At Decusatio Working Capital Solutions we are always looking for interesting insights which can support South African entrepreneurs in our network on their business journeys.
This is why we really enjoyed a recent edition of The Money Capital Podcast which features Sizwe Salamani and Ongeziwe Nyenjana – co-founders of Kuyasa Registered Auditors. The interview looks at the subject of financial management within small businesses.
What we enjoyed about this interview:
It is always great when you get to watch interviews which bring together entrepreneurial stories with people who are grounded in sound financial principles.
The interview didn’t shy away from the gritty details of early-stage business mistakes. They highlighted some all-too-common “red flags” that we often see when companies first come to us for working capital advice:
- Blending the Personal and Professional: They shared cautionary tales of entrepreneurs using business accounts for personal luxuries – including those infamous “big bar bills.” While it’s tempting to treat the company card as a personal piggy bank, it’s the quickest way to obscure your true operational costs.
- The Tax Trap: A recurring theme was the failure to segment tax payments. By not putting aside VAT or income tax in real-time, many businesses find themselves in a liquidity crisis when the taxman eventually comes knocking.
Perhaps the most vital takeaway was the discussion on reinvesting capital. The Kuyasa entrepreneurs emphasised that long-term growth isn’t built on short-term “lifestyle” spending. Instead, it’s built on the discipline of taking available cash and pumping it back into the business to scale operations, improve technology, and strengthen the balance sheet.
For us at Decusatio, this aligns perfectly with our mission: we don’t just provide working capital; we provide the freedom for disciplined leaders to reinvest in their future.
In this episode the guests discuss:
- Why reinvesting cashflow is critical for growth
- The difference between income and building a scalable business
- How small businesses can stay competitive
- Practical ways to reinvest for long-term success
Watch the full interview below:
Why this resonates with us and the South African entrepreneurs we work with
We operate the SME.Tax Rosebank franchise and we regularly engage with entrepreneurs who are looking to raise capital.
While we appreciate that entrepreneurs have to balance their personal cashflow constraints, we often see a couple of common themes:
- Entrepreneurs draining company accounts as soon as cash comes in
- Entrepreneurs running personal expenses through their business accounts
For instance, we saw a good business with solid turnover (in excess of R250 00 per month) unable to access funding because the entrepreneur was running all of their personal expenses (Groceries, hairdressing appointments and even dog food) through the company accounts.
This DOES hurt you when applying for funding from South African fintechs
We work with two leading South African fintechs – Lula and Bridgement.
Both of these organisations offer lending solutions of up to R5m and can unlock this capital inside of 72 hours.
To unlock this capital, they require entrepreneurs to upload 3- or 6-months worth of business bank statements which their systems will analyse on the fly. These systems are designed to look for various line items and spending patterns.
This could include:
- No payments to SARS
- Ongoing withdrawals from the entrepreneurs
- Cash being extracted as soon as it arrives in the bank account
South African entrepreneurs need to remember that these systems are cashflow-based lenders – they have calculations or formulas which will immediately be able to calculate affordability.
Something which is often forgotten is that should an entrepreneur apply unsuccessfully via these platforms, they are often blocked from applying for a further 3 months. This is why it is important that the business puts their best foot – and financial statements – forward.
Are you a South African business looking to raise capital?
At Decusatio Working Capital Solutions, we offer a number of solutions to support entrepreneurs looking to enhance their capital stack.
Our partners from Lulalend provides fast and flexible business funding to SMEs and sole traders that traditional lenders often can’t serve. They can achieve this thanks to an innovative online business model and credit scoring algorithm.
Business Funding is simplified through the team from Bridgement, which allow our clients to access Business Loans, Lines of Credit, Invoice Finance and Trade Credit Solutions. Create your free Bridgement profile here.
Further to this, we can support you with more strategic capital raising including Development Finance and Department of Trade, Industry and Competition (DTIC) grants and incentives.
If you would like to setup a consultation, please do not hesitate to contact us.
