Opportunity Capital – the Key to Unlocking Competitive Advantage in Retail

Savvy retail entrepreneurs look at working capital as a means to shift their business to the next level. It is this perspective that puts the “opportunity” in opportunity capital and that empowers retail merchants to remain competitive and relevant.

“We live in volatile times, with higher food and commodity prices, rising interest rates and changing consumer preferences, all challenging retailers to move fast,” says Steven Heilbron, CEO of Capital Connect, part of the Connect Group. “Quick access to working capital is essential for retailers to respond to opportunities as they present themselves.”

A well-known local example of responding to opportunity is Nando’s, a global success story that started in 1987 when two young entrepreneurs ordered peri-peri chicken at a takeaway restaurant and instantly knew they had struck gold. Fernando Duarte and Robert Brozin bought the restaurant, renamed it and started building their empire. Today, there are 1 200 Nando’s outlets in 30 different countries.

Fortunately for retailers, fintech disruptors, like Capital Connect, now make it easier than ever to turn an opportunity into a business or a new income stream with flexible, opportunity capital funding solutions that are quicker and easier to access than a traditional bank loan. These hassle-free business loans are tailored to the needs of an industry where even a one-day delay in the approval of a loan could spell the difference between seizing an opportunity or watching it slip through your fingers.

Capitalise on opportunities:
Consider the example of a fuel station retailer, moving fast to secure a fuel consignment before an increase in the fuel price. Access to working capital to make the purchase could save the retailer tens of thousands of rands that could be redeployed into store renovations, promotions, or to cover overheads like salaries. For example, with the most recent fuel price hike this week, a loan of R700 000 to pay for a 95-petrol consignment pre price hike, over a 90-day repayment period, but settled in the first 30 days, would deliver a profit of around R56 000 (after finance

Boost profits with bulk buys:
Another example might be a retailer that wants to prepare early for a major retail trading period like Easter, Black Friday or the festive season. Access to opportunity capital enables the retailer to negotiate bulk stock buys at discount rates, as well as to book premium advertising placements in advance.

Diversify to leverage trends:
The Bureau of Market Research identified diversification as one of four retail growth strategies for 2022. Diversification entails branching out into new product ranges and service offerings based on customer research and feedback and requires continuous innovation. Retailers that remain stagnant in their offering are sure to lose market share when products become redundant and lose their appeal and relevance.

Click & Borrow:
Opportunity capital differs from a traditional bank loan in that retailers can apply for a loan via an app without onerous requirements like forms filled out in triplicate or the submission of audited financial statements. They can get access to the capital they need in as little as 24 hours. Repayment terms are flexible. Some lenders even allow small daily instalments instead of the usual month-end deductions that can hurt the retailer’s cash flow.

“Now is the time for retailers to innovate. And opportunity capital gives retailers the competitive advantage to out-think, outsmart and thrive. There is no need to miss out on a growth opportunity, thanks to fintech solutions that enable businesses to access the funds they need to expand their businesses,” concludes Heilbron.

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