Funding advice for a mouthwash entrepreneur

Nov 26 2015 09:06

Cape Town - Having a business idea is one thing, but implementing that idea can be a huge headache.

One of the major hurdles potential entrepreneurs face in making their ideas work, is a lack of funding.

A letter for advice from Fin24 user Paul M has again underlined this problem.

Paul M writes: "Please advise on my business. I package mouthwash refresher sachets, but the challenge I have is that the Medicine Control Council wants me to register the mouthwash and pay registration fees of over R54 000.00. I cannot afford this. Please advise what would be the best way forward."

Small business growth specialist Anton Ressel, who consults for SME incubator Fetola among others, gives advice:

Thanks for your query, your concept sounds like an interesting one. There are some government and other incentives that may be able to support you if you can make a case that your concept is solid, has job creation potential and is an original idea. You can find many of these at www.investmentincentives.co.za.

Another alternative is to seek angel investment - you may find an investor with existing interests in the dental/medical field who would be keen on an idea like this and would front you some cash in exchange for a stake - you can look at sites like Angelhub, Investmentnetwork.co.za or Business Partners for this.

As a final option, if you are really convinced about your idea, start hustling and approach friends, family and others in your circle who may be interested - you could for example offer 5% for every R10 000 invested - this way, you may end up having to give away 25% - 30% of the business in exchange for the start-up capital you need, but 75% of something is better than 100% of nothing.

Finally, you will need a lot more than R54k to get your idea into market - have you budgeted for the capital you will need to create effective market penetration and distribution impact?

Hope this helps!

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