Make money out of your big idea

If your passion pushes you to do something bigger, it may be time to consider making a business out of your what you love.

Think about the one thing you’d do even if you weren’t being paid to do it? Now imagine turning this passion into a business? It’s been tried and tested by many South African entrepreneurs who have paved the way to success.

Ntombenhle Khathwane is one example of how a single idea catapulted into a booming haircare range, AfroBotanics. In a previous interview with DESTINY, she shared how she started up her business.

“I started working on AfroBotanics in 2009 after a visit to my grandmother,” Khathwane said. “She mixed aloe vera gel with some natural oils and asked me to apply the mixture to her hair. Her hair was coarse, hard and dry like mine – but after applying the concoction, it immediately became soft.”

“When I returned home I tried to recreate what she’d made. I was finally able to wear my hair natural because her mixture softened it so beautifully, but I wasn’t really into the DIY aspect. By 2010, I’d written a business plan and started developing and testing products. I won a national business plan pitching competition called Pitch & Polish, and gained confidence in my idea. I quit my government job and used my pension to pay for a trip to the US to explore what they were doing and to speak to experts. I started selling my products, and by 2011 had established an online presence.”

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In an interview with Essence.com, Kendra Stephen, attorney and founder of law firm Supra Legal Group based in Florida, USA, offered ideas for finding capital to monetise your idea.

“One of the traditional methods of raising funds is to use the money in your savings account,” she explains. “That’s usually the old-school method. The next method is to get a loan from a bank or credit bureau. You could also try to get funding from friends and family. This would be a good option if you don’t qualify for a loan, because sometimes that’s hard to do when you’re not an established business. There are also the options of crowdfunding and pre-selling.

“Another option is to use credit cards, but I would exercise caution,” Stephen adds. “If the card is under your name it could be harder to file for bankruptcy. It’s usually easier and better to apply for credit under the name of your business. This way, if the business goes under, your personal credit doesn’t go under. It’s always wise to separate your personal finances from your business finances. And if you’re going to apply for a loan, do so under the company name. Also, if you’re going to accept money from friends and family, conduct your transactions under the business name.”

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Stephen also offered these tips when raising money:
•    Be realistic: if you think you’ll need only R2, 000 to start, in reality you probably need R20 000. Shift your mindset from personal finance to business finance.
•   Make sure you put agreements down in writing. If anything goes wrong and you need to go to court, at least you’ll have back-up in black and white.

Source: Essence.com