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How a Sou-Sou Helped Me Start a Business Without Getting a Loan

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How a Sou-Sou Helped Me Start a Business Without Getting a Loan

Saving has always been a challenge for me. While I continuously applied the pay-yourself-first principle to my finances, I struggled to stick to my budget.

So when I wanted to start a cake-decorating business, I needed another way to pay my startup costs. I preferred not to take out a loan because of interest charges.

When my co-worker suggested we start a sou-sou, I was ecstatic and thankful for her excellent suggestion.

What’s a Sou-Sou?

A sou-sou is a simple savings plan.

It’s a West African tradition also popular in the Caribbean. It requires a group of people to contribute a fixed amount of money either weekly, bi-weekly or monthly to a group account, with one member responsible for collecting the cash.

The group holds a random draw to determine the order in which each person will receive their lump sum payment. However, once each person receives their cash, they still have to contribute until everyone gets their payment.

A sou-sou could run for six months, or even up to a year — it all depends on how many people are in on it. Sou-sous continue until everyone receives their payout at least once.

How I Used a Sou-Sou to Start a Business

Curious about this somewhat unorthodox way to fund a new business? Here’s how I started a sou-sou to help me make enough money to get my cake-decorating business off the ground.

Determine How Much Cash You Need to Start Your Business

I created an inventory of supplies I’d need to start my business, then calculated the total cost of buying them. This helped me make sure I’d be able to get started once I received my payout.

Next, I looked for vendors and shopped around to find the best prices — then asked about a discount for buying in bulk. It never hurts to ask! This helped me save 20% of the original cost when I eventually bought everything.

Find Cash in Your Budget and Earn Extra Money

I needed to free up some money to go towards my sou-sou, so I decided to eliminate one bill from my monthly budget.

I compared my cable and internet bills to see which was costing me more, and canceled my $50 per month cable service — a whopping savings that helped me start my business.

To earn extra cash, I also sold cakes at community events at a reduced price. Consider how you could earn a few extra dollars a month to go towards your business. For example, babysit for friends, or bartend on the weekends.

Form a Group

Everyone in my department had previously been involved in a successful sou-sou, and since we were all working toward financial goals, it was easy for the team to get on board.

A total of 10 colleagues joined the sou-sou, but you can start one with any number of people. Ask co-workers, relatives and fellow church or gym members if they want in.

Choose a Cash Collector

We nominated my supervisor as cash collector, and placed our money in a locked box in her office. Two people had to be present when money was deposited or paid out.

Since we each received monthly salaries, we decided on a deadline for everyone to pay up.

My supervisor was also in the sou-sou. If the person collecting the cash isn’t in on it, they’re sometimes paid a percentage by each member. If my supervisor wasn’t a member, she would’ve received 5% of our earnings for managing the sou-sou.

Decide on a Reasonable Contribution

We considered our final objectives and unanimously decided on a realistic amount each person would pay.

There were 10 members and we decided to each contribute $100 per month — meaning we’d each get a $1,000 payout.

A few members were unable to contribute the full amount, so they joined with another member to each contribute $50 per month. When their payout time came, each person received $500 — a 50% payout.

I decided to double my contributions and pay $200 a month, meaning I’d get two $1,000 payouts to help me fund my business.

Propose Accountability

We suggested each person in the group be accountable to another member to make sure they spent their money toward their goals.

For example, I chose an accountability partner who would make sure I invested my $1,000 in my business and didn’t spend it on something else.

If I didn’t, I’d have to pay my partner 20% of my payout — an huge amount we chose to help motivate me to stick to my goal.

How My Sou-Sou Worked Out

Our sou-sou began in January and I received my payout in May. Since I doubled my contribution, I received another payout in November, which I also put toward my business.

Not only was I able to start my business, I consistently saved money! The group initiative was a huge part of my motivation, and everyone agreed having the support of other members of the sou-sou was crucial to our success.

My choice to use a sou-sou rather than taking out a loan paid off. I didn’t owe the bank any money, and I saved $200 I would have paid in interest charges.

With the assistance of friends or family, saving money to start a business is possible. $100 or $200 may not seem like much, but after a few months or years, it could be enough to get your business off the ground or help expand it without a loan.

Your Turn: Have you tried a sou-sou? Let us know in the comments!

Kerry Mc Donald is a freelance writer. She has written for sites such as Career Addict and Hivesource. A mother of two active boys, ages 2 and 7, Kerry believes it’s important to be creative with your finances and is always in search of inventive ways to save and invest money. You can follow her on Twitter or visit her website:

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