Business Corner with Niq Sibanda


What actions do you need the most to leverage opportunity in the coming year?

 1. Recapitalisation

Depending on where you are at, most businesses need more financial resources to scale up. The current sales to salary cycle does not allow you to go beyond staying afloat, paying staff and servicing debt. But where in this depressed economy does one get more money?

 • Loan: The cost of capital can be expensive and terms very harsh. A loan may be the easiest route, but not the cheapest. Your source is important. Don’t go with loan sharks and other high interest options. Check out the repayment terms and negotiate if possible. If you can secure an interest free loan from family or friends or even a church fund, the better.

 • Investor: Besides a loan, it may be wise to look for an investor. An investor will give you funds for a stake in your business or a share of profits. Make sure you are not selling yourself short.The idea about investor funding is to always make your business investor ready. Don’t just wake up and give away half of your business for R100k. A critical factor is to know what the business is worth in financial terms and how it is likely to perform profitably to guarantee a return for the investor. Use this information to bargain with an investor.

 • Equity: A lot of us have excess assets lying around in the house or garage. Sell something that you own and put the funds in the business. A car, house/land, boat, clothes, jewellery, shares or whatever you have that is valuable and can quickly convert into the money that the business so desperately needs.

Niq Sibanda