Raising enough capital to scale a business is not a walk in the park—this piece answered some of the top questions people ask us about funding their business in 2022.
Securing enough capital is one of the biggest small business challenges.
A study found that 66 percent of small businesses face financial challenges. About 43 percent said that paying operating expenses is the biggest challenge. As a result, several companies have gone down or failed to reach their potential due to insufficient funding.
So, we compiled some of the top questions people ask about funding their small businesses to make raising capital for your company more seamless and effortless. We update this page regularly. So, you can bookmark it and always check back to see what has changed.
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So let’s get started.
Several grants are available to fund your business in Nigeria.
For instance, Tony Elumelu Foundation Entrepreneurship Programme offers $5,000 in non-refundable seed funding for businesses in Africa and other African countries. Also, the Africa’s Young Entrepreneur Empowerment Nigeria (AYEEN) can support your business with up to ten million Naira.
GroFin offers between $100,000 and $1.5 million grants for businesses in critical sectors like healthcare, manufacturing, agribusiness, education, energy, and others. The organization has supported over 700 SMEs since 2004.
Other available business grants in Nigeria are:
- Shell LiveWire Funding
- GEM Grant
- African Entrepreneurship Award
- Innovation Prize for Africa
- Africa Women Development Fund
- Unilever Young Entrepreneurs Award
- African Women Innovation and Entrepreneurship
You can see this resource to learn more about business grant opportunities in Nigeria and how to apply for them.
Read More: 10 Available Business Grants In Nigeria to Expand Your Business
You can get funding for your business by applying for grants.
While securing funding from this source might take some time, unsecured business loans provide your instant cash injection to fund your business. In addition, the funding source doesn’t require you to provide collateral to secure the loans.
You may also raise funds from angel investors. However, it’ll require giving up some equity shares for investment. Nevertheless, it's a great funding option if you don’t mind co-owing your startup.
If you are looking for more funding options, you might want to check out this resource.
Read More: 4 Super-Smart Instant Funding Options to Grow Your Business Fast
Yes, if you want to build a scalable business. No, if you're going to build a lifestyle company.
A lifestyle business is those founders set up to sustain a dependable level of income or provide a distinctive lifestyle, such as the ability to travel, work, or life balance. In contrast, scalable businesses are set up to maximize revenues and develop to their highest potential.
Also, understanding the dark sides of venture funding can help you make a more informed decision, and here are some of them:
- Venture funds mean you’re no longer your boss but will practically be working for your investors
- You might lose control to take your business in the direction you want
- It comes with additional pressure to meet investors’ expectations and milestones
You can check out this resource to learn if venture funding is right for your business.
Read More: The Best Business Decision Ever: Do You Really Need VC Funds?
One small business funding mistake to avoid is overestimating your future revenue.
Some founders whitewash their data to convince creditors. It’s not only unethical; over-representing financial figures can hamper planning, putting the business's financial health at risk. Other mistakes to avoid are raising money too early or too late, not having expert counsel, and not having clear funding objectives.
Underestimating your variable expenses, not accounting for hidden fees, and sourcing loans from multiple sources are some other small business funding mistakes you must avoid.
More information about small business funding mistakes is available in this free resource.
Read More: 8 Common Small Business Funding Mistakes You Must Avoid
