When it comes to business finance, most people know the usual routes – venture capital, angel investors, banks and government small business programs, all requiring business plans.

If none of those are a viable option, however, there are other ways to make your business happen, and manipulating your cash flow is one of them. Here’s how it works:

? When you decide to start your business, you look for suppliers who are willing to provide you with goods and services, with extended credit periods (60 or even 90 days works well.)
? Pay careful attention to your pricing, and make sure that your margins are sufficient to ensure that you have a healthy profit after expenses.
? Sell to your clients on a cash basis, or on limited terms of 15 or 30 days.
? Make sure that you bank the money you owe to your suppliers – never default on a credit line, because you need them to be up and running for your business to function.

If you do this, then you should have cash payments coming in from your clients well before they are due to your suppliers. You could even pay your suppliers before the payments become due, and score from the discounts most offer for early payment.

If you’re making a reasonable margin on all of your own sales, after expenses, then you should find that within just a few months, you have built up a significant cash reserve. Keep doing that, and within a year or two, you should have enough to approach a financial institution for a traditional loan, or to expand your business.

No Money? No Problem!

When it comes to reasons not to start your own business, not having money is the last one you should ever worry about.

There are many, many businesses that you can start with little or no investment, and many ways to start businesses that don’t require an investor. You could also try supplementing your product sales with sales of a related service, since service based businesses usually have lower production costs.

Every single person out there, in every financial position, has the ability to start a business – even if they don’t get funding. Even if you have to start tiny, with a micro enterprise, because you can’t find business finance for your idea, you CAN make it happen.

Creative Business Finance

As you can see, there are many ways to find the business finance you need, if you are creative. Stop blaming investors who don’t have the vision to see the genius in your idea, and start making your idea a reality.

We can almost guarantee you that even if there is no investor alive right now who wants to fund your idea, if you can build your business up to a success on your own, without external finance, they will be beating down your door in a few short years.

So apply for financing, but consider creating a second, worst case scenario business plan, that you can use to create your business out of nothing if that financing does not happen. Nothing is impossible, and as Napoleon Hill famously said: “
Whatever your mind can conceive and believe it can achieve.”

Financing a business is one of the hardest things any entrepreneur will ever have to do – and many never find the funding they need to get started externally. If you are determined to get started though, there are ways to whittle down your budget, so that you can redirect money you’re already spending into a business start-up fund of your own!

Let’s look at some common household expenses, and how you can shave some money off them to spend on your business.

Housing or Accommodation

If you’re renting a home, then you can save money for business finance purposes by considering a smaller home or a home in a less costly area when your lease is up. If you live alone, and you have a spare room, then you might be able to get a room or house mate, to cut costs.

If you own your home, then there may already be equity in your home that you can access. If not, you also have the option of taking on a boarder, and cutting down on costs, and if you don’t want to share your home, how about renting out your garage as storage space?

Meals and Entertainment

Meals and entertainment are another area of your household budget that often contains hidden money that you could use for business finance.

Make it a rule never to buy anything that’s pre-packaged or processed. You’ll save a bundle, and you’ll be healthier too! When it comes to entertainment, remember that a couple of bottles of wine at home are always cheaper than cocktails in a bar, and you won’t have to pay for a taxi home either! Likewise, DVD’s on your couch is cheaper than movies, and the beach or a park is a better option than costly outings.

Insurance, Communications and More

You’d probably be surprised to realise that you’re almost certainly paying more than you should for insurance, cell phone and telephone bills, utilities and other monthly expenses.

Checking to make sure you’re not over insured, and taking the time to phone around for better prices from all of the companies you buy monthly services from can make a huge difference to your budget, and can save you money to put toward business financing.

Your Car

If you’re driving a big car, and you’re not transporting several people in it, you’re probably paying too much for the car and the fuel you use. Consider trading it in for a smaller, lighter, possibly second hand model, or even better, use public transport to get where you need to be (at least most of the time!)

Transport costs add up quickly, and you may just find that there’s a significant amount of money to be saved here.

You’ve Whittled Down Your Budget – Now What?

If you’ve done all the things mentioned above, and any others you can think of to save money, you may have as much as 10 to 20% of your usual monthly expenses to redirect to business finance.

Either you can use it as you save it, and start your business small, or you can set up a high interest notice account, that you can save the money in and access it once you’ve built up a sizeable amount.

The good news is that it’s almost always possible to start a business without outside funding, as long as you scale your business plans to suit, and you are careful with money. You might not be able to start off the way you would like to, but it’s often better to start with no loans hanging over your head, and to have the freedom and autonomy that self funding brings!

With the current situation of the economy and recession, 2011 saw many small businesses liquidate as well as large corporations downscale their staff to the minimal. Hence, many skilled tradesman have ventured into their own small businesses, backing their own business plan and personal commitment to make the idea a reality. Banks are not easily offering loans and it is becoming more difficult to secure business finance. Start-up capital is often a necessity to get off to a good head start with my business venture.

Business finance in South Africa, as many other parts of the world has become an increasingly sought after and often scarce resource for entrepreneurs. The thought process behind this from the banks perspective is now well known and much discussed and for many entrepreneurs seeking finance, business angels and virtue capital firms have become a sought after option. Business angel investors often provide the first significant outside capital invested in start-up companies. After an entrepreneur or team of entrepreneurs identify a business opportunity, and exhaust their own resources, they often turn to business angel investors to keep the venture growing. Without this capital, many new ventures simply cannot grow.

As entrepreneurs create new opportunities, some ventures show great promise and growth, and some of those will require additional capital. That capital can be provided in the form of debt or equity, but new venture risk is usually something that the banking industry avoids (with the exception of the credit card industry). Formal venture capital and business angel investors help meet this investment need of new ventures, a role that is uniquely important at a time when credit is particularly tight.

Angel investors are often more likely to get involved at the early stages of start-ups which many of them fund exciting and forms part of the reason why they are investing in businesses in first place. They want to get involved in the business and support the owner on the start-up and growth sages of the business. Because of the nature of their interest and resources a at their disposal this also makes plenty of the business sense as their relatively low investment at the early stage can secure them a healthy share of the new companies equity. They have become an increasingly important source of equity finance over the last decade for new and nascent businesses as venture capital investors are not able to accommodate a large number of small deals with their attendant due diligence and oversight needs. Business angels are now prominent coinvestment partners in the early-stage market.

Venture capitalists are more likely to invest money once the business is established, providing greater monetary amounts in return for shares in the business, and sometimes a role in the company, usually at the board level. Venture capital firms are more likely to take on high investment opportunities where the return may be equally attractive in order to justify the risk being taken in the first place. So as a small business or entrepreneur, this is something that you and your business angel may consider at a later stage of your business.

Angel investing is becoming more popular in South Africa. Contrary to media reports about the lack of accessibility to private investors and their inability to fund new businesses, South Africa still has its economic obstacles to overcome - fairly high everyday living expenses and a high unemployment rate - investors are trying their utmost to bring more business into South Africa, since investing is the only way to revive an economy.

Traditionally the world of Venture Capital and Angel finance has been dominated by men. I cant think of a justification for this as after all, apart from investment itself, the entrepreneur needs attention, support, understanding and someone willing to listen. Many of these requirements of course live within woman and apart from that , the fact is that both entrepreneurs and business plans are increasingly coming from the fairer sex. So with not enough startup funding reaching female entrepreneurs, a new program has begun with the mission of creating more female angel investors.

Although just as many females are starting businesses as males, only 11% actually receive startup funding from angel investors. According to the Center for Venture Research at the University of New Hampshire, women don’t seek out capital at a high rate and when they do, they are often looking for women investors. The problem is that female angel investors don’t exist in large numbers which makes them hard to find and the amount of money they have available much smaller.

Natalia Oberti Noguera, a 27-year-old Yale University graduate wants to change that. Natalia is the founder of the Pipleline Fund, a New York based venture capital firm who invests in socially responsible business models. She started the Pipleline Fellowship Fund which aims to increase the amount of female angel investors and steer even more money towards socially responsible businesses.

The Pipleine Fund is a boot camp, of sorts, for aspiring angel investors. Natalia has been taking applications from aspiring female angel investors since November for a program that will begin in January of 2011. The 10 trainees she selects will pay R1,000 to be part of the program plus another R5,000 of angel money. This money will be pooled to make an investment fund of R50,000. The women will pick one company in which to invest their combined R50,000. The group plans to hand out this money in the Spring of 2010.

Each woman will be paired with an experienced venture capitalist where they will learn the in-depth act of due diligence, valuation, governance, and the many other aspects of evaluating a company for possible investment. While many venture capital firms split the duties between the partners, this company puts all responsibilities on all members. Each person is trained so they can leave the program and go out in to the world and start a firm of their own.

Vanessa Wilson runs a program similar to the Pipeline Fellowship Fund called the Golden Seeds Academy. This program has grown so large that they lend R4 million annually to women investors. If Golden Seeds is any indication of the upside potential of the Pipleline Fellowship Fund, it won’t take long for this new program to be a major player in the world of venture capital.

The problem may be that there simply aren’t enough programs like these but as ideas like this catch on and become more well known, they are sure to generate more interest and create a new breed of female angel investors.

Its that time of the year again and business plan entries to the 2010 Entrepreneurship competition has been flooding in to Banwidth Barn, a Cape Town based business incubator who are the organisers for this years event. Entrepreneurs with exciting business plans has been urged to present them at the competition with attractive prizes on offer.

Recently announced by Cape Town Business news the opportunity for fast-tracked access to funding, mentorship and global exposure has opened up for Cape Town entrepreneurs, with the launch of the third Cape Town Entrepreneurship Competition. The competition forms part of Cape Town Entrepreneurship Week, which runs from 15 – 21 November, coinciding with Global Entrepreneurship Week.

The competition focuses on technology and innovation in the fields of biotechnology, telecommunications and media, information and communication technology (ICT), ‘clean’ technology, healthcare, and social entrepreneurship.

“Our previous winners have benefitted from competing in a global competition, and networking with a range of people and organisations. It is clear that this competition can play a vital role in identifying talented entrepreneurs who have the potential to build high-growth businesses,” said the City’s Executive Director for Economic, Social Development and Tourism, Mansoor Mohamed. Mohamed is also a Global Nominating Member for the Global Entrepreneurship Competition.

This year, the winners of the Start-up and Growth tracks will each receive R50 000 in prize money, while the Idea Track winner will receive R25 000. Apart from the cash prizes, the winners will also be considered for participation in further enterprise development and training programmes offered by the City of Cape Town’s various partners.

The competition opens for registration on 07 October 2010 and business plans must be submitted by 15 December 2010. Entrepreneurs wanting to enter can do so from 07 October at www.ctec.org.za. Entry is only available via the online entry form. The winners are expected to be announced by February 2011.

The competition is being managed by the Bandwidth Barn, a leading ICT business incubator and one of the City’s strategic partners. CEO, Chris Vermeulen, says the competition is set to become a flagship annual entrepreneurial event, reflecting the City’s focus on high-impact entrepreneur development.

With entrepreneurial opportunities being an exciting avenue for many for channelling their creative energies and ideas while having the opportunity to create substantial wealth, the competition will have no shortage of interested entrepreneur throwing their hats in the ring.