‘Sweat Equity’

Did you know that there is a name for the time you spend conceptualizing your business, developing your product and writing down your business plan? It is called ‘sweat equity’, and like all costs associated with your business, it has a value!

Officially, sweat equity is defined as the ownership interest, or increase in value, that is created as a direct result of hard work by the owner.   It is the preferred mode of building equity for cash-strapped entrepreneurs in their start-up ventures, since they may be unable to contribute much financial capital to their enterprise. (Source: www.investopedia.com)

Now you may be wondering what sweat equity has to do with marketing your business - Well in your quest to attract funding for your startup, putting a value to your sweat equity can swing the balance in your favour.

Particularly when attempting to access grant funding, sweat equity will play an integral role in deciding how much or if you are able to gain access to the actual funds.  The granter usually wants to ascertain that you are just as interested in your business as he is.  Therefore you must be able to show ‘how much’ – in dollars and cents – you have invested in the business since inception.