From sourcing loans to attracting investors, find out how to finance a start-up business idea with a little help from three women who did it themselves…
Tatjana Buisson, 36, is the founder and owner of Postick, a company she started through crowd funding in 2013.
Two of my friends had run a successful crowdfunding campaign for a book, and I thought it would be the best way to get funding for my idea. While it’s a relatively new concept in SA, crowdfunding is definitely gaining traction. Most of these funding platforms are online, and you’ll create a project page with your proposed idea, posting a funding goal with a deadline. People who like the idea can pledge money to your project, and so become ‘backers’.
You don’t pay them back, but you do give them ‘backer rewards’, which are items from your business. Depending on how much they contributed, I sent a pack of Posticks or illustrated cards to my backers. My background in advertising helped me write a passionate pitch about my vision: inspiring people to send postcards again. I uploaded this and a video to a crowdfunding site and sent the link to everyone I knew. I also built my own website where people could discover more about Postick.
I truly believed in my project, and hoped potential investors would, too – and they did! Within a month, I’d raised over R90 000 – almost triple my target. I was blown away!
Borrowing From A Financial Institution
Gwen Gower, 53, owns nursery and landscaping company EarthWorx Garden World, together with her partner Tony Mitchell, established in 2002, and expanded in 2009, when they sought additional financing.
I looked at different funding methods and came across Business Partners Limited, who specialise in financing loans for small and medium businesses. I compiled a business plan, pitched it, and they granted me a loan of R1,5 million, which covered the costs of buying and renovating the nursery we bought.
We spent a month revamping, installing a new irrigation system and rearranging the displays. The stock that was sold to us was virtually unsellable, so we put it in a “sale” pile and knocked the prices down by 50%. By September 2009, we opened the doors of EarthWorx Garden World.
Nozizwe Silindile Vundla, 41, owns Epiphanae, a bespoke clothing range for women, with her friend Tukwini Mandela, 42, which they funded through an ‘angel investor’ in 2011.
Our savings would only get the business so far. The banks were wary of our new start-up, so we turned to our families. We made a strong pitch, and our parents believed in our vision so much that they came on board as ‘angel investors’.
They were risking a lot, so we came to a strict agreement that their investment would be paid back. Our first customers were friends and family, but once their friends saw how fabulous they looked, our appointment-book quickly filled up.