Running On Empty – What To Do When Funds Are Low
“It sounds interesting. I must state upfront though that we are unable to provide any funding for this project …” This is an email that many entrepreneurs would have received at one point or another.
It’s understandable. South Africa is currently in a recession. Our GDP growth rate was actually negative in the first quarter of the year.
If you are looking for support for your next project, you can expect a rejection before you have even asked. And it’s more difficult for creatives. The road from being an entrepreneur to achieving growth is more challenging in the creative industries than for entrepreneurs in any other sectors.
This is why I, together with Mvuyo Ngqulana, went the ‘in-kind’ support route rather than only ask for financial support when we launched South Africa’s inaugural Creative Business Cup this year.
The Cup is an international competition under the Global Entrepreneurship Network banner and is a featured event of the Global Entrepreneurship Week (GEW), South Africa. The local final starts on 31 August 2017, and celebrates the work of creative entrepreneurs and promotes creative industries worldwide.
The decision not to ask for funding takes a radical mind-shift. Usually, it would not be possible to put together an event of this magnitude and complexity for anything less than R2 million, which would cover the venue, marketing, catering, equipment hire and management fees alone. Then there is the airfare for the winner to attend the international final in Copenhagen, Denmark.
Conventional wisdom says: if you can’t raise R2 million, you can’t run the event. But that’s not necessarily so. There are other ways of meeting your needs.
There could be businesses within your network that focus on the very resources that you need. Ad agencies have an in-house social media department; consultancy firms employ management experts; finance houses have PR divisions; airlines reserve seats for promotional purposes; and caterers over-cater just in case.
But how do you access these companies? The answer is networking and hustling. Two things that all entrepreneurs should be masters in. You do know someone who can introduce you to the decision-maker at a media house. You also have mutual connections via LinkedIn with people at the consultancy you may want to contact.
What about the possibility of getting a ‘no’? Well, entrepreneurs are also accustomed to rejection. Just because you know someone who knows someone, doesn’t mean that you will have their ear. You still have to hustle and persevere. Firstly, they don’t know you or they can’t – or don’t want to – help you.
People are used to fending off requests for financial support so you will catch them off guard when it’s not money that you want. You still need to frame your pitch around your USP and your value proposition. Why would they support you? And what’s in it for them?
Even though there is no money exchanged doesn’t mean it will be free or easy. Managing your support partners’ in-kind contributions is more difficult than spending their contribution. They won’t always do what they’ve agreed to do, they’re not used to integrating large scale favours into their routines and job schedules.
And you are not just project managing yourself. Your support partner’s priority job will bump off your critical process at the most disastrous moment, and others will renege just when it is impossible to replace them. Lots of Valium!
In-kind support is not an alternative for the faint-hearted, but it is a way to get a project done with less funding.
About the author: Rick Ed at age 60 sold his business to a younger and more energetic management team. He now educates entrepreneurs on strategic decision making and sales. Rick is a business advisor at DoBetter.Business.