I am waiting for funding!
If I hear these words again, I swear I will run for the hills. Stop waiting for money and stop thinking you need money to start or grow your business. Once you let go of this myth a world of opportunity and possibility will open for you.
I have been coaching and mentoring startups and small businesses in my own pre-incubator as well as other programs. I am convinced that the belief that you need funding to start or grow your business is what is holding many back from building a business that will work.
Will you never need funding for your business? No, I am not saying that. In many cases, there are valid reasons and that is fine.
In November 2020 I created a recipe for job creation using my Human Entrepreneur Pre-Incubator program. I took 50 people from previously disadvantaged communities and they had to build a business in 21 days, with customers, making enough profits to replace their salaries.
Thirty-five new jobs were created in those 21 days as people built profitable businesses that replaced their salary, and not one of them required external financial help.
If they can do it, so can you, but let’s unpack this for a bit and help you shift your perspective. Why shouldn’t you wait for funding? Let’s see, shall we?
1. Funding can be a great time waster
Most startups or small businesses have what my dad used to call, a ‘crash flow’. They don’t have a lot of money to spend and very little to keep themselves afloat for long. Waiting for funding means there is a pause between your actions and moving forward. You might end up in a situation where you eventually get the funding but you have burnt through the same amount waiting for that money. You have not moved forward at all.
Worst case scenario: you don’t get the funding, what now? How much time have you wasted? Do you have enough money left to go and try something else? Probably not.
Nothing sparks innovation like constraints.
Instead, find another way, without funding, to start the business. If you can prove to banks or financiers that the business will work by signing up customers, getting paid and making money, then funding will be easy. It is safer for the funder and safer for you because now you have the ability to repay the loan.
2. It makes you lazy
There is no one way to do business. Nothing sparks innovation like constraints. And if you have a money constraint, that is not necessarily a bad thing.
A cleaning business in my pre-incubator program had 10 customers in the two months it existed. They started the program with me and in eight hours, they added 14 new customers. They are a buy-and-sell type of business, so they would need funding if you think about it. However, they asked all the new customers for a 50% deposit and they all paid. No funding needed.
If you do not have any paying customers and are not making money, then you do not have a business.
Start by fully leveraging what you have. You will be amazed at what you do actually have around you to execute a business.
Look at who you know. If you need money for a resource, then ask yourself who has the resource you want and how can you work with them or just use the resources and pay for usage? It reduces your risk and you can see if the business will work before investing your and your families financial future in a dream that might fail.
One thing I love is to leverage my competitors. One business in the pre-incubator sold live chickens ( but think of any product for that matter). They were running out of stock due to the size of their farm. I suggested they buy their competitors chickens and sell those to their customers. This means they are maintaining and growing their customer base by being able to sell more chickens to them.
They doubled their business in two weeks with this strategy. She grew her business and now has proof of the real market need and how big she must build her poultry farm.
There is nothing wrong with selling your competitors products, it reduces your risk and your initial investment and while gaining knowledge of the market and building a customer base. Later you can develop and build your own product based on your experience and takeaways.
3. Building the business comes later
If you are a startup or a small business developing a new service or product you have to realise that at this stage, it is not about building a business. It is about finding something that can generate profits that you can build a business around. Don’t forget this. If you do not have any paying customers and are not making money, then you do not have a business.
That is why my pre-incubator program was and is such a success. In those 21 days, many participants started and killed three or four or even more businesses. They found customers with money first, and then we built a business around that.
The fact that someone provided funding for your business does not mean it will be successful. Most businesses will fail and if it happens to you and you are stuck with massive debt, will you be able to start something else?
Why yes, we'd love to foreclose your house.
For me, it is important that even when you fail, you can get up and still move forward. The debt from that loan might just be the grindstone taking you down to the bottom of the sea, never to be heard of again. So I’d much rather you find creative ways of funding your business, getting paying customers and making money. It will make you creative and resilient and make you a better business owner in the end.