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Dragons' Den SA : EP 8 Preview

News
11 November 2014
Not an episode you’re going to want to miss.
Dragons' Den SA : EP 8 Preview Image : 124
Tonight is serious rollercoaster viewing on Dragons’ Den SA with the Dragons trying to be on their best behaviour, you’ll just have to see for yourself whether they were able to bite their fiery tongues…

Through the episodes, we have seen some interesting themes from retail to energy efficient logistics; concepts, solutions and products, all of which have been presented to us thick and fast; some with thorough and confident efficiency and others leaving themselves vulnerable to dragon annihilation, all for our viewing pleasure. There is one thing all these pitchers have in common; they’re all looking for funding.

So an investor turns you down, where else would you look for funding? Here’s the reality; innovative entrepreneurs who have “out of the box” ideas have to knock on doors when it comes to accessing financial and business support.

Financing small businesses is challenging, given the difficulty in assessing your ability to repay a loan, if investors are out of your funding reach and you’re approaching a bank for a loan, here are a few tips to assist you in best possible chances of approval.

1. If your business doesn’t yet have its own credit history, banks will be hesitant to take a gamble on you; provide a track record of financial history as banks will be scrutinizing this.

2. Banks will also note a trend of late payments to suppliers; these are red flags for lenders, they will look at how many times you were late, how late you were and how long ago. Be ready to explain any tardiness in the past several months and to offer proof that your cash flow is healthy.

3. Writing a business plan sufficient in financial detail for investors can be tricky. In an urgency to acquire funding, entrepreneurs often leave out key numbers and are too enthusiastic when it comes to projections and trajectories of turnover. A good rule of thumb is to have a realistic estimate of your first-year cash requirements and a gross margin. It’s also recommended to calculate a growth rate to forecast a realistic scalability of costs versus sales.

According to one of South Africa’s leading banks, small and medium enterprises account for a lot of South Africa’s gross domestic product (GDP) and provides crucial employment opportunities. A flourishing SME sector is essential for economic development and is vital for economic transformation.

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