprising youth as they cannot implement their business ideas. However, some of the challenges faced by prospective young entrepreneurs are self-inflicted due to a misconception that only people with large sums of money can start and operate a successful enterprise. Many are also misguided that doing business is about ‘reaping’ as much money as soon as possible. With this kind of thinking and lack of access to funding, many start-ups never reach their fifth birthday, while the majority of business ideas by the youth stay on the drawing board and paper. But there is always silver lining on the horizon. So, before you abandon your dream, consider the following simple tips to put your ambition from thought phase to its first baby steps; Save for the project Investors prefer entrepreneurs with much more than just goodwill or empty plans. So you need ideas and clear plans to show the potential of the project and why the investor should put in their money. However, it is also not good to go empty-handed when seeking support. Start by saving however little you can afford. Remember, it is always important to take the first step on your own. Like they say, God helps those who help themselves. You can also borrow from friends and family if your savings are not enough to kick-start the project. For instance, Sandra Mutesi, the co-owner of Inzovu Afrikan Village, started with Rwf300,000. Mutesi says she used her savings and contributions by her family members. She says she forewent all the fancy things for sometime to raise capital. “While some people can spend this amount of money in one night, I used it to start a coffee shop that has since become successful,” she adds. Identify and associate with key players in your line of business It is important that you identify potential creditors, suppliers, distributors and customers who stand to gain from your enterprise. Creating good relations guarantees success because it will foster reliable partnerships that could help the business through provision of various services or supplies. Watch your spending Start-ups always experience a lot of spending. However, some of this expenditure can be avoided. The less you spend on unnecessary things during the formative stages of the business, the easier it will be to maintain and grow it steadily. You can cut costs by sharing premises with an already established business that is not a competitor. For example, a private car mechanic can set up shop at a washing bay. You can also delay capital purchases such as machinery but instead hire them until you have made enough to buy your own. Seek support from gov’t and MFIs The government promotes youth economic empowerment and has put in place initiatives to support young entrepreneurs, especially get access to funding. Also micro-finance institutions like SACCOs always provide targeted soft loans. Besides, these institutions give businesses with huge potential free technical support during the initial stages of the business. In Rwanda, the youth can seek support in form of loans and technical from the Business Development Fund (BDF) and Umurenge SACCOs. The support from these financial institutions helps grow business from a small venture to an established small to medium enterprise (SME). Resource control Many young entrepreneurs commit business suicide at the point at the beginning of the enterprise due to failure to distinguish between the cash at hand and working capital. This may bring the enterprise crashing down despite the promising signs. It is necessary for an entrepreneur to maximise the dependency on supplier credits and also develop their skills in the art of bargaining. Where possible, the business should have a reliable bank as a fall back in case it faces unforeseen cash deficits. This may be the difference between life and death for the first years of any startup. Many businesses collapse at the first revenue loss since they cannot raise funds for even basic raw materials; a restaurant that can’t buy the ingredients will soon be out of business. Business losses, just like profits, are day-to-day occurrences. If you stick to these simple guidelines, you could easily become Rwanda’s next millionaire. To quote an old adage, “a journey of 1,000 miles begins with one step.” By chantal uwerafor many young entrepreneurs, finding an investor willing to provide startup capital is always an uphill task as many of them are skeptical about such ventures. This is besides the competition from other credit seekers. These challenges often demoralise many enterprising youth as they cannot implement their business ideas. However, some of the challenges faced by prospective young entrepreneurs are self-inflicted due to a misconception that only people with large sums of money can start and operate a successful enterprise. Many are also misguided that doing business is about ‘reaping’ as much money as soon as possible. With this kind of thinking and lack of access to funding, many start-ups never reach their fifth birthday, while the majority of business ideas by the youth stay on the drawing board and paper. But there is always silver lining on the horizon. So, before you abandon your dream, consider the following simple tips to put your ambition from thought phase to its first baby steps;Save for the projectInvestors prefer entrepreneurs with much more than just goodwill or empty plans. So you need ideas and clear plans to show the potential of the project and why the investor should put in their money. However, it is also not good to go empty-handed when seeking support. Start by saving however little you can afford. Remember, it is always important to take the first step on your own. Like they say, God helps those who help themselves. You can also borrow from friends and family if your savings are not enough to kick-start the project. For instance, Sandra Mutesi, the co-owner of Inzovu Afrikan Village, started with Rwf300,000. Mutesi says she used her savings and contributions by her family members. She says she forewent all the fancy things for sometime to raise capital.“While some people can spend this amount of money in one night, I used it to start a coffee shop that has since become successful,” she adds. Identify and associate with key players in your line of businessIt is important that you identify potential creditors, suppliers, distributors and customers who stand to gain from your enterprise. Creating good relations guarantees success because it will foster reliable partnerships that could help the business through provision of various services or supplies.Watch your spendingStart-ups always experience a lot of spending. However, some of this expenditure can be avoided. The less you spend on unnecessary things during the formative stages of the business, the easier it will be to maintain and grow it steadily. You can cut costs by sharing premises with an already established business that is not a competitor. For example, a private car mechanic can set up shop at a washing bay. You can also delay capital purchases such as machinery but instead hire them until you have made enough to buy your own.Seek support from gov’t and MFIs The government promotes youth economic empowerment and has put in place initiatives to support young entrepreneurs, especially get access to funding. Also micro-finance institutions like SACCOs always provide targeted soft loans. Besides, these institutions give businesses with huge potential free technical support during the initial stages of the business. In Rwanda, the youth can seek support in form of loans and technical from the Business Development Fund (BDF) and Umurenge SACCOs. The support from these financial institutions helps grow business from a small venture to an established small to medium enterprise (SME).Resource controlMany young entrepreneurs commit business suicide at the point at the beginning of the enterprise due to failure to distinguish between the cash at hand and working capital. This may bring the enterprise crashing down despite the promising signs.It is necessary for an entrepreneur to maximise the dependency on supplier credits and also develop their skills in the art of bargaining. Where possible, the business should have a reliable bank as a fall back in case it faces unforeseen cash deficits. This may be the difference between life and death for the first years of any startup.Many businesses collapse at the first revenue loss since they cannot raise funds for even basic raw materials; a restaurant that can’t buy the ingredients will soon be out of business. Business losses, just like profits, are day-to-day occurrences. If you stick to these simple guidelines, you could easily become Rwanda’s next millionaire. To quote an old adage, “a journey of 1,000 miles begins with one step.”

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Building a business venture from scratch