Things to Know before stepping into the Den

Have you found yourself scratching your head wondering what some terms thrown around in the Lions’ Den mean? Ati valuation, kidogo kidogo royalty, mara convertible note, wueh! Nishukisheni hapo kwa roundabout priss.

 

This might make you fear facing the Lions in the first place. Don’t be, let us share some knowledge with you. First things first, have you applied to join Season 3 of KCB Lions' Den yet? Link ndio hii hapa - https://www.kcb2jiajiri.com/lions-den/ 

 

Back to the big terminologies. To prepare for the den once you qualify for a chance to participate, start by watching past episodes here https://www.kcb2jiajiri.com/media-room/?dd_category=lions-den  . Know who the lions are, how they think and what they are looking for. The den has seen many entrepreneurs including Mganga kutoka Mombasa. Remember him?

 

https://www.youtube.com/watch?v=BP0ZtWvBb0w&t=83s

 

Like some entrepreneurs, he didn’t tackle the Lions' questions any better. To avoid not being prepared, here is what you need to know.

 

Customer Acquisition: Maybe you’ve never thought about it lakini, how do you get your customers? How much do you spend on social media or on a marketing budget ili upate customers? How many are they and can you estimate how much it costs to get a certain number to buy your products? Hii maneno sio ngumu, angalia marketing budget and past sales. Watu wa hesabu wako wapi?

 

Business Valuation: Hapa kwanza ndo iko siida. We’ve seen guys cook figures kama zile siku za chemistry class. When you add up everything you own in the business. Maybe cars, machines, profits, na products zile uko nazo, you get the total sum of your business. All these make up the total worth of your business. When pitching to trade part of the business for an investment, make sure you project future sales pia, and if you have, LPOs (purchase orders), show them to the Lions for proof of sales and profits.

 

Convertible Note: Here’s another one. Let’s say, biashara bado haijapick na you can’t really estimate the valuation. You go into the den and present the idea and also highlight that the business potential cannot be put into a valuation yet, until the business gets to a certain growth level. Kama biashara iko promising, you can get an investor to invest and later take equity. But to protect his/her investment, the Lion will get into a contract with you to show how he will get his returns.

 

Business Equity: Equity is the business ownership. Hii ndo unatrade for an investment. Let’s say you have an orange (since we can’t use a KDF for this example, haha), the whole of it is 100%. You slice it into bits, for each part you give, the percentage reduces. Basically, the business slice you trade with the investor for an investment is the equity.

 

Business Model / Plan: Unakumbuka siku za kuandika business plan? This is it. Business plan ni the details of the business showing how you intend to run the business and succeed. It’s advisable to have it written down. A lion may ask who your target customer is. Kama umefanya business plan, you’ll be able to answer that question as well as many others confidently.

 

Haya basi, click here to apply and all the best. Tupatane den.

 

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