Dave Romero


It is the end of another year. You are feeling exhausted, having had to face challenges and have had highs and lows. This is a great time to reflect on your business. It is important to do a ‘balance sheet’ of what has happened. Take a page and draw a line in the middle. Do not do this on your computer! It is a personal thing and I feel when you do this sort of thing it just seems more real doing it on paper instead of doing it on your computer (or any other device). On the left of the page write down all the good things that have happened. On the right hand side, write down all the negative stuff. Be brutal, don not hold back. Self analysis is a healthy activity.

 

 

I do not believe in New Year’s resolutions and very few people ever keep them. I do however believe in formulating strategies and measuring how you are performing against them during the year.  A good exercise is take the negative column and work out how to overcome them in the New Year.  Be practical. Set realistic goals and sprinkle a bit of positive thinking for good measure.

 

Each year there are a few things you should consider:

  • How is the business doing compared to the original business plan? This is a great exercise. It also helps to remind you why you do what you do. 
  • Are you still making a difference?
  • Do you still wake up in the morning and get excited about the day?
  • Are you happy? Have you reached that stage in your life where business and personal life in balanced? 

 

If your answers were negative, you have to reconsider what you are doing and how you are doing it.

 

Do not let cash flow be a discourager. One thing is certain: if you pursue your dream with passion the cash flow improves. If you pursue cash flow you make things tougher on yourself. It is easy to make decisions based on the cash situation. If you only focus on fixing cash flow it does not last long because it is not sustainable. I find many entrepreneurs making the wrong choices were purely based on cash flow. Focus on the bigger picture and bring it back step by step which includes cash flow. 

 

I would love to see some of your ‘balance sheets’. If you want me to comment and maybe assist, scan them and email them to me. And remember to turn obstacles into opportunities.

 

Have a blessed Christmas and a great New Year. 

 

You can contact Dave via email on This email address is being protected from spambots. You need JavaScript enabled to view it. .

 

 

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The Caban Group of Companies is a collective of entrepreneurs helping other entrepreneurs by providing essential services on credit and raising capital. For us to achieve this goal, we ourselves constantly raise capital for Caban locally and abroad. With over 90 year’s collective experience in raising capital and having successfully capitalised 100s of companies, we want to share our experiences on what it takes to raise capital. There is a misconception that there is a lack of capital in the eco-system. We wholeheartedly disagree: if you follow some key traits and activities, you will find the capital for your business.

 

We have broken our advice down into two sections:

 

1. Preparation prior to pitching

 

Get friends and family behind the project

 

Investors, most of the time, want to see that your family and friends have invested in your dream, however small that investment might be. The investment does not always have to be in cash but can also be in sweat capital. Just knowing that family is involved in some way and that an entrepreneur has their support goes a long way in assisting an investor in formulating an opinion about the project. It is of critical importance that your life partner is completely behind you. If your life partner is not behind your project, you have two options:

 

  • Change your life partner;
  • Do not proceed with the project.

 

I know it sounds brutal but don't even try to get going if your life partner is not fully behind you.

 

Business plan and related documents

 

We never get involved in a business unless there is a plan. We have written about the subject many times. Business planning is critical for the success of the company and for an investor it clearly sets out the objectives, the "how to” achieve the objectives and the ultimate reward. These plans should include exit strategies so that investors have a clear understanding on how they will eventually cash in the investment. 

 

Your business plan must clearly demonstrate that there is a market for your concept. The best way to demonstrate this is to do field surveys. These field surveys must be large enough to satisfy a potential investor that there is a market for your goods or service.

 

Supporting documentation is crucial. If you make a statement back it up with proof. Never make broad statements, this does not impress. State your sources so that it can be verified and if you are not sure of a statement leave it out.

 

Your presentation document must be excellent. Your key documents are as follow:

  • Executive summary;
  • Full business plan;
  • Historical figures if available;
  • Five year projections which include balance sheets, income statements and cash flows. Solid assumptions must accompany your projections;
  • A PowerPoint presentation.

 

If your documents are good, it creates the right impression.

 

The right team

 

We often get commended about the Caban executive team. The remarks stem from the fact that we all share the same vision and determination. Most start ups, by their very nature, do not have a complete team. That is why it is imperative that you have the right corporate advisor at your side. The advisor will give you the credentials that your team might lack. Most of our start ups are "one man business". When presenting, it does not inspire investor confidence in investing in one person. By aligning themselves with the right corporate advisors, they can state that they have financial, marketing, legal expertise as part of their team members. This reduces the perceived risk for investors.

 

Corporate advisers and mentors

 

Being an entrepreneur is a lonely road. You should have advisers that are prepared to go on risk with you that will assist in the process of raising capital. Choose mentors and advisers that understand the game and have a team behind them that can assist in the many challenges entrepreneurs face. Once you have the funds, investors want to see that you have the right advisers to follow through with your business plan. It gives investors comfort if your adviser gives an undertaking to them that they would get regular updates on the company, besides the normal corporate governance routine. 

 

Do not overvalue your business

 

Every entrepreneur thinks that their project is worth much more than it really is. That is natural and to be expected – we normally half the profits and double the capital requirement of anything that gets presented to us. As a rule of thumb, take your first three years of after tax profits projections, add them and that would be a good indicator of the value of the project. If you are completely unrealistic with your valuation investors will just walk away. Get proper advice. 

 

Make sure you have a digital presence

 

One of the first things investor do after a pitch is to do a Google search on the entrepreneur and the company or concept. If you do not have a digital presence, forget it. Get that sorted first. 

 

Network

 

There are many networking sessions in the eco-system. Go to them, be seen, interact and get known. There are always investors that attend these sessions and often they do not disclose that they are investors. Go to pitching sessions: the more exposure, the better the chances.

 

2.Pitching advice

 

Passion, Passion, Passion!

 

An investor, more often than not, will invest in an individual that is passionate about their concept. We have seen 100s of presentations and you always remember the ones that made an impact in their presentations. One can tell whether an entrepreneur is uncertain or completely convinced that their product or concept will make a difference. 

 

Confident not arrogant

 

There is a huge difference between the two. We, as a rule, do not invest in arrogant entrepreneurs. Normally, arrogance breeds a culture of not wanting to take advice. Entrepreneurs that think they know it all are doomed. Be confident in your presentations but never arrogant.

 

Perseverance

 

Do not get despondent! Raising capital is not easy and you will have to try, try and try again. You might have to refine your pitch or change a few things but keep at it.

 

Make eye contact and look good

 

When you are negotiating make eye contact. It sounds simple but you will be surprised at the number of people that do not. 

 

Investors also want to see that you display an element of respect. Do not go dressed in shorts and slops if you want somebody to invest. You do not have to go in you Sunday's best either. Just show that you respect the individual you are pitching to.

 

Have all the answers when you pitch to investors

 

Know the figures, market, competitors and barriers of entry well. All it takes is not to be able to answer a simple question to throw away your chances of getting an investor. If someone has assisted you with the documents, study them well. Know everything backwards. 

 

Conclusion

 

After years of experience, if you follow the above, you will succeed. But remember, there must be a business case. 

 

The key to success is Passion, Perseverance and Patience. The greatest of these three is Passion.

 

We recently launched our own portal to assist in the process of finding an investor. Go to www.tblinvestorsnetwork.co.za for some further free advice.

 

Happy Hunting!

 

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Throughout the years I have met people with great ideas who share with me their willingness to start a business when the time is right. Reasons such as I can't now I have kids at school; I need a better car so I will work for two more years then I will start; I need my partner to be secure in their job to sustain us, when that happens I will start.

 

Years later I meet the same people and still they have not implemented their business plan. On enquiring why not I get the same answer: the time was not right. But what does that actually mean? Is there some reference that state when the timing is right? Does it depend on global markets, or who is in government or does it reflect one's state of mind?

 

The truth is there are no formulas: it is a state of mind. You will always find excuses not to start, always. It takes an enormous amount of courage to take the step and it's not easy and it will never be. If you are going to wait for it will never come. If you're passionate about being an entrepreneur, your product or service will make a difference, and it is relevant, then the time to start is NOW! Not tomorrow, not next week, TODAY! 

 

It all starts with a decision: I am going to start a business. Then an action: take the business plan that you have been delaying and implement it today. Most of the speakers at First365 just did it. They made a decision and went for it. You do not have to have all the answers when you start but when you are in it you hustle till you make it. You have to be on the path. You cannot work everything out before hand and it is impossible to plan for all eventualities. You adapt, hustle, collaborate, engage, network, share and through these processes you adapt your business accordingly.

 

Your business plan is putting your idea down and how you will execute it. It cannot be cast in stone.  I have not met any entrepreneur that executed their idea exactly as planned, not even close. You do have to start with a plan but be prepared to change things as you go along. As the years roll on you deal with the problems, adjust your plan and carry on. If I look at Caban's original business plan, it did not incorporate going global, it just happened, and now we are innovators of the year in London. But once you start you open yourself to all kinds of possibilities and they come to you because you are receptive. You are on the path but key is the fact that you took the step.

 

So, if you are passionate about starting a business, do not wait as there is no better time than now. Once you've finished reading this, take the first step. Go online and search for your company's name, then send an email to an accountant, lawyer or corporate advisor and tell them, "Please register...... for me". You will feel great. Do it now!

 

 

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