Is lack of capital really the biggest hurdle to starting a business?
Very many times lack of capital is the main reason many give for failing to start up a business or for not going after their dream.However, the big question I want us to ask our selves today is; is it really just about easy access to capital?
I won't hide my head in the sand about the limited sources of capital for start ups locally? Surely the options are limited but how best we've made the most of these limited options is yet another question to ask or explore.
Early this year one of the ventures am involved in, CAMPUS DOCTOR received a grant of $5000 that's about Shs 18.5M. We were a group of about 80 from Uganda and some of them received this money about three months earlier than our lot did.
The reality is by the time we got our share of the grant most had already spent 50% of the money or more. Some bought cars, some spent the money on the festivities of the festive season since the money had come around November.
We got our money and tried to do exactly what we set out to do with the money. Cover salaries for some workers and we still have lots of the money 7 months down the road and the salaries of those staff are guaranteed for another 5-6 months.
The venture has greatly benefited from their presence and our ability to keep them has been vital to the growth of the venture. Truth is we've been in the most grant filled era for entrepreneurship and business.
Many small ideas have gotten grants from here and there both locally and internationally but you can't point a finger to where the money went or where the idea disappeared to after some time.
I have also seen in my practice where people have been given money for what's a great idea and they squandered it in quick self gratification rather than following through with the promising plan.
We can say raising capital is hard, but also what we do with the little capital we raise sets precedence for how hard or easy raising this capital will be the next time around.
How easily those with money will trust you with their money and this is a collective responsibility for those in the start up space winning investor and financier trust and confidence.
How much trust do potential financiers have in the start up space not in terms of how good the ideas are but the ability to implement the ideas with a high level of discipline and diligence that gives these ideas a chance at success?
As an entrepreneur I know how important money is to any start up. I have just concluded (two weeks ago) a crowd funding drive that raised about 26M for an experiment snack business.
Over 100 people I don't know personally collected this money out of sheer trust (I believe) in me as a person and my ability to execute the idea.
What I do with this project will be a determining factor of how we move forward not only to me as a person but the whole start up financing space.
That's the reason we are under immense pressure to pull this off and we believe we have the discipline and ability to do this. If pulled off this could change the dynamics of the start up financing space.
Reality is before we say getting capital is hard, we should be asking ourselves how well have we handled the little we've been getting through the limited available options because he/she who can handle the little they're given can easily be trusted with bigger things after.
The responsibility of building investor and financier trust and confidence in the Ugandan start up space is one that lies on our shoulders collectively as entrepreneurs and startup business owners.
Jaluum Herberts Luwizza is a Speaker,Writer and Contributor with the Nile Post.He is also a Business Consultant at YOUNG TREP East Africa's No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.
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