Financing that small business idea is a major hurdle many face when the opportunity comes to kick start the vision. As it is true that, having passion for the business is essential, one needs to answer the funding question.
In our TSH Facebook Community, members attempted to answer the financing question of a startup owner. The following are the solutions provided. Note: Some of the solutions are overlapping.
1. Readiness for opportunity
“Funding can be tricky. Either you save money to pursue a dream later, or you fine tune your plan to present to family members or friends or contacts you meet at networking events. There are people with money who are open to the idea of being part of a great idea. So just make sure you’ve worked out the amount you need and how much you’ll make after a period of time. There’s no science to getting it. Just readiness and opportunity and chance.” – Augustine Gyimah Osei, Co-founder of G.Force.
2. Friends and families
“If he pitches the idea to friends & family, he would be amazed by the amount of capital he can raise. It’s easy that way because there are no strings attached.” – Dilly Gordon Churchill, Founder of Startup GH.
3. Form partnerships
“In mobilizing for capital to start a business, you need to know how much is required for that business. Once that is done, you then look at the opportunities available for you. You may start with your own savings, donation from friends and families. You can also partner with someone who has the money. You may have the idea but somebody also has the money, you need to partner that person to start that business.” – Desmond Hortor, Student Entrepreneur.
4. Start with the little you have
“Most importantly, we always advise that startups understand that the corn is just a product of a seed. You can always start with a mite that has the potency of growing to be mighty for example, as a startup. Why do you borrow to publish 5000 books in stock while you can work on a few, sell them quickly and reprint. So while you hop around telling your vision and story to almost everybody in the name of sourcing for startup funds, start something with the little, and all other funds shall chase you.” – Sam Rhema, CEO of Sam Rhema House.
5. Personal Saving
“I think the best way to raise capital for startup businesses in Ghana (Africa) is by saving for sometime or requesting some money from family or friends. Then re-invest your profit into the business, talk of SMEs and also cut down on expenses.” – Gamel Adam, Founder of Gamel Clodin.
You can join the conversation by providing your own solutions to the funding question for small businesses.
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Source Beauty is pushing the boundaries of Egyptian e-commerce
Egyptian e-commerce: the county’s digital drive has not yet gotten to the growth typically seen in European countries and North America. However, as businesses have started shifting online, customers are now following suit, resulting in the gradual development of the digital eco-system.
Innovation, such as digital marketing, is reinventing the consumers’ path to purchase. The Egyptian e-commerce market is expected to grow at a rate of 33% annually to approximately $3bn by 2022, according to Oxford Business Group.
Source Beauty and disruption
The increase in e-commerce comes from rising internet penetration rates, driven by connected and digitally savvy millennials. Several platforms, both locally and internationally, such as the direct-to-consumer beauty platform Source Beauty, have disrupted the beauty industry in the region to drive their growth by truly connecting with their customers.
By being aware of the changing consumer behaviour trends in the e-commerce landscape, service providers like Source Beauty are continually fostering customer engagement with a community they have created. The customer service team, along with the editorial and marketing teams, respond to each comment and direct message, making customers feel listened to.
Lydia Schoonderbeek, the founder and CEO of Source Beauty, said:
“Egypt has traditionally been a price-driven market. After devaluation and high inflation rates, people have become much more price sensitive. People are consuming less and are shifting away from imported products due to price, accessibility and inconsistency in supply. As a result, they’re looking for local alternatives.”
In line with its digital transformation and financial inclusion agenda, the Egyptian government has set in place directives to raise the limit for electronic payments for individuals via mobile phones to EGP30,000 (USD1,905) per day, and EGP100,000 (USD6,350) per month, since March 2020. Traditionally, 70% of online purchases were cash on delivery, which has proven to be a major challenge to e-commerce growth throughout the region. This preference has changed to credit card payments, increasing to 30% from 16% due to the spread of Covid-19, but it remains to be seen whether purchasing behaviors will be affected in the long term.
The CEO of Source Beauty further added that, the company had seen substantial growth thanks to the COVID-19 global pandemic, with existing and new customers wanting to limit in-person beauty services and adhering to social distancing and mask-wearing requirements. Beauty customers, she says were changing spending habits, moving towards products that allow them to recreate the salon experience in their homes and protect them from the potential impact of an increasingly digital lifestyle. Finally, she believes they have seen customers prioritising skincare and haircare purchases over makeup.
The question is, ‘Is anyone in Egypt going to buy beauty products online?’. Who thought people would buy books on the internet from a website called Amazon! Well, the answer seems to be YES. Consumer spending in Egypt on non-essential goods has reached EGP 3.90bn in 2020 and is set to reach 8.81bn in 2021, according to FitchSolution’s 2021 Report.
According to the Egyptian e-commerce beauty company, Source Beauty, it believes that the world is in an era where consumers are looking to associate with brands and not products, to make their beauty purchasing decisions and this is where homegrown brands like theirs will doubtlessly lead to economic growth in Egypt.
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