Avoid borrowing money from financial institutions as much as possible and for as long as possible, budding entrepreneurs have been advised by an official of a youth business support organisation.
Gregory Fergusson, the Business Development Officer of the Barbados Youth Business Trust (BYBT) recommended future entrepreneurs carefully consider their needs and their abilities before thinking about going to banks and government agencies for funding.
Fergusson was addressing the business support organization’s Business Over Breakfast seminar at the Accra Beach Hotel, as part of Global Entrepreneurship Week 2019 under the theme Building our Solutions Strong.
He advised that when going for a loan it was important for entrepreneurs to ensure they had a good character, a capacity to repay, some capital, their business was in good condition and that they had some form of collateral.
He recommended that start-ups first look to family and friends for financial help if they must before going to the more established financial institutions that he said was more likely to turn them down.
“Family and friends are very important to you initially,” said Fergusson, though warning that such a financing stream would dry up after a while.
“After ten years you can’t keep going back and asking family and friends to help you with your business. You could but you would get a lot more noes,” he said.
But he warned against going to banks for financial help in the early stages of operation, saying he was aware that “banks do not like start-ups because it is very high risk”.
He said: “So if you are a start-up and you are going to the bank you may very often get rejected, not because your business plan is not nice, it is because you are high risk… so you might need to go to someone else until you get there.
“You can start small as much as you and do as much as you can.
“My caveat with loans is that you avoid it as much as you can for as long as you can in start-up as well as certain stages of your business.”
Fergusson told the young business people that they had to consider things like monthly repayments, which he said could “cause a problem because you may not make regular revenue every month”.
While stating that he was not against start-ups taking out a loan, the accountant urged potential entrepreneurs to also look at other financing options such as angel investors, corporate investors, entering contests, having product pre-sales, going after venture capital and crowd funding.
Digital Marketing Strategist with Yello Barbados Sachin Ellcock encouraged the participants to engage in several activities to quickly grow their operations.
He recommended more use of video marketing and live streaming, use of social media, continuous training, addressing customer complaints quickly and offering personalized experiences.
Encouraging entrepreneurs to pay close attention to industry trends before making major decisions, Ellcock also advised them to use artificial intelligence where possible and listen to their employees.
He advised: “You may be the business head, you may be the person calling the shots, but you rely heavily on your staff.
“And very much their opinion will matter in the long run if not, in the short-term.
“I urge you to take off the blinders and look further beyond your [own opinion] if you want to stay into business longer than tomorrow.
“You need to form friendships and bonds and listen.”