SME Growth Champions Seminar Presentation on Finance

Transcription

1 Presentation on Finance

2 Content 1. Introduction a)who is Precious Mvulane? b)about GAD Consulting Services Inc. 2. Agenda for today 2.1 Finance a)issues facing investment into SMEs including the cost b)access to blend of venture capital and debt finance c) Business Assets - Finance and Assets d) Venture Capital

3 Introduction to Precious Mvulane Precious is the Founder and Managing Director of GAD Consulting Services Inc., referred to as GAD. She is a chartered accountant and registered auditor affiliated with SAICA and IRBA respectively. Precious has 15 years experience in the field of finance. She has served on several organisations within the Public sector were she currently sits on 4 entities and chairs two of these entities. Author, Auditor and Coach in finance.

4 Introduction to Precious Mvulane Awards obtained: Selected as top 15 Changemaker for 2013 by Spark International Inc. Awarded the Small Business Champion Awards South Africa 2014, Woman in Business 2nd Runner Up Nominated as one of the finalists for the Women-Owned Business category hosted by SA Premier Business Awards 2014/2015 Listed as one of the Best New Businesses under the Best New Business Category for the 2015 South Africa SMME awards hosted by the AFRICAGROWTH INSTITUTE.

5 . SME Growth Champions Seminar 2015 Precious is the Author of The Essential Finance Handbook for business owners 7 basic steps to manage your business financial performance, aimed at empowering business owners to manage their business financial performance. The book has been featured on the following media publications: SAWUBONA TRUE LOVE

6 Introduction to GAD Consulting Services Inc. GAD Consulting Services Inc. referred to as GAD. GAD is an accounting and compliance firm, that aims at empowering and educating business owners in each interaction. GAD specializes in accounting, financial management, governance, advisory services, training and mentoring for small to medium businesses (partnerships, sole proprietaries and private companies). We are an accredited training centre for South African Institute for Professional Accountants (SAIPA) and an approved employer by Association of Chartered Certified Accountants (ACCA). Services Offered: Accounting, Payroll, Taxation and compliance Training and development Coaching and Mentoring

7 Finance Issues Debt, Credit and Asset management a) Debt Management Strategies For small business debt exposure is too high, they offer their services for credit yet they buy for cash. Key issue: Offer on credit but ensure that the Terms and Conditions you have are enforceable. How to deal with issues Terms and Conditions 1. Check your biggest competitor or listed company in your industry. 2. Get a mentor in your industry 3. Buy legal templates documents 4. Employ a lawyer to draft your agreement

8 For new clients, get 50% deposit before you start or submit the work Have Debit collection procedures 1. Monthly invoices 2. Send statements 3. Call for payments Do credit checks and request directors information on any judgements. Get debt insurance, e.g. Credit guarantee, Alliance Hand over debtors for collection when they are due

9 Review of performance of your debtors i.e. using age analysis Ceding the debtors to the bank or suppliers Charge interest on overdue accounts. b) Credit Management Strategies Key Issues: 1. As small business owners you have no negotiation bargain chip, your units are too small to negotiate and irregular. Terms are set for big guns. 2. You have no credit history with suppliers

10 How to deal with credit issues 1. Keep your personal financial records clean as a director, no judgements. Do credit checks 2. Procure for the whole period e.g. a year but delivery is on a regular basis ( the lead time is key) 3. Create relationship with credit manager. 4. Honour your commitments if you are unable to pay, please notify credit manager. 5. Negotiate in all items not quantity (Volume), timing, delivery and payments 6. Ask if they do have an ED unit, find out if your company cannot be part of the that. 7. Procure from other small business, you have more leverage than big business

11 c) Business Assets - Finance and Assets Key Issues 1. No capital or proof that you will be able to pay back for the assets 2. Business owners don t calculate return on investments on the assets they acquire How to deal with the issues 1. Do return on investment calculations e.g. R capacity- produce R over 3 years value or return 2. Get asset finance, know your industry finances 3. Watch usage of the assets and charge clients to ensure you recover your costs 4. Before you acquire do lease vs buy analysis including operating costs such as insurance, drivers, maintenance etc. 5. Look for unconventional resources e.g. angel investors, stokvels etc. for funding

12 d) Venture Capital Issue 1. Not enough venture capital available in South Africa but this has improved over past few years How to deal with these issues 1. Angel investors Investment network, Grovest 2. Enterprise Development Programmes 3. Entrepreneur programmes e.g. Branson Centre, Spark International, IDC, Jobs Funds Ventures.

13 What you need to do? 1. Business plan with straight forward business model that is viable (proof of concept) 2. Focus on solving a problem that is big and not solved by anyone else years investment timing Easy to do Enter competitions to attract investors to your business and brand

14 Q & A GAD Consulting Services Inc. Prepared by Precious M.K Mvulane CA (SA), RA Cell: +27 (0) Fax: +27 (0) [email protected] / [email protected] Web: