Last week, I had an interesting conversation with a group of consultants in Strategy and Finance.  It was not a surprise that most of them have had to change their tact because the market dynamics are changing.

Less than two months are left before the end of the year. As most SMEs budget for next year, top on their budgeting agenda will be meeting the funding gap. If you cannot manage your operations with what you have, you need someone to walk with you through the fundraising process. If you don't want to walk with a consultant,I challenge you to run the business with your reserves.

Think about it.You’ve built a perfect operation, you are making money, and you know how much you need. Having all that is just part of what you need. Even important, putting all this into perspective counts more especially if you have seek a financier. While pondering over this, note that the investor you are presenting your ideas to has more investment choices and wants to invest in solid ideas. Yours is just one of them.

It is important tha your business should be in the right place at the marketplace. In addition, growing the customer base as quickly as possible and maintaining momentum are crucial. Considering the scarcity of capital, anything beyond these two is waste of time unless it’s a capital expenditure.

Consultants come at a cost, and it is very unlikely that anyone will work for you before a downpayment. Consultants are worth the money in terms of developing the right framework and market entry strategy. A killer to your funding request will be requesting heavy salaries for the founder. The entrepreneur should be prepared to put in time to show commitment for which they get the reward from future cash flows; and not using the investor’s funds to line their pockets.

While acquiring customers is a costly affair, it still remains a critical consideration by investors. If the strategy is just to spend money for the sake of spending, it might be the time to revisit your strategy. Estimate how much return you will make from your marketing budget. It earns you more confidence if you can demonstrate your critical thinking and your understanding of the marketing and advertising budget you have set aside.

I warned a client against using TV for a media campaign on a new product he had launched in the market. Adamantly, the client spent over Kshs. 18 million on a campaign that lasted close to a month. The 30 second clip was funny and got people talking. The marketing interns did not slow down on their distribution of product flyers on the road side. Sales did not gradually increase; but one could easily tell from the sales numbers that any increase was almost proportionate to the few people who could read the flyers and make a phone call to the office. The flyers had only cost a few hundred thousand Kenya shillings as opposed to the TV campaign that cost Kshs. 18million.

I have learnt it the hard way that an office, furniture, coffee bars and other overheads are the least important consideration for an SME. If you have many years of operation with an attractive retainer from key clients that is guaranteed to go on for many years, then you might need all these. Otherwise, you are better off without them. A modest operation on a modest budget does best. Priority should be getting your product to the market, and gaining traction to sustain revenues for as long as possible.

Once all these things are checked in your budget for next year, you need to counter-check everything else from legal to accounting to the mere basics like janitorial and utilities.You don’t want to be the CEO headmaster in your own company, or the CEO who has to fight too many legal battles.

I have met entrepreneurs who have wild dreams about great websites, leather seats, latest laptops and phones they wish to buy. I insist that what entrepreneurs need most is the drive and persistence to make it happen.

As you finalize your budget for 2015, make sure that it focuses on the key revenue drivers. Depending on the sector you are operating in, it may not be a very good year due to systemic challenges that could keep our growth at minimum. Minimize the spending on items that the company may carry-forward.

By Michael Musau.

The author [email protected] is an Independent Consultant.