Securing the first sale is a key unlock for SME confidence

For many small and medium-sized enterprises (SMEs), securing external funding is viewed as the ultimate validation of a business idea.

Experts argue that making sales is the single most important factor in securing SME funding. Investors and lenders need proof that there’s a market for what’s on offer, rather than relying solely on a business plan.

In this episode of the Mzansi Business podcast, Jenine Zachar, head of value propositions and client experience for Business and Commercial Banking at Standard Bank, argues that financiers want to see a track record in the form of sales – because sales provide validation, revenue predictability, and the traction needed to justify capital investment.

“It’s not a piece of paper with a plan that gets you funding,” she says.

“What that plan or business case provides you with [is] the ability and access to make your first sale. That’s what starts building predictability.

“There’s no bigger or better selling point than that, and then showcasing that it’s repeatable. So one sale is good, [but] making repeatable sales is what you’re aiming for to build a reliable track record.”

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While business plans, market research, and projections are valuable, Zachar says nothing validates demand more convincingly than actual revenue, reducing uncertainty for potential investors.

In addition to signalling stability, Zachar says the first sale also offers entrepreneurs critical insights.

This includes customer feedback, purchasing behaviour, pricing acceptance, and operational challenges – which become visible in ways that theoretical planning cannot reveal.

These lessons help refine the offering and strengthen the business before larger investments are sought.

You can also listen to this podcast on iono.fm here.

“We often focus on how we get money in, which is important, but also, what are your behaviours? [What] money [is] going out of the business – all the way from paying yourself a salary, to how are you paying your suppliers.

“There’s nothing like predictability to start creating the pace for funding that’s needed thereafter,” Zachar emphasises.

In this all-encompassing interview, Zachar also provides insights into the state of SMEs in South Africa – from challenges, opportunities, digital transformation and innovation to strategies for scaling up, as well as a look at the policy environment.

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