4.3 How do i finance my business?

Economic and management sciences

Grade 8

Entrepreneurship

Module 17

How do i finance my business?

Activity 1:

To discuss the financing of a business idea.

[lo 4.1]

You have developed a business plan for your business idea now and it appears that everything is going to work out well. But have you thought about where you are going to get the money to finance the product development until the sales start generating money?

ASSIGNMENT:

1. Read the following article again. Write down how Slabbert financed his business and what his advice is to other entrepreneurs.

2. Do some research to determine which institutions Slabbert could have approached for financial assistance. Hint: Think further than banks: the South African government regards the development of small businesses as being very important.

An entrepreneur’s story of a difficult start in a grimy butchery

“WORK YOUR FINGERS TO THE BONE”

“My success came after I had worked my fingers to the bone and because I never became greedy.”

This is the secret of Mr Leon Slabbert, owner of the Cuyler Butchery in Uitenhage.

After finishing his schooling, Mr Slabbert obtained a degree in personnel management. He then worked in his father, Levi’s, butchery for ten years.

“My father is a perfectionist and therefore he is very particular about tidiness, quality and service. He taught me all about the select cuts and everything else I know. Thanks to him I am a disciplined person,” says Slabbert.

In August 1988 he decided: “Nothing ventured, nothing gained.” He sold his house and most of his other possessions and bought the Cuyler Butchery , which at that time was grubby and shabby.

Slabbert found it difficult to get loans from the banks, because he had no insurance. Some of his creditors showed him some mercy, but others simply had to wait for him to make enough money to pay them.

In the early nineties the political situation in the country influenced many people and businesses and Slabbert had to keep his head above water despite various threats. “In the first

five years I just had to do crisis control most of the time to keep my business going. Competitors didn’t make it any easier for me to get my business to grow, and I had to do everything in my power in order to survive,” he says.

“Those were difficult years. I started with three staff members and did all the administration, daily chores and cutting of the meat. I had to make the sausages on my own. I also scrubbed the floors.

“I did not even have a proper cash flow that I could use for change and a friend lent me a lorry with which to transport my meat. A car was out of the question. There was no money for petrol and I had to walk to work. My wife, Wilhma, was the owner of a hairdressing salon and she also had to work overtime to get her own business going,” says Slabbert.

His wife is now a director of the butchery and owns shares in it.

“Besides being in control of the administration of the business I am involved in every aspect of the butchery, from washing floors to cutting up meat.