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Comment to the Editor

"A part of all you earn is yours to keep,
and if you cannot save money,
the seeds of greatness are not in you."
­W Clement Stone

Before you go searching for funds read this counsel - Luke 14:28.30 "For which of you intending to build a tower, does not sit down first and count the cost whether he has enough to finish it, lest after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, this man began to build and was not able to finish."

1. YOU NEED A THOROUGH INVENTORY OF YOUR NEEDS
You need to sit down and prepare a business plan.

2. DO A SELF-ANALYSIS OF YOUR BEHAVIOUR AND THE BUSINESS
(a) Do you lack capital because you are lazy?
(b) Are you in a wrong business?
(c) Are you in a wrong location?
(d) Are you operating with the wrong materials/equipment (e.g. manual typewriter where computer is needed)?
(e) Do you lack passion for your business ideas?
(f) Does your business lack organisation (you get into some stores you don't feel like buying anything; soap coupled with food items)?
(g) May be you lack focus. You are doing other minor business while your core business lacks the attention needed.

There is nothing you do part time that can fetch you full time benefits.

3. YOU NEED TO PREPARE AN INFORMATION MEMORANDUM
This summarises the state of your present business operations (if you are already in business). It is to communicate the vision of your business, the people behind it and basic financial projections vis-a-vis what investors should expect as return on their investment. It will also state clearly how much you need and what you want to spend the money you are raising on.

How To Pick The Right Strategy For Raising Capital
Six Questions to Answer
To guide your choice for raising the fund that will meet your particular need - answer the following six questions.

Are you starting a business afresh ? Your best bet is personal savings, family sources, assets sale, contributions, mentor funding, partnership, gratuity, pensions benefits.

2. Do you need working capital? - Go for credit purcl1ase, private placement of shares, retained earnings, up-front payment.

3. Do you want to procure fixed assets? - Lease purchase, bartering, venture - capital or syndicated personal loan are best options.

4. Do you want to expand your existing business operations? You can explore internal sources as thrift savings /co-operative, insurance, pay­off, retained earnings, bartering or private placements of shares.

5. If you want to diversify into another business area, you .should consider angel investors, mentor funding, NGO's venture capital.

6. If you want to enlarge your ownership base to ensure long term survival of the business ­go for public offer, syndicated personal loan, etc.

MAJOR SOURCES OF RAISING CAPITAL
1. ANGEL INVESTORS
They are group of investors with considerable disposable income who are usually on the lookout for attractive investment opportunities. They are mostly matured people who emphasise safety of their capital with the need for appreciative returns.

They are termed angels because they are accessible to virtually everyone that needs capital once you are able to get across to their heart with a marketable idea.

HOW TO TRACK DOWN "ANGEL INVESTORS"
They are mostly senior officials of government, corporate organisations who are getting close to retirement. They can also be found in military circles.

Angel investors can be contacted mostly by reference, often through professional adviser e.g. your accountant or financial consultant. who assisted you in preparing your feasibility study or your lawyer who helped you to incorporate your company. They can refer you to such people.
They can also be contacted through assistance of pensioners or retired executive of government via chambers of commerce and trade association, or among retired military officers.

2. GRANTS
These are capital towards a particular funding need and on which there is no obligation of repayment. Grants are usually given in support of specific causes - e.g. charity support of services to advance the cause of humanity e.g. to eradicate unemployment, poverty eradication, orphanage, handicapped peoples' support, AIDS/HIV awareness, etc. There is no obligation of repayment. Grants also exist for macro and small scale businesses.

How To Attract Source For Grants
1. You need to propose a comprehensive business plan for the intended business.
2. You need to identify the funding organisation ­Foundations, Charities, and International bodies. This can be procured from chamber of commerce, Trade directories and Internet.
3. Prepare a shortlist of a few of the organisations who are willing to invest or listen to you most. Approach them one by one with your plan.
4. Put structure in place to ensure good accountability because that will be the yardstick for continuous existence.

BARTERING
Bartering means trading by exchanging goods for other goods and not money. If you will take advantage of this strategy, itemise what you need in your business e.g. equipment or physical assets or raw materials. You will then shop round for those who have what you need. You are to position your own end product or service in a way it can be easily exchanged for other goods.

Your bartering proposal will be in written form. You should analyze the viability of every bartering. Somebody who sells cars but needs computers may shop round for a computer maker who needs cars. A newspaper publisher who needs printing paper can meet a newsprint merchant who wants advert for his business. The newspaper publishers will offer advert space of equivalent value to the paper merchant.

4. MENTOR FUNDING
A mentor- is a person with demonstrated competence and experience in a Particular area of human endeavour from whom informal instruction or guidance is obtained. While the main reason of getting a mentor is to have access to his knowledge so as to duplicate the results he commands the mentor can also be a good source of raising capital in two ways.

1. Mentor can provide references to other sources to raise the capital by making recommendation to funding bodies agencies.

2. He can invest directly into your project if he/she has the means to do so. By serving as your mentor, he will be able to monitor your performance continuously.

NON-GOVERNMENT ORGANISATIONS (NGO's)
They are institutions set up as non-commercial unit, not profit making to advance identified objectives. Some of these provide assistance for business start up and similar endeavours. They include International Finance Corporation (IFC), United Nations Development Program (UNDP), Ford Foundation, and Rockefeller Foundation. Several NGO's abound to take care of interest of those who need finance in virtually all areas of business.

Those ones that help to provide fund for macro and small business development usually put some conditions in place before prospective applicants can be eligible. They start with capacity building, offering training to applicants to ensure they are in the best position to utilize the funds that will be given to them effectively and thereafter guarantee pay back.

6. THRIFT SAVINGS/CO-OPERATIVES
Everybody involved in this must have a regular income either daily/weekly or monthly.
Faithfulness is expected. It is best among those that know themselves and have developed considerable trust in themselves. It is operated as target savings account in some banks.

7.INTERNET SOURCES
There is immediate capital you can access in the internet. When you log in, you are provided an exhaustive list of various types of capital to meet the needs of various types of people. The categories range from the size of the money needed, for what project the money is needed and for what time frame. You who have the category, or the geographical area of the project, internet will show you grants available for certain categories of business ideas.

The internet will give you the way you will be able to access the sources and everything you need to know about them. The internet matches the capital seeker with the multitudes of capital provided. Some organisations do their approval on-line and will be able to give you their verdict in a matter of hours. Document is usually done on-line and disbursement can follow it in matter of days provided all information provided is valid.

ASSETS SALE
Proceeds generated from the sale of personal assets are one of the most valuable and fastest ways of raising capital for your business. The ability to turn personal assets to cash in good time will take the stress out of the capital-raising endeavour. You have possession you have not used for long. Some items you are using that are not too critical to your daily existence such as second car, jewelries, extra freezer or fridge.

WHAT TO NOTE IN CONVERTING ASSETS TO MONEY
A. You need to estimate the exact amount that is needed. It is not good selling your asset if you are still very far from the actual amount needed

B. You must state the time frame in terms of when the money is needed.

C. Assess the urgency of the situation especially in an inflationary period. It is possible to sell at a higher value than you bought it. However, after you must have used the capital for the business and you want to buy a replacement for the asset you sold, its price would have gone up considerably.

Assets that can be converted to cash quickly include shares and stocks, treasury bills, certificate of deposits, landed property, vehicles, household equipment like washing machine and TV.

It is only as a last resort, you may settle for a discount to get a ready buyer. Otherwise, fix your price and allow the buyer to pay in installment. A friend sold his car to settle a loan that had an astronomical interest rate.

9. CONTRIBUTIONS (FRIENDS OR NEIGHBOURS)
It is a very good way of raising capital for start­ups especially if capital requirement is not too large. It begins by drawing up a detailed business plan. The business plan must be thoroughly done to show exactly what the business would be all about. These friends are to be shown their expected benefit from the investment. After drawing up your business plan, come up with a list of your friends or neighbours who - you know will be positively disposed to invest in your venture.

You can then divide the amount of money you intend to raise among them. Thereafter, you should send the invitation for them to sit together with relevant extracts from your business plans. You will be shocked to see the level of support you will get.

10. FAMILY SOURCES
Apart from personal savings of the promoter of a business, fund from family sources are the next most reliable source of capital. Family sources will include nuclear, immediate family, uncles, aunties, nephew, niece and everybody categorized as the extended family. Why this source is reliable is threefold.

1. Successful members of the family always find it difficult to watch relatives fail in a business endeavour due to lack of capital

2. It is easier to monitor the activities of a family member than unknown person to whom funding assistance has been extended.

3. What each person will be giving may be so small that it may be regarded as a grant.

11. GRATUITY/PENSION BENEFIT
If you are under employment today and you are proposing to start a business after retirement, you can plan toward using the gratuity that will be paid to you depending on how close you are to retirement.

12. INSURANCE PAYOFF
If you have been operating insurance for sometime, you might be able to raise the capital you need for your business from the policy. Insurance policy can be used to raise capital in the following ways:

1. Some provision in the life policies provide you the opportunity to encash your policy after you have paid your premium for a minimum number of years. This is what is called surrender value. You will be entitled to collect all what you have paid as premium together.

2. with some interest that would accrue to it over the period. You can borrow against the policy you are operating. Some companies can lend you funds double the amount of your cumulative premium. As long as your policy is current it will be at low interest.

You must be ready to provide some comfort to enable the company cover the risk of their exposure. This may be in the form of a credit bond floating lien or your operating assets or personal guarantee of credible insurance.