Start-up capital, a herculean task for aspiring business women

Start-up capital refers to the money that is required to start a new business, whether for office space, permits, licenses, inventory, product development and manufacturing, marketing or any other investment.

The money can come from a bank, in the form of a business loan; or from an investor, group of investors, or venture capitalist(s), friends and family and even personal pocket.

In the case of a bank loan, the business will be expected to make monthly payments to settle the debt plus any interest and/or fees.

In the case of an investor, he or she will negotiate to provide that start-up capital in exchange for a certain stake in the company.

Ajaero Tony Martin, CEO of Firefly Technology, said raising capital is one of the major business challenges faced by entrepreneurs, especially when starting a business from scratch. It is easier to raise capital as an established entrepreneur than to raise capital as a starter.

“Now there may be times when you try to gather some money for your business, for example, by selling some of your assets or taking a job but the cash just won’t add up. There may be times when your family and friends are not willing to give you the money you need. Times like these could be very frustrating, but successful entrepreneurs never bow to frustration. So, you have to find a way to work things out.”

Although the economic prosperity of most women in Nigeria is determined by their husband’s status or economic position, they have begun to break themselves free and own their own ventures.

The role of women entrepreneurs in economic development has been on the rise, but many suffer setbacks in their business ventures, unlike their male counterparts.

There are many factors responsible for limiting the progress of women entrepreneurs. One of the challenges is lack of capital to start the business and expand.

Ofa Ndifon who owns a boutique in Abuja started her business with over a million naira which she sourced from her savings and parents.

She said: “I had nursed the idea of starting a boutique but the fund to start with was the issue. I knew my savings will not be enough so I asked my parents to help me. They agreed but insisted I must bring my business proposal to them first.”

She said they wanted to be sure she understood what the business meant and the challenges involved before they could support her.

Mrs. Aisha Suleiman who went into fish farming some two years ago, started with her saving of N380, 000.

“I wanted to make something extra apart from my salary and I developed interest in fishery that will not take too much of my time” she stated.

The quantity surveyor also added that the cost could only provide 2,000 juveniles which were what she started with.

Mary Dogara who is a seamstress told Women in Business she started with just N200, 000.

The mother of four said she couldn’t afford to get loan from the banks because she was scared of interest rates.

“I planned to start with, at least, three sewing machines and one designing machine but after paying for rent, I could only afford a sewing machine,” she said.

Mrs. Dogara said she did not want to go to banks to ask for loan because she had a personal experience where her sister picked a loan from one of these banks and she kept repaying up to a point she did not understand the payment system anymore.

Mrs. Rose Agwai who operates a laundry business said she started her business with less than N10, 000, adding that waiting to have the required capital to start a business is not the best thing to do.

She said: “Laundry is a capital intensive business but one can still start with small capital. I started with that little because I needed to start doing something urgently to keep me busy and also fetch me money. The money was what I used to get the immediate working materials that I needed and the story has changed today. This place is a standard laundry business today but we did not start like this.”

Mrs. Esther Adeleye, a horticulturist, said thinking of start-up capital can sometimes be discouraging, adding that most businesses today, especially her kind of business, flower planting and landscaping, is capital intensive.

She said the most important thing is to put other things such as a good business plan, environment and social strategy in order and the start-up capital problem will be solved.

“If you have all these in place, even if you do not have the cash at hand, you will see people that will invest in you. For me, I did not take any financial loan but family loan has really helped because they saw my business plan and believed in everything I planned to do.”

Oluwadara Adekunle of DAHRAH Global Limited in Kaduna, said money is essential to start a business.

“Yes, you need money to start but the amount of money is variable. However, putting the timeline for starting your business at the mercy of someone or an investor to give you money before you start may not be the wisest thing to do. You can employ the lean start-up methodology, build a minimum viable product (MVP) and start testing your idea in real life.”

She said there are many resources available for free or for a test period online, you can design a website/ blog, set-up social media channels free of charge and start marketing.

How to get start-up capital: - Personal saving, family and friends, credit, loan from a bank and loan from a related-business or government organisation.