Determine the seed capital you need to launch your venture
PHOTO | FILE Accumulate capital and come up with a plan as you will not be able to launch your business without seed capital and a master plan to guide you.
What you need to know:
- Whether you want to farm or venture into the transport business, the procedure is generally the same. You have to work out the working capital you will need to operate the business for the first months as profits will rarely be generated at the beginning
- You will need financing to meet legal requirements, hire employees, rent or build premises, and cash reserves for contingency in the event of the unexpected during the launch
- You can seek the services of an expert to do an analysis using cost accounting techniques to determine the financial operating conditions at which you will make a profit, break even, or suffer a loss
Last week's question: Where do I invest?
I am a 43-year-old man in good employment. I am at a loss as to what kind of business to start to generate money to support my family.
I was thinking of buying a 14-seater Nissan Caravan from Japan to start a matatu business, but someone told me that the government is not issuing public service vehicle licences to 14-seaters anymore.
Should I consider farming, though I do not have a piece of land, or should I start a firm that imports cars for sale? Please advise.
Symon
Everything that is was once not, and every successful business was once an idea in the mind of an individual or a group of individuals. The fact that you have the urge to venture into business is a positive start as it is the beginning. My first question, though, is how much have you saved as capital?
If you have not saved anything, postpone the idea and accumulate capital and come up with a plan as you will not be able to launch your business without seed capital and a master plan to guide you.
Whether you want to farm or venture into the transport business, the procedure is generally the same. You have to work out the working capital you will need to operate the business for the first months as profits will rarely be generated at the beginning. You will need financing to meet legal requirements, hire employees, rent or build premises, and cash reserves for contingency in the event of the unexpected during the launch.
For any business you wish to venture into, you must do a budget before you start. You can seek the services of an expert to do an analysis using cost accounting techniques to determine the financial operating conditions at which you will make a profit, break even, or suffer a loss.
Putting many factors into consideration and doing a prudent budget, you will now be sure whether you are ready to venture into the investment. Different forms of businesses have unique features but when it comes to the financial analysis, it all synchronises into a uniform approach.
With this short advice, I do wish you success as you plan to become an entrepreneur.
Francis Sang
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