NAIROBI, Kenya, Aug 20 – A great idea doesn’t cost a thing, but turning it to a successful business is the hard part.
Entrepreneurs find themselves between a rock and a hard place putting great ideas into successful businesses thus they turn to pitch ideas to investors to procure funding.
“Many good business ideas and startups fail to get funding because of a poor presentation when pitching the idea and entrepreneurs must learn the art of packaging their ideas for funding,” Rafiki Deposit Taking Micro Finance Chief Executive Officer Daniel Mavindu told Capital FM Business.
Mavindu said that passing investors the ‘smell’ test takes more than just a great idea, and getting your model to look right for investment forces investors to think bigger than just the common.
“Entrepreneurs have to remember that investors are using their own money, to help your business and also for them to make money, so you have to make your idea very clear and winning,” he said.
Financial institutions find it hard to consider extending loans to startups as no securities would warrant the repayment or fine subject to breach of contract or failure to fulfil given conditions.
Mavindu said that most startup presentations are poorly written and urged entrepreneurs to access professional help when pitching the idea.
“There is a lot of funding for startups, many investors will invest in an idea that is well put down hence entrepreneurs need to leverage on this,” he said.
He said that it’s also important for startups to get mentors to help them achieve their goals.
The Youth Enterprise Development Fund Chairman Gor Semelang’o says over 60 percent of proposals received are rejected due to poor presentation skills.
“It’s a worrying trend since the money is available but it’s hardly utilised. Most of the young people don’t know how to write winning proposals, and we need to go to the grassroots and train our young people if they are to benefit from this resource,” Semelang’o said.
He revealed that the Fund is rolling out a three-day training programme soon in every constituency to train the youth and women on how to write proposals and basic entrepreneurial skills ahead of the Uwezo Project.
He revealed that in the Uwezo Fund only youth groups will access the money. Individual enterprises that will access the money must be in group frameworks.
The government has put in place the Sh6 billion Fund to support youth and women enterprises across the country.
The Fund dubbed Uwezo Fund, will be channelled as interest-free loans as start up capital for small and micro business of varying amounts not exceeding Sh500,000.
Only a three percent one-off administration fee will be payable for each loan.
The Uwezo Fund additionally aims at supporting youth and women to leverage on the 30 percent government procurement preference for youth, women and persons with disabilities.
The resources under the Uwezo Fund will be disbursed directly to beneficiaries through the Constituency Development Fund framework, under the administration of committees that have been established at each constituency, she said.
Besides the relevant Member of Parliament, the committee will comprise one youth and women representative each. In addition to assessing applicants’ business plans and granting loan approvals, the committee’s role will include monitoring use of the disbursed resources to ensure accountability.
The youth are advised to develop sound business plans to enable them access the Fund and urged to strive for social accountability when granted the loans.
According to the Institute for Social Accountability National Coordinator Wanjiru Gikonyo, the Uwezo fund needs policies that will see the youth reap from the Fund.
Gikonyo says it’s not Just about writing presentation skills but the whole model.
“We cannot just dump money on the youth, we need to educate them about business if job creating is to be realised,” she said.
In an interview with an online magazine – Enterpreneur.com, Virgin Tours Chief Executive Officer Richard Branson says that when pitching your idea, you’ll need to be able to convince the entrepreneur that your business will be game-changing.
“How do you make your pitch stand out? If your idea really is ground-breaking, try to make your pitch just as innovative, Lots of people have good ideas, and sometimes unique delivery can make all the difference,” Branson said.
Branson says that entrepreneurs need to explain how their new business will make a difference.
He says entrepreneurs need to show off their expertise in a personable way, highlight their experience and their team’s strengths, and ground their idea with simple, realistic messages.
“Do not use jargon. Most importantly, pitch quickly. You never know – the person you are pitching may have an elevator to catch,” Branson advised.
There are 7.5 million Small and Medium Enterprises in Kenya according to the Kenya National Bureau of Statistics (KNBS).
The sector’s contribution to the gross domestic product has increased from 13.8 per cent in 1993 to about 40 per cent in 2008.
The sector provides approximately 80 percent of employment and contributes over 92 percent of the new jobs created annually (KNBS).