Self-Devpt. Nuggets™

This article offers you a unique opportunity to access practical wisdom shared by a successful entrepreneur about raising startup capital. It is based on my handwritten notes, from a seminar I attended in the year 2000 (24 months before starting my own business).


From my undergraduate days I have honed my skill at taking near verbatim transcriptions of speakers’ utterances! Even clients often compliment me on my knack for documentation.

In addition to the actual notes I took from the seminar, I have also included REAL-WORLD relevant comments and annotations on the subject discussed, by drawing from my 10 years of experience in applying the ideas in starting/running my own business in Nigeria!

The seminar was titled “How To Start Your Business With Little or None of Your Own Money” and facilitated by seasoned entrepreneur I will call S.O.

This article treats one of ten principles explained: “How To Get Other People To Give You Money To Start A Business (ONE Big Mistake You MUST Avoid)”.

It is instructive to note that this veteran entrepreneur told the personal story of when he started out in business, to explain to us the concepts he wanted us to understand in order to increase our chances of succeeding.

S.O told us that between December 1983 and January 1984 he read two of Napoleon Hill’s books – “Think & Grow Rich” and “Positive Mental Attitude”. What he learned from them prepared him mentally for the journey he planned to embark upon into the world of self-employment/business.

In February 1984, he had no one to give him money to start his own business even though they had it.

It took a while, but eventually, based on hind sight, he discovered the main reason why no one seemed to want to give him the money he needed.

It was due to a mistake he was making. Simply put, he was NOT addressing the issue of WIIFM translated to mean “What’s In It For Me?”

So he spoke a while to us on “How to get other people’s cooperation”.

Basically, S.O explained that you have to think of the interest of the other person. Ask yourself – “What do I give in return for the money?” and /or “How will the person giving his money get it back out of the business?”

In March 1984, he decided to put his idea of starting a business of his own on the back burner.

However, the decision by his then employer – a newspaper company (where he worked as editor) – to implement a 25% cut on staff salaries forced him to revisit the idea and eventually put in his resignation.

So, he converted his assets (mainly 6 professional cameras he used as a career sports journalist) to cash.

That got him N4,000.00 (Four Thousand Naira). Note that this was a significant amount of money back then in 1984!

S.O then went to an older friend/mentor, who without asking any questions gave him a N2, 500 cheque.

Summary

My experiences in trying to get money in my startup years, confirm S.O is right. Without offering WIIFM answers, people will either NOT help or they’ll STOP helping.

So, when you start planning to start your business, take time to THINK of useful benefits you will offer to those you intend approaching, in exchange for the capital, money or funds you need them to give you.

You could offer them a stake in the business – equity. Or promise to pay back at an interest rate attractive enough to make them feel justified in taking the risk to invest in your idea.

While making your offers and promises, be RESPONSIBLE – do not exaggerate the possibilities, and DO tell let them know the risks involved, as there will often be that chance that your idea might not get up and running instantly:-)

Very rarely will people be prepared to part with significant amounts of money, if they have nothing to gain in return for doing so. Cater to that identified need in people, and you WILL get ready cooperation from them most of the time.

NB: This article was first published in 2011