How do I save and invest in business? BY DANSTAR FROM Y-SAVE.

Among the many things the pandemic has brought forth, are questions surrounding the need for financial sustainability. The questions of how can we comfortably navigate the numerous unending lockdowns that have been put up by the pandemic. Today we are here to answer your questions, we brought you Danstar from the Y-save foundation and organization that is a business and financial consultancy and they have for a while been advising businesses and individuals on the right ways of saving to investing.

What resources are we talking about? 

There is a common claim of absence of capital to start investment. In this case the resource we shall dwell in are two the individual, and the money or capital.

  • An individual is the first resource. Your head, yourself are the first individual. The ideas begin with you, and your brain. However, there are scenarios where one person links up with a group of other individuals to come up with better ideas and information for the different things they are partaking. The first resource is an individual. Who bears the idea, and enriches his learning and understanding through research, and sharing with reliable sources, like human resources to give you the experience of those they have acquired over time. The individual and human resource are the first things to consider. However always consider the element of trust. 
  • Money. Do you save. Make it a habit that every time you get money you get off some percentage to have it saved. Where do you save, there are very many instruments and tools for saving? Banks unit trusts and investment clubs among others. Today I would advise people to get more into the unit trusts this is because they provide and calculate savings daily.

What other channels are there for you to raise resources for your business?

  • Your family and friends.
  • Donations and grants from people who are not necessarily your friends or family, but are ready to donate to your idea.
  • Proposals and research. 
  • Partners. By partnering with other people they help inject money into your business/ idea so as to gain and you get your business growing.
  • Selling of your assets. Like land a car, among others

Another channel is through donations and grants. Many people can get through their businesses by borrowing money form money lenders. However, it’s not advisable to start a business on a loan. In other cases, you may have to partner with other people in order to get the business. There must be a very big element of trust in a partnership. Do not partner with people you don’t trust.  

Your family members and friends can as well be a good source of money. They can give you money that you are not going to refund back. They are a good source of startup resource. Whenever you get the resources start small and begin growing your business whenever you grow. Minimize costs especially fixed costs.

Others consider proposals and request for grants to start their businesses. These are the ways in which you can also get resources from the people who are not necessarily your family members but they can provide you with the money through looking at your proposal.

How do you get a profit oriented entrepreneur to start investment?

You start a business to meet a need, when you meet a need then the profits will come., secondly do not put all your eggs in one basket. In other words, have many places or areas where you can gain profit from. Have more than one place where you know you are gaining and reinvest in something else. 

The money that you gain from your business should be in position to help you grow and invest in another business besides the one you are prospering in. through your research and human resource, think of other areas where you can profitably reinvest.

Which funds are you telling the entrepreneurs to re-invest from? 

Using my personal example, my wife imports and sells clothes, assuming she used 2 million to import that is capital. After selling them you have 5million, made a profit of 3million. There are two options.

  • You can either use your profits to reinvest in your business. For example, increase your capital from 2million to 2.5million. and then use the rest to save and facilitate your expenditure.
  • Or You can as well decide to still save your profits and reinvest the same initial capital for your business, and when your business continues accumulating profit then you can start another business out of your savings from your profits.

As a concrete rule for saving “It’s very important to have or save 20% of your business profits” sometimes others say at least 30% of your profits. You can only achieve this by daily track of your inventory or stock from your business. 

At what point does a business owner know that they have arrived the time to start another venture or another business? 

Assuming everything is constant, meaning you have been saving amidst your profits and returns. You need to make research. It goes back to the human resource, you need to make research on how much you need to start another venture, you need to know what it takes to satisfy a need, in the community. So after analyzing these facts and critically focusing more onto what and how you can reinvest.  Then you set out your boat to start reinvesting and start up a given venture basing on your research.  It’s just unfortunate that these are hard times and research made during this time, you may not make conclusive research.

Where are we investing our money after saving and when an individual is investing is it the same as a business investing?

  • Businesses and money and finances are based on principles.
  • As a golden principle, you should invest in something that you understand. Never invest in something that you don’t understand.  Then you should also invest in something that you are passionate about. Something that you love doing.   You want to invest what do you have to look at it.
  • You must be saving consistently.
  • Look for the investments. How something that you love, something that you are passionate about. In other words, something that will work for you may not work for your friend. 
  • Seek for advise on things that you love to do and you are passionate above.
  • Never invest in unfamiliar businesses. Don’t move with the band wagon you may end up where you don’t want to.
  • Avoid those investments that bring you extraordinary profits. It’s a pointer to what the level of risk it is. High risks high returns and high losses. Be prepared for all these.

How do you decide what to invest in.? 

  • What are you passionate about, what do you know about that venture? Then you move into the matrixes. Your investment portfolio.  You have to keep monitoring your loans, your expenditure, and your must have the discipline to realize that every other part of your finances should not exceed that limit you set for yourself. There are set limits like, loans should not exceed 70% of your total income etc.

What can we entrepreneurs do when such times as the COVID 19 pandemic came through?

The best way to protect our businesses in such hard times, is for it to have a backup plan. That goes back to saving. It’s the only way of being resilient in your business. 

In conclusion.

  •  Never resign from your job until you know and you are sure of where you are going. Its rather better to think of your job as going away tomorrow and that means the saving culture kicks in. keep saving and preparing yourself for the time where you have actually lost the job. 
  • We save money because we need to survive in future, just start now and you will not regret