Over the next couple of days I’ll be sharing this article with you on the blog. Written by Andrew Honey and published in the September edition of Entrepreneur Magazine, it makes for an interesting read. Thanks to Nicole Lombard, Publishing Editor of Entrepreneur Magazine, for allowing us to share this with you.

The Secrets to Raising Money to Start and Grow Your Business

By Andrew Honey, publisher of Entrepreneur Magazine

Raising cash for your start-up or established business is often a long and arduous journey. Some have succeeded. Many have failed. Having had first-hand experience at this, I know what it takes – planning, discipline and tons of resilience.

The setting for this article begins with one of the most frequently asked questions in business, “How do I raise money?” I am sure many entrepreneurs have not started what was possibly a great business simply because they could not raise money and believed they had to when in reality there were a number of alternatives as outlined in this article.

Furthermore, many businesses that failed could have been operating today, delivering good, sustainable profits if they’d followed the advice and ideas as outlined [below]. The critical success factors we look at for raising money are applicable to all types of funding requirements: start-up, expansion, franchising, BEE & cash flow. There is no simple answer to raising money. However, by following the four-step formula as outlined [below], as well as heeding the advice in the tables and the real-life case studies, the likelihood of success will be greatly increased.

Source: Entrepreneur Magazine – http://www.entrepreneurmag.co.za/

A group of top panellists attending a function organised by the Mail & Guardian last week agreed that government should do more to support SMME growth. Stimulating small business should be a key focus for the economy to absorb the unemployed, Finance Minister Trevor Manuel said. Economist Stephen Gelb said that black empowerment had created an environment that encouraged people to express their innovation in the corporate sector instead of in the creation of small business. Absa chief executive Steve Booysen said that not enough attention was given to small business although they were the biggest employers.

• In OECD countries SMMEs account for more than 95% of firms, 60%-70% of employment and 55% of GDP
• In developing countries SMMEs represent more than 90% of firms
• It is estimated that in African countries SMMEs generate between 32% and 60% of GDP.
• A World Bank estimate shows that SMMEs represent more than half of all GDP and account for nearly two-thirds of employment.
• In all of Africa and south Asia, less than $1 billion in actively managed investment funds specifically target the SMME sector.

 Source: Business Report, Thursday, August 28 2008
Source: Grofin