My first major business venture was in the manufacturing of plastic bags and plastic juice, water and milk bottles. I was in my twenties. I put together a convincing business plan with financial projections. I addressed every question that a bank could possibly ask in the business plan. I even gave them all key financial ratios. I requested R2.8 million to purchase equipment and offered to repay over 60 months, straight term loan on a monthly basis. I then requested R400,000 in working capital finance. I offered the equipment as security and offered a guarantee from an institution. Whilst waiting for the bank to give me a ney or yey on my application I received a cheque book from them through the post on a Friday confirming opening of the business account. Meanwhile a white Afrikaner engineer who was mentoring me on plastic technology asked me to join him to an auction on a Saturday where several machinery and equipment were auctioned. I registered for the auction and luckily found great second hand machines for R1.1 million. I tendered a cheque as payment and the machinery was delivered. I received a call from an angry manager at the bank saying, No, no, no Mr Macheke, why did you issue the cheque? I replied, Hi Sir, thank you very much for the facility, the equipment is being reconditioned and beginning of next month we are commencing production, please load the working capital so that we can buy raw material. I decided to take the plunge and my first business was established. Some times as an entrepreneur you need to be so crazy about your business that you simply operate out of the box. If you wait, you might wait forever.
Posted on: Thu, 09 Oct 2014 08:07:33 +0000
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