Seeking financing? What you need to do

Art pieces from House of David

David Chege, 30, is the founder of House of David, a company that turns used wine bottles into beautiful art pieces.

He recently took his business into KCB Lions’ Den looking for investment to expand. His pitch worked, and he walked away with Sh1.5 million in exchange for 25 per cent of his firm. Here, he shares tips on what entrepreneurs seeking financing should keep in mind.

1. Have a plan

Even before KCB Lions’ Den show came through, I already had a plan for the money, and I knew how I’d spend it when I got it. When I came up with the idea of decorating the wine bottles I saw lying around my neighbourhood, I drew up a business plan. In it, I put down my expansion goals. Without a plan, you’re going to do things haphazardly and waste a lot of time doing the same things over and over.

2. Target new markets

When you’re starting your business, you’ll likely identify a market and then come up with a budget that allows you to reach it. When you’re seek financing, you need to be eyeing the next level. In my case, I’m targeting the high-end market, which means finding new locations nearer these customers and also using raw materials that appeal to them. If you’re able to raise funds – whether from investors, banks or your family – make sure you don’t use it to do the same old things. Do something different that boosts your business. At House of David, we’re constantly trying to create new products that are environmentally friendly, African inspired and original. We want to tell the story of Africa’s traditions and culture.?

3. Tighten your financial planning

You can’t afford to be casual about other people’s investment in you or your idea. You owe it to them to be prudent about what you spend money on. Make decisions that will grow your business, not make you look better to your peers. Invest in marketing and promotional activities, new stock and more convenient premises. Avoid using the money on buying a fancy personal car or setting up in an upmarket location that won’t draw in clients.

And if you haven’t already, put a system in place that tracks your expenses and spending. Know where every single shilling your business generates goes.

4. Prioritise customer interactions

Form the habit of going to your customers, rather than waiting for them to come to you. If you have a website and catalogue already and are utilising social media, set aside a budget that helps you embrace a more physical approach.

Social media will bring you silent followers – I call them silent clients. They’ll help spread the word about your business, but they won’t necessarily be the clients that buy what you make.

Take a day off your schedule to meet with your clients – maybe make some deliveries yourself or set up a stand at sales events. This will expose you to the kind of feedback that helps your business grow.

5. Pay it forward

Many entrepreneurs, when they get the funding they’re looking for, tend to relax and get comfortable. But this is the time to put in even more effort into ensuring your business reaches its potential. After all, you need to make repayments or pay dividends to shareholders. And you need to invest in others – there’s no joy in making it to the top by yourself.

With House of David, I invest in young creative minds and mentor them to help them create their own sources of employment. Do your best to positively impact other entrepreneurs in ways similar to what others have done for you.

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