“Access to capital remains one of the hardest parts of starting your business,” says founder and CEO of ProfitShare Partners, Andrew Maren. “But without it, the greatest idea on earth won’t fly.”

Being in the business of assisting SMEs to get up and running financially, Maren says one of the cornerstones of ProfitShare Partners is creating pathways to capital access that are affordable and equitable. Here, we’ll take a look at some of the sound advice offered by various institutions.

In a brief published by the Centre for Strategic and International Studies (CSIS), Daniel F. Runde Senior Vice President; and William A. Schreyer Chair; Director, Project on Prosperity and Development; and Director, Americas Program write: “In the developing world, SMEs make up 90% of the private sector and create more than 50% of jobs in their corresponding economies.

“In Africa, SMEs provide an estimated 80% of jobs across the continent, representing an important driver of economic growth.

“Small and medium enterprises (SMEs) are the backbone of the world economy, accounting for most businesses across nearly every region,” they assert.

“Sub-Saharan Africa alone has 44 million micro, small, and medium enterprises, almost all of which are micro. For these businesses to grow, create more jobs, and generate economic growth, they need access to capital. 51 percent of these vital businesses, however, require more capital than they can currently access.

“Credit constraints are a serious challenge for SMEs. Without reliable sources of working capital, SMEs are unable to make the investments needed for growth, leading to stagnation. Given the importance of SMEs as a source of employment, barriers to accessing financing become barriers to poverty reduction and economic growth.”

Where to begin

Noting this information as a backdrop to the importance of SMEs, Maren suggests starting by taking the following steps:

  • Work out exactly how much capital you’ll need
  • If you can self-fund your business, do so
  • Seek venture capital from investors
  • Crowdfunding has worked for many start-ups
  • Apply for a small business loan

Maren suggests having a qualified financial professional – or at least a mentor who has set up a successful small business – to walk you through all stages of your start-up journey, particularly with regard to money.

“Keep an eye on funds offered by the government, such as The Department of Trade and Industry. Approach the smaller banks and the fintech firms that offer capital access. Don’t lose steam – maintain enthusiasm for your ideas and your new business, and when you get that cash injection, you’ll be ready for takeoff.”