₦airaland Forum

There are times in the life of your business when mainstream finance options like loans and credits will be inadequate for your needs or beyond your reach. One option that may be available to you at a time like this is to consider accounts receivable financing as an alternative way of getting the cash that you need to run your business.

What, you may ask, is accounts receivable financing? Sometimes referred to as factoring, accounts receivable financing may be simply defined as a process whereby you sell the outstanding invoices for products or services already delivered by your business (otherwise known as receivables) to a financial institution (bank, finance house, etc.) at a price that is lower than the value of the invoices.

By this transaction, your business transfers ownership of the invoices to the financial institution, which then pays the discounted value of the invoices to your business, as negotiated and agreed in accordance with the quality and age of the invoices. It, thereafter, becomes the right and responsibility of the financial institution to get paid for what had hitherto been your invoices or receivables.

Accounts receivable financing works on the premise that your business has valuable assets (invoices) that can be financed. Based on this, the financial institution advances money to your business, for the slow-paying invoices of your business, waits for your customers to pay to it, and charges a small fee for this service.

Accounts receivable financing offers a source of immediate cash flow to enhance the growth of your business. It is collateral-free finance, unsecured, and does not require a pledge of assets or provision of guarantors.

Click here to continue reading

There are times in the life of your business when mainstream finance options like loans and credits will be inadequate for your needs or beyond your reach. One option that may be available to you at a time like this is to consider accounts receivable financing as an alternative way of getting the cash that you need to run your business.

What, you may ask, is accounts receivable financing? Sometimes referred to as factoring, accounts receivable financing may be simply defined as a process whereby you sell the outstanding invoices for products or services already delivered by your business (otherwise known as receivables) to a financial institution (bank, finance house, etc.) at a price that is lower than the value of the invoices.

By this transaction, your business transfers ownership of the invoices to the financial institution, which then pays the discounted value of the invoices to your business, as negotiated and agreed in accordance with the quality and age of the invoices. It, thereafter, becomes the right and responsibility of the financial institution to get paid for what had hitherto been your invoices or receivables.

Accounts receivable financing works on the premise that your business has valuable assets (invoices) that can be financed. Based on this, the financial institution advances money to your business, for the slow-paying invoices of your business, waits for your customers to pay to it, and charges a small fee for this service.

Accounts receivable financing offers a source of immediate cash flow to enhance the growth of your business. It is collateral-free finance, unsecured, and does not require a pledge of assets or provision of guarantors.

Click here to continue reading

The Central Bank of Nigeria (CBN), in pursuit of its objective of promoting economic development, in recognition of the significant contributions that Micro, Small and Medium Enterprises (MSMEs) are making to the growth of the economy, has been launching a growing range of initiatives aimed at addressing the financing gap in this sub-sector.

The CBN, in line with its pivotal role in the nation’s financial ecosystem, launched the Micro, Small and Medium Enterprises Development Fund (MSMEDF) on August 15, 2013 with a share capital of N220 billion. The Fund aims to enhance the access of MSMEs to financial services, by channelling single-digit loans at Nine percent interest rate to them, through the Primary Finance Institutions (PFIs).

Amidst cries that end users are finding it impossible to access this facility, one reason being the shortage of collateral among Small Business Owners, the CBN introduced the National Collateral Registry (NCR), to ease delivery of affordable loans to small businesses. Initiated in 2015, a movable asset in this register, with the Bank Verification Number (BVN) of the potential borrower, is expected to stand as collateral for a loan to a Small Business Owner.

Granted that bank executives and fund managers would rather not lend to Micro, Small and Medium Enterprises, because they are high-risk borrowers, this CBN-inspired NCR scheme provides a window for mitigating the risks of lending to them.

In yet another initiative, announced in December 2018, the CBN decided to transform the tottering Nigerian Postal Service (NIPOST) into a National Microfinance Bank.

Click here to read more

The Central Bank of Nigeria (CBN), in pursuit of its objective of promoting economic development, in recognition of the significant contributions that Micro, Small and Medium Enterprises (MSMEs) are making to the growth of the economy, has been launching a growing range of initiatives aimed at addressing the financing gap in this sub-sector.

The CBN, in line with its pivotal role in the nation’s financial ecosystem, launched the Micro, Small and Medium Enterprises Development Fund (MSMEDF) on August 15, 2013 with a share capital of N220 billion. The Fund aims to enhance the access of MSMEs to financial services, by channelling single-digit loans at Nine percent interest rate to them, through the Primary Finance Institutions (PFIs).

Amidst cries that end users are finding it impossible to access this facility, one reason being the shortage of collateral among Small Business Owners, the CBN introduced the National Collateral Registry (NCR), to ease delivery of affordable loans to small businesses. Initiated in 2015, a movable asset in this register, with the Bank Verification Number (BVN) of the potential borrower, is expected to stand as collateral for a loan to a Small Business Owner.

Granted that bank executives and fund managers would rather not lend to Micro, Small and Medium Enterprises, because they are high-risk borrowers, this CBN-inspired NCR scheme provides a window for mitigating the risks of lending to them.

In yet another initiative, announced in December 2018, the CBN decided to transform the tottering Nigerian Postal Service (NIPOST) into a National Microfinance Bank.

Click here to read more

Tosin Eniolorunda and TeamApt are in the news, and for the right reasons.

Tosin is the Managing Director of TeamApt Limited, a Nigerian finance technology company that provides digital banking business solutions and payment architecture for businesses. He and his company are making headlines for successfully bootstrapping their operations from zero to a profit-making enterprise, and topping their feat with a $5.5 million Series A investment from one of Nigeria’s shrewdest investors.

What is bootstrapping? How did Tosin bootstrap TeamApt into a multi-million dollar money-making enterprise? What does TeamApt plan to do with its new-found equity? What can you learn from Tosin and TeamApt as you set out to finance your own start-up?

Bootstrapping, in entrepreneurship, is a situation in which an entrepreneur starts a company with little capital. An entrepreneur is bootstrapping when he or she attempts to found and build a company from personal finances and/or the operating revenues of the company.

Bootstrap financing, one of the best and least expensive ways an entrepreneur can raise capital, pulls the entrepreneur up with little or no help from outside sources.

In 2015, when Tosin and some colleagues at Interswitch decided to strike out on their own, they had no money and had no friends in high places. All they had was desire, a desire to bootstrap TeamApt into profitability. As a matter of choice, Tosin and his team chose not to get external funding at the early stage of their business.

As senior executives at Interswitch, a Lagos-based, Africa-focused digital payments and commerce company that facilitates electronic circulation of money, and exchange of value between individuals and organisations, they saw a gap in the market.

In few months of operations, Tosin and his founding team set a goal to provide end-to-end service, system automation, credit/debit reconciliation and related digital products to help banks move their transactions, from merchants to banks and vice versa.

TeamApt’s first client was Computer Warehouse Group (CWG) for which it built a payment solution. It developed and launched its first Point of Sale (PoS) solution for Fidelity Bank in 2016 and, two years later, 26 Nigerian banks had adopted its PoS solution.

TeamApt followed with Moneytor, a digital banking solution that enables financial institutions to track transactions on mobile and web platforms, and Monnify, an enterprise software targeted at small and medium enterprises.

Click here to continue reading

Tosin Eniolorunda and TeamApt are in the news, and for the right reasons.

Tosin is the Managing Director of TeamApt Limited, a Nigerian finance technology company that provides digital banking business solutions and payment architecture for businesses. He and his company are making headlines for successfully bootstrapping their operations from zero to a profit-making enterprise, and topping their feat with a $5.5 million Series A investment from one of Nigeria’s shrewdest investors.

What is bootstrapping? How did Tosin bootstrap TeamApt into a multi-million dollar money-making enterprise? What does TeamApt plan to do with its new-found equity? What can you learn from Tosin and TeamApt as you set out to finance your own start-up?

Bootstrapping, in entrepreneurship, is a situation in which an entrepreneur starts a company with little capital. An entrepreneur is bootstrapping when he or she attempts to found and build a company from personal finances and/or the operating revenues of the company.

Bootstrap financing, one of the best and least expensive ways an entrepreneur can raise capital, pulls the entrepreneur up with little or no help from outside sources.

In 2015, when Tosin and some colleagues at Interswitch decided to strike out on their own, they had no money and had no friends in high places. All they had was desire, a desire to bootstrap TeamApt into profitability. As a matter of choice, Tosin and his team chose not to get external funding at the early stage of their business.

As senior executives at Interswitch, a Lagos-based, Africa-focused digital payments and commerce company that facilitates electronic circulation of money, and exchange of value between individuals and organisations, they saw a gap in the market.

In few months of operations, Tosin and his founding team set a goal to provide end-to-end service, system automation, credit/debit reconciliation and related digital products to help banks move their transactions, from merchants to banks and vice versa.

TeamApt’s first client was Computer Warehouse Group (CWG) for which it built a payment solution. It developed and launched its first Point of Sale (PoS) solution for Fidelity Bank in 2016 and, two years later, 26 Nigerian banks had adopted its PoS solution.

TeamApt followed with Moneytor, a digital banking solution that enables financial institutions to track transactions on mobile and web platforms, and Monnify, an enterprise software targeted at small and medium enterprises.

Click here to read more

Dear Small Business Owner,

Do You Need A Quick Loan Of N4m?

Are you a small business owner? Do you need a quick loan to run your business?

Renmoney, a leading financial technology lending company, is willing, ready and able to advance N4,000,000 to your business at a single-digit rate of two (2) percent.

The Chief Executive Officer of Renmoney, Oluwatobi Boshoro, says: “We have tested and iterated this product extensively for almost six months, reviewed over thirty thousand applications and issued over six thousand loans. We are convinced that this product will go a long way in making financial inclusion meaningful for business owners.”

If your business needs N4,000,000, if your business has a good income history, if your business can part with a fraction of its earnings as monthly repayments, try Renmoney at www.renmoney.com.

Please feel free to let us know of your experience with Renmoney or need assistance as you try to access this facility. You can reach us at info@smefinance.org

How You Can Access Loans From Development Bank of Nigeria

The Development Bank of Nigeria (DBN) was licensed by the Central Bank of Nigeria (CBN) as a wholesale development finance institution, to lend wholesale to microfinance banks and deposit money banks, for on-lending of medium to long-term money to Micro, Small and Medium Enterprises (MSMEs).

With a capital base of N100 billion and $1.5 billion from development partners, DBN is uniquely positioned to make a significant contribution to the Nigerian funding ecosystem. Its loans are targeted at small business owners, farmers and traders, and has on-going lending activities in agriculture, trade and commerce, education and real estate.

However, not many Small Business Owners know the modalities for accessing credit from the bank. The bank’s Managing Director, Tony Okpanachi, is responding by counselling MSME owners on how to access funds from the bank.
Speaking at the SMEs Clinic in Lokoja, Kogi State, Okpanachi said that, being a development finance institution, its funds can only be accessed through commercial banks, microfinance banks and other licensed financial institutions.

Okpanachi says: click here to continue reading

Do You Need A Quick Loan Of N4m?

Are you a small business owner? Do you need a quick loan to run your business?

Renmoney, a leading financial technology lending company, is willing, ready and able to advance N4,000,000 to your business at a single-digit rate of two (2) percent.

The Chief Executive Officer of Renmoney, Oluwatobi Boshoro, says: “We have tested and iterated this product extensively for almost six months, reviewed over thirty thousand applications and issued over six thousand loans. We are convinced that this product will go a long way in making financial inclusion meaningful for business owners.”

If your business needs N4,000,000, if your business has a good income history, if your business can part with a fraction of its earnings as monthly repayments, try Renmoney at www.renmoney.com.

Please feel free to let us know of your experience with Renmoney or need assistance as you try to access this facility. You can reach us at info@smefinance.org.



How You Can Access Loans From Development Bank of Nigeria

The Development Bank of Nigeria (DBN) was licensed by the Central Bank of Nigeria (CBN) as a wholesale development finance institution, to lend wholesale to microfinance banks and deposit money banks, for on-lending of medium to long-term money to Micro, Small and Medium Enterprises (MSMEs).

With a capital base of N100 billion and $1.5 billion from development partners, DBN is uniquely positioned to make a significant contribution to the Nigerian funding ecosystem. Its loans are targeted at small business owners, farmers and traders, and has on-going lending activities in agriculture, trade and commerce, education and real estate.

However, not many Small Business Owners know the modalities for accessing credit from the bank. The bank’s Managing Director, Tony Okpanachi, is responding by counselling MSME owners on how to access funds from the bank.
Speaking at the SMEs Clinic in Lokoja, Kogi State, Okpanachi said that, being a development finance institution, its funds can only be accessed through commercial banks, microfinance banks and other licensed financial institutions.

Okpanachi says: Click here to read more

Amidst the credit crunch that has become the fate of Small Business Owners, a financial technology company is offering small businesses quick loans of up to N4,000,000.

Who are they and would you need to do to qualify for this line of credit?

The Development Bank of Nigeria (DBN), with a capital base of N100 billion and $1.5 billion from development partners, advances loans to small business owners, farmers and traders, and has on-going lending activities in agriculture, trade and commerce, education and real estate.

However, this development finance institution only receives loan applications through intermediary financial institutions. You will be interested in knowing the modalities and requirements for accessing credit from DBN.

Do you know you can... Click here to continue reading

Amidst the credit crunch that has become the fate of Small Business Owners, a financial technology company is offering small businesses quick loans of up to N4,000,000.

Who are they and would you need to do to qualify for this line of credit?

The Development Bank of Nigeria (DBN), with a capital base of N100 billion and $1.5 billion from development partners, advances loans to small business owners, farmers and traders, and has on-going lending activities in agriculture, trade and commerce, education and real estate.

However, this development finance institution only receives loan applications through intermediary financial institutions. You will be interested in knowing the modalities and requirements for accessing credit from DBN.

Do you know you can... Click here to continue reading

What Can A Coach Do For You And Your Business? A Lot!

Your Business Coach Clarifies Your Vision. An entrepreneur is often caught in flights of fancy, mesmerised by shiny objects and prone to the siren influence. With many brilliant ideas floating in his or her head, the entrepreneur starts one idea today and drops it the next day, and produces motions without movements.
Your business coach, seeing your fits and starts, will make sure you have your feet on the ground while your head is in the sky. He or she will teach you how to bring your idea(s) to life. He or she will help you crystalise the goal of making your idea a reality. He or she will assess your plans, evaluate what is realistic, and steer you towards an action plan on where to start and what to tackle first.

You and your business coach will agree on the vital things you need to do to achieve your goals.

Your Business Coach Guides You Towards Your Goal. By working with you and your business, your business coach will know you as a person, and know the details of your business. He or she will know your strengths and weaknesses as a person, and the strength and weaknesses of your business.
Through one-on-one sessions with you, through probing your entire operations, your employees, your leadership style, your business coach will develop intimate knowledge of you as a human being, and a keen awareness of your enterprise.

Your business coach, by interacting with you, comes to know your business in and out, and channels this personal knowledge to guide you towards your destination. He or she will hold you accountable for expected results and the time frame for achieving them.

Your business coach will grow your self-confidence, personally and professionally. He or she will prepare you for every situation that will come your way, because he or she has done what you are trying to do. You will leverage on his or her failures and successes, to minimise your failures and increase your successes.

Your Business Coach Expands Your Network And Grows Your Net Worth. Your business coach is an invaluable addition to your network. Your work with your business coach gives you an indirect access to his or her network.
In the world of work, where your network impacts on your net worth, your business coach (who has your challenges and aspirations as top of mind concerns) is very likely to introduce you to other successful people like him or her, which will improve your own chance of success.

Your Business Coach Provides A Sounding Board...Click here to read till the end

What Can A Coach Do For You And Your Business? A Lot!

Your Business Coach Clarifies Your Vision. An entrepreneur is often caught in flights of fancy, mesmerised by shiny objects and prone to the siren influence. With many brilliant ideas floating in his or her head, the entrepreneur starts one idea today and drops it the next day, and produces motions without movements.
Your business coach, seeing your fits and starts, will make sure you have your feet on the ground while your head is in the sky. He or she will teach you how to bring your idea(s) to life. He or she will help you crystalise the goal of making your idea a reality. He or she will assess your plans, evaluate what is realistic, and steer you towards an action plan on where to start and what to tackle first.

You and your business coach will agree on the vital things you need to do to achieve your goals.

Your Business Coach Guides You Towards Your Goal. By working with you and your business, your business coach will know you as a person, and know the details of your business. He or she will know your strengths and weaknesses as a person, and the strength and weaknesses of your business.
Through one-on-one sessions with you, through probing your entire operations, your employees, your leadership style, your business coach will develop intimate knowledge of you as a human being, and a keen awareness of your enterprise.

Your business coach, by interacting with you, comes to know your business in and out, and channels this personal knowledge to guide you towards your destination. He or she will hold you accountable for expected results and the time frame for achieving them.

Your business coach will grow your self-confidence, personally and professionally. He or she will prepare you for every situation that will come your way, because he or she has done what you are trying to do. You will leverage on his or her failures and successes, to minimise your failures and increase your successes.

Your Business Coach Expands Your Network And Grows Your Net Worth. Your business coach is an invaluable addition to your network. Your work with your business coach gives you an indirect access to his or her network.
In the world of work, where your network impacts on your net worth, your business coach (who has your challenges and aspirations as top of mind concerns) is very likely to introduce you to other successful people like him or her, which will improve your own chance of success.

Your Business Coach Provides A Sounding Board... Click here to read to the end

There is no gainsaying the fact that the Nigerian banking industry is
experiencing an acute shortage of liquidity. At a time Nigeria is bearing the dubious distinction of having the highest cost of borrowing in Sub Sahara Africa, small business owners who manage to borrow money from banks that are also struggling to find money, do so at very high costs.

According to the Manufacturers Association of Nigeria (MAN), Nigerian
manufacturers paid an average interest rate of 22.9 percent during the
first six months of 2018.

It is not uncommon to find small business borrowers who apply for loans of, say, N5 million, for 12 months, to be asked to pay an interest rate of 25 percent!

The question is: How many small businesses can turnover a N5 million
loan in 12 months, be able to repay principal and interest, and still
make a profit? That would be near impossible, even if the business is doing buying and selling.

It is against this backdrop that we receive the good news coming from one of the nation’s frontline commercial banks.

Click here to read more

There is no gainsaying the fact that the Nigerian banking industry is
experiencing an acute shortage of liquidity. At a time Nigeria is bearing the dubious distinction of having the highest cost of borrowing in Sub Sahara Africa, small business owners who manage to borrow money from banks that are also struggling to find money, do so at very high costs.

According to the Manufacturers Association of Nigeria (MAN), Nigerian
manufacturers paid an average interest rate of 22.9 percent during the
first six months of 2018.

It is not uncommon to find small business borrowers who apply for loans of, say, N5 million, for 12 months, to be asked to pay an interest rate of 25 percent!

The question is: How many small businesses can turnover a N5 million
loan in 12 months, be able to repay principal and interest, and still
make a profit? That would be near impossible, even if the business is doing buying and selling.

It is against this backdrop that we receive the good news coming from one of the nation’s frontline commercial banks.

Click here to continue reading

Question: I heard that Union Bank of Nigeria recently launched its Tech Ventures Programme to support the development of technology businesses. What is the programme about and how can a business access it?

Ademola Osinuga, Ibadan

Answer: The Union Bank of Nigeria Tech Ventures Programme is set up to support new technology businesses, by assisting them to start, scale or grow their businesses.

Depending on its stage of growth, the programme offers technology-based businesses one of three options, namely:

Nurture: This package offers mentorship, technical support and collateral-free loans to technology start-ups. It also assists them with internet access and office space.
Scale: Middle-level businesses can use this package to scale their operations. It helps them achieve their objective through such business support services as Accounting, Human Resources, Payroll and Logistics. It also provides funding, which it complements with business advisory services.
Unicorn. Businesses in their growth-stage can leverage the unicorn package. It blends credit facilities with access to Union Bank’s distribution channels and customers, supported by the bank’s advisory services.

You can access the Union Bank Tech Ventures Programme by signing up at..... Click here to continue reading

Question: I heard that Union Bank of Nigeria recently launched its Tech Ventures Programme to support the development of technology businesses. What is the programme about and how can a business access it?

Ademola Osinuga, Ibadan

Answer: The Union Bank of Nigeria Tech Ventures Programme is set up to support new technology businesses, by assisting them to start, scale or grow their businesses.

Depending on its stage of growth, the programme offers technology-based businesses one of three options, namely:

Nurture: This package offers mentorship, technical support and collateral-free loans to technology start-ups. It also assists them with internet access and office space.
Scale: Middle-level businesses can use this package to scale their operations. It helps them achieve their objective through such business support services as Accounting, Human Resources, Payroll and Logistics. It also provides funding, which it complements with business advisory services.
Unicorn. Businesses in their growth-stage can leverage the unicorn package. It blends credit facilities with access to Union Bank’s distribution channels and customers, supported by the bank’s advisory services.

You can access the Union Bank Tech Ventures Programme by signing up at ... Click here to continue reading

The recent decision of the Central Bank of Nigeria (CBN) and the Bankers’ Committee to transform the comatose Nigerian Postal Service (NIPOST) into a National Microfinance Bank calls for an urgent rethink.

The Governor of the Central Bank and Chairman of the Bankers’ Committee, Mr. Godwin Emefiele, gave three reasons for the decision:

Non-disbursement of intervention funds to Micro, Small and Medium Enterprises (MSMEs).
High and “outrageous” interest rates charged by existing microfinance banks.
Need to revamp the nation’s moribund postal services system.
Under the proposal, the Bankers’ Committee will invest N5 billion in equity from its N60 billion Agricultural Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund while NIPOST would contribute its offices in the 774 local governments across Nigeria.

While the three problems pinpointed by the apex bank and the Bankers’ Committee are real and deserve to be addressed, the proposed solution raises some concerns.

Microfinance institutions aim to bring financial services to people who otherwise wouldn’t have them. Their purpose, therefore, is to extend financial tools to those who otherwise would not have access to them.

A for-profit microfinance bank operates about the same way as deposit money banks, although with differing criteria for opening accounts and securing loans.

On the other hand, the functions of a post office are:

Sale of stamps and envelopes.
Sending and receiving of telegraphic messages.
Sending and receiving of money orders.
Receiving and delivery of mails and related packages.
In some parts of the world, beyond their core service, post offices also offer such services as providing and accepting government forms (like driving licence and passport applications), processing government services and fees (like road taxes), and banking services (like savings accounts and credit transactions).

Where is the chemistry between the post office and the bank, in this search by the CBN and the Bankers’ Committee, to cure the ills of the microfinance banks?

The National Association of Microfinance Banks (NAMB) accuses the CBN of blaming the victim, when it makes the point, albeit correctly, that the microfinance banks charge high interest rates and don’t disburse cheap funds. However, the Association reminds the CBN of its obligation under the Revised National Microfinance Policy which provides as follows:

Click here to continue reading

The recent decision of the Central Bank of Nigeria (CBN) and the Bankers’ Committee to transform the comatose Nigerian Postal Service (NIPOST) into a National Microfinance Bank calls for an urgent rethink.

The Governor of the Central Bank and Chairman of the Bankers’ Committee, Mr. Godwin Emefiele, gave three reasons for the decision:

Non-disbursement of intervention funds to Micro, Small and Medium Enterprises (MSMEs).
High and “outrageous” interest rates charged by existing microfinance banks.
Need to revamp the nation’s moribund postal services system.
Under the proposal, the Bankers’ Committee will invest N5 billion in equity from its N60 billion Agricultural Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund while NIPOST would contribute its offices in the 774 local governments across Nigeria.

While the three problems pinpointed by the apex bank and the Bankers’ Committee are real and deserve to be addressed, the proposed solution raises some concerns.

Microfinance institutions aim to bring financial services to people who otherwise wouldn’t have them. Their purpose, therefore, is to extend financial tools to those who otherwise would not have access to them.

A for-profit microfinance bank operates about the same way as deposit money banks, although with differing criteria for opening accounts and securing loans.

On the other hand, the functions of a post office are:

Sale of stamps and envelopes.
Sending and receiving of telegraphic messages.
Sending and receiving of money orders.
Receiving and delivery of mails and related packages.
In some parts of the world, beyond their core service, post offices also offer such services as providing and accepting government forms (like driving licence and passport applications), processing government services and fees (like road taxes), and banking services (like savings accounts and credit transactions).

Where is the chemistry between the post office and the bank, in this search by the CBN and the Bankers’ Committee, to cure the ills of the microfinance banks?

The National Association of Microfinance Banks (NAMB) accuses the CBN of blaming the victim, when it makes the point, albeit correctly, that the microfinance banks charge high interest rates and don’t disburse cheap funds. However, the Association reminds the CBN of its obligation under the Revised National Microfinance Policy which provides as follows:

Click here to continue reading

Question: How Do I Choose A Business Model For My Start-Up?

Samuel Adoji, Okene

Answer: Your business model, simply defined, is how your business plans to create value, and make money.

Every business does one or more of three things: It makes, markets or delivers a product or service, and determines the markets to enter. In searching for your start-up model, you should consider the following:

Product or Service: Make and sell your own product or service.

You can produce and distribute your product or service through different channels. Example: Product Manufacturer or Service Provider.

Reseller: Find a product or service produced by a third party producer, represent the producer, and make profit from the difference between the price you get it from the producer and the price you sell it to the end users. Example: Distributor of fast-moving goods.
Broker: Bring buyer and seller together and charge a fee for the transaction. Example: Real Estate Agent.
Platform: Build a community and charge a fee for gaining access to it. Example: Membership Club.
In picking your business model, you should consider the following factors:

Size Up The Market: Determine the market for your idea. Does it have enough customers who are experiencing the problem your idea is trying to solve? Are they willing and able to pay for the solution to their problem? Will your business make profit if you go into a narrow niche in the market?

The Competition: Study the businesses doing what you want to do. What are they offering? Can you see a gap for you to improve on their offer? The performance of your potential competitors will give you an indication of the state of your target market and signal what you must do to succeed in it.

Your Target Customer: Define the character and qualities of the customer you plan to serve. This will give you a view of the market and the best ways to access it.

Your Value Offer: What is your unique qualification to provide the product or service you have in mind for your market? What will make your product or service different from what’s in the market? Why should buyers prefer your product or service instead of that of your competitors?

Click here to continue reading

Question: How Do I Choose A Business Model For My Start-Up?

Samuel Adoji, Okene

Answer: Your business model, simply defined, is how your business plans to create value, and make money.

Every business does one or more of three things: It makes, markets or delivers a product or service, and determines the markets to enter. In searching for your start-up model, you should consider the following:

Product or Service: Make and sell your own product or service.

You can produce and distribute your product or service through different channels. Example: Product Manufacturer or Service Provider.

Reseller: Find a product or service produced by a third party producer, represent the producer, and make profit from the difference between the price you get it from the producer and the price you sell it to the end users. Example: Distributor of fast-moving goods.
Broker: Bring buyer and seller together and charge a fee for the transaction. Example: Real Estate Agent.
Platform: Build a community and charge a fee for gaining access to it. Example: Membership Club.
In picking your business model, you should consider the following factors:

Size Up The Market: Determine the market for your idea. Does it have enough customers who are experiencing the problem your idea is trying to solve? Are they willing and able to pay for the solution to their problem? Will your business make profit if you go into a narrow niche in the market?

The Competition: Study the businesses doing what you want to do. What are they offering? Can you see a gap for you to improve on their offer? The performance of your potential competitors will give you an indication of the state of your target market and signal what you must do to succeed in it.

Your Target Customer: Define the character and qualities of the customer you plan to serve. This will give you a view of the market and the best ways to access it.

Your Value Offer: Click here to continue reading

An entrepreneur is a person who takes on the financial risk of setting up a business, in the hope of making a profit. An entrepreneur is like a farmer, who understands that before you can harvest corn from your farm, you must first plant the seeds, nurture them and wait for a period of maturing, before you can look forward to harvest time.

A wise entrepreneur knows that, just as the farmer must ripen his fruits by degrees and cannot sow and reap at once, he or she cannot start a business today, and start making money tomorrow.

Whether on the farm or in the marketplace, every enterprise is subject to the laws of nature. In the same way that it takes time for a seed to germinate and produce fruits, it also takes time for a business to gain traction before it begins to make money, and profits. Every Small Business Owner needs, and ought to, understand this entrepreneurial patience, and leverage it for business success.

Strangely, however, this is not always the case. As a Small Business Owner, when you are struggling to build a business, life can be hard. This is one big reason you may lose patience, wish to give up on your dream and be tempted to quit, especially when you erroneously believe that your business will be an overnight success.

Nothing can be farther from the truth. A critical lesson in entrepreneurship is that it takes time to build a business. Despite your investments of effort, money and time, it can take a long time before you start to see results. It takes time to deliver your first product or service. It takes time to assemble your team and get them to sing from the same hymn book. It takes time to get customers.

Why is your business taking forever to take off and what can you do to make it look like the proverbial overnight success? You will do well to try this Holy Grail of Business Success:

Vision of Success. Clarify your vision of success. It’s easy to see success in terms of the home you live in, the foreign travel you embark on, the luxury cars you drive, etc. You can see achievement and possession of these things as evidence you are a successful person.
Nothing wrong with these measures of success, except that you are measuring yourself against the things of the world and the successes of others. While you are entitled to these symbols of success, you can never get enough of them when your goals shift with each shiny toy that appears on the horizon.

What, then, is your vision of success? Define and achieve your own success. Understand and define what success feels like for you, the one that is right for you, and stay with it. You need to commit to, and focus on, your personal vision of success.

In the words of Shakespeare... Click here to continue reading

An entrepreneur is a person who takes on the financial risk of setting up a business, in the hope of making a profit. An entrepreneur is like a farmer, who understands that before you can harvest corn from your farm, you must first plant the seeds, nurture them and wait for a period of maturing, before you can look forward to harvest time.

A wise entrepreneur knows that, just as the farmer must ripen his fruits by degrees and cannot sow and reap at once, he or she cannot start a business today, and start making money tomorrow.

Whether on the farm or in the marketplace, every enterprise is subject to the laws of nature. In the same way that it takes time for a seed to germinate and produce fruits, it also takes time for a business to gain traction before it begins to make money, and profits. Every Small Business Owner needs, and ought to, understand this entrepreneurial patience, and leverage it for business success.

Strangely, however, this is not always the case. As a Small Business Owner, when you are struggling to build a business, life can be hard. This is one big reason you may lose patience, wish to give up on your dream and be tempted to quit, especially when you erroneously believe that your business will be an overnight success.

Nothing can be farther from the truth. A critical lesson in entrepreneurship is that it takes time to build a business. Despite your investments of effort, money and time, it can take a long time before you start to see results. It takes time to deliver your first product or service. It takes time to assemble your team and get them to sing from the same hymn book. It takes time to get customers.

Why is your business taking forever to take off and what can you do to make it look like the proverbial overnight success? You will do well to try this Holy Grail of Business Success:

Vision of Success. Clarify your vision of success. It’s easy to see success in terms of the home you live in, the foreign travel you embark on, the luxury cars you drive, etc. You can see achievement and possession of these things as evidence you are a successful person.
Nothing wrong with these measures of success, except that you are measuring yourself against the things of the world and the successes of others. While you are entitled to these symbols of success, you can never get enough of them when your goals shift with each shiny toy that appears on the horizon.

What, then, is your vision of success? Define and achieve your own success. Understand and define what success feels like for you, the one that is right for you, and stay with it. You need to commit to, and focus on, your personal vision of success.

In the words of Shakespeare, in the famous play, Hamlet, to thine own self be true!

2 Success Takes Time:

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Fola Adeola, founding Managing Director/Chief Executive Officer of Guaranty Trust Bank Plc, has identified the 12 giant evils plaguing the nation to include the evils of hunger, ignorance, disease, idleness, darkness, voidness, barrenness, wastage, aimlessness, crookedness and insecurity.

Delivering a lecture on “Human Development Index vs Economic Growth: Nigeria’s Policy Options” at the third edition of Vanguard Economic Discourse in Lagos, he warned that if the evils are not addressed, they would ruin the nation.

Taking ignorance, for instance, he said that out of over 180 million Nigerians, 75 million do not have basic literacy skills. He added that Nigeria has the highest number of out of school children in the world and accounts for more than half of the 20 million out of school children globally.

“Ignorance is evil because it negatively impacts the ability of our citizens to make informed choices about their future and the future of their children. It limits their earning potential, and robs them of the opportunity to participate, much less compete in a global market place. “With the largest population in Africa, almost twice that of Ethiopia, which is second in line, continued illiteracy in Nigeria will spell disaster for the country and the continent and almost likely result in a humanitarian crisis,” he warned.

To address the evil of ignorance, Adeola suggested the provision of free high quality universal basic education and subsidised, targeted and functional tertiary education. To achieve this, the government, he said, should make it mandatory for all children of primary school age to attend school, while parents who do not adhere to the rule should be made to face legal consequences.

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Fola Adeola, founding Managing Director/Chief Executive Officer of Guaranty Trust Bank Plc, has identified the 12 giant evils plaguing the nation to include the evils of hunger, ignorance, disease, idleness, darkness, voidness, barrenness, wastage, aimlessness, crookedness and insecurity.

Delivering a lecture on “Human Development Index vs Economic Growth: Nigeria’s Policy Options” at the third edition of Vanguard Economic Discourse in Lagos, he warned that if the evils are not addressed, they would ruin the nation.

Taking ignorance, for instance, he said that out of over 180 million Nigerians, 75 million do not have basic literacy skills. He added that Nigeria has the highest number of out of school children in the world and accounts for more than half of the 20 million out of school children globally.

“Ignorance is evil because it negatively impacts the ability of our citizens to make informed choices about their future and the future of their children. It limits their earning potential, and robs them of the opportunity to participate, much less compete in a global market place. “With the largest population in Africa, almost twice that of Ethiopia, which is second in line, continued illiteracy in Nigeria will spell disaster for the country and the continent and almost likely result in a humanitarian crisis,” he warned.

To address the evil of ignorance, Adeola suggested the provision of free high quality universal basic education and subsidised, targeted and functional tertiary education. To achieve this, the government, he said, should make it mandatory for all children of primary school age to attend school, while parents who do not adhere to the rule should be made to face legal consequences.

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Question: How Do I Upgrade From Business Name To Limited Liability Company?

Ohi Igbinoba, Benin City

Answer: Entities that wish to convert from Business Name to Limited Liability Company have the option of dissolving the Business Name and registering the same name as a Limited Liability Company. The problem, however, is that the Corporate Affairs Commission (CAC) cannot guarantee that the same name would be approved for the purpose of incorporating a limited liability company.

To upgrade a Business Name to a Limited Liability Company, you are required to do the following:

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Question: How Do I Upgrade From Business Name To Limited Liability Company?

Ohi Igbinoba, Benin City

Answer: Entities that wish to convert from Business Name to Limited Liability Company have the option of dissolving the Business Name and registering the same name as a Limited Liability Company. The problem, however, is that the Corporate Affairs Commission (CAC) cannot guarantee that the same name would be approved for the purpose of incorporating a limited liability company.

To upgrade a Business Name to a Limited Liability Company, you are required to do the following:

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Mrs. Titi Ogungbesan is the Chief Executive Officer (CEO), Stanbic IBTC Stockbrokers Limited (SISL). She joined Investment Banking & Trust Company Limited in 2004, and stayed with the bank through its two mergers. Ogungbesan was appointed to the Board of Stanbic IBTC Stockbrokers as an Executive Director on February 19, 2015. In this interview with Helen Oji, she spoke on the need to sustain confidence in the nation’s bourse, the role of market operators in increasing investors’ participation, and other sundry issues. Excerpts:

The listing of major companies, particularly in the oil and gas, power, and telecoms sectors, on the Nigerian Stock Exchange (NSE), has remained a matter of intractable debate, with both sides offering strong arguments that appear to have stalemated the issue.

What role can market operators like you play to break the deadlock, and possibly encourage the targeted companies to quote on the nation’s bourse?

Our role here will be to act as intermediaries in order to ensure a win-win situation for both parties. The major benefits for listing includes assess to cheaper long term capital whether for expansion or for diversification purposes or even taking on new projects, brand enhancement/visibility, improved transparency, and wider inclusion.

Companies that have a good business model and a good track record of profitability over the years attract investors, who usually want to be part of such businesses.

One of the requirements for listing is that proper corporate governance must be in place. The operators can help persuade these companies to see the advantages inherent in listing on the NSE.

The challenge we now have to take on as market operators is identifying those companies, engaging them, and enlightening them on how the Nigerian stock market can both create more liquidity and value for their business.

I must mention however, that the operating environment is quite challenging at the moment for some of the businesses in those sectors. There has to be a really compelling story for the companies wishing to list on the exchange to get their desired level of liquidity.

The capital market is expected to play a major role in helping government finance a huge budget deficit this year. In your opinion, how well can the market support government’s financing efforts?

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Mrs. Titi Ogungbesan is the Chief Executive Officer (CEO), Stanbic IBTC Stockbrokers Limited (SISL). She joined Investment Banking & Trust Company Limited in 2004, and stayed with the bank through its two mergers. Ogungbesan was appointed to the Board of Stanbic IBTC Stockbrokers as an Executive Director on February 19, 2015. In this interview with Helen Oji, she spoke on the need to sustain confidence in the nation’s bourse, the role of market operators in increasing investors’ participation, and other sundry issues. Excerpts:

The listing of major companies, particularly in the oil and gas, power, and telecoms sectors, on the Nigerian Stock Exchange (NSE), has remained a matter of intractable debate, with both sides offering strong arguments that appear to have stalemated the issue.

What role can market operators like you play to break the deadlock, and possibly encourage the targeted companies to quote on the nation’s bourse?

Our role here will be to act as intermediaries in order to ensure a win-win situation for both parties. The major benefits for listing includes assess to cheaper long term capital whether for expansion or for diversification purposes or even taking on new projects, brand enhancement/visibility, improved transparency, and wider inclusion.

Companies that have a good business model and a good track record of profitability over the years attract investors, who usually want to be part of such businesses.

One of the requirements for listing is that proper corporate governance must be in place. The operators can help persuade these companies to see the advantages inherent in listing on the NSE.

The challenge we now have to take on as market operators is identifying those companies, engaging them, and enlightening them on how the Nigerian stock market can both create more liquidity and value for their business.

I must mention however, that the operating environment is quite challenging at the moment for some of the businesses in those sectors. There has to be a really compelling story for the companies wishing to list on the exchange to get their desired level of liquidity.

The capital market is expected to play a major role in helping government finance a huge budget deficit this year. In your opinion, how well can the market support government’s financing efforts?

Click here to continue reading

Ronke Bamisedun is a Public Relations Consultant and Founder of BWL Agency, a Lagos-based strategic brand development and communications company.

With an undergraduate degree in Media and Communications (Public Relations) from Birmingham City University and a Chartered Institute of Public Relations Diploma in Public Affairs, she began her career in music PR where she had the opportunity to work with some of London’s big music agencies who represented artists like Mark Ronson, Madonna and Florence & The Machine. She talked with The Guardian. Excerpts:

Tell us about your growing up, education, and professional background?
I am the third of four girls. Yes, my dad was a lucky man, right? We were raised to be hardworking females – if you want it, you go get it. My sisters and I are fiercely independent. My dad always told us there was no place for us in ‘the family’ business and my mum always said ‘my girls cannot be housewives’ – even though she is a housewife. Those words removed any safety blanket as well as sense of entitlement from a very young age. We knew we had to go out there and make it by ourselves.

Growing up I had a lot of male friends who were like brothers to me and that has continued. This has made it easy for me to handle male situations in a work environment because I am seen as ‘one of the guys’ whatever that means.

My younger years were spent in Lagos where I went to St. Saviour’s School, Ebute Metta and then unto Vivian Fowler Girls College before I moved to the United Kingdom to finish my studies. I have a Bachelor of Arts degree in Media and Communications (Public Relations) and I hold a CIPR Diploma in Public Affairs and Political Communications.

I’ve been working since I was 16 years old and yet to take a break from my career. My first role was at a Butcher’s store in London. I wanted the extra cash and so worked there on weekends. Then I went into fashion and worked for a bunch of High street stores. Right about the same time, I was struggling on my course in Business school. I hate numbers and anything quantitative so I took a year out to explore Communications which was the best decision I ever made. I interned in a couple of music PR agencies in London.

Can you imagine getting to meet some of your favourite artists? Eventually, I got my first PR job with an agency called Kaizo PR where I worked on some amazing accounts such as House of Marley – a range of products by the Bob Marley Family. I moved back to Nigeria four years ago and took on the role as Head of PR for the InterContinental Hotel and last year I joined Grayling, a top global agency where I headed the Nigerian team.

I now run BWL Agency – the exclusive affiliate of Grayling in Nigeria. We look after the Pernod Ricard Nigeria Portfolio handling brands such as Jameson, Martell, Chivas and Absolute Vodka. I’m also in the process of launching a new fashion platform called SLKT Fashion. SLKT will provide fast fashion for a very under-served demographic at budget prices.

As PR consultant, is there an experience from your career that stands out as one that helped you develop the person you are today?

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Ronke Bamisedun is a Public Relations Consultant and Founder of BWL Agency, a Lagos-based strategic brand development and communications company.

With an undergraduate degree in Media and Communications (Public Relations) from Birmingham City University and a Chartered Institute of Public Relations Diploma in Public Affairs, she began her career in music PR where she had the opportunity to work with some of London’s big music agencies who represented artists like Mark Ronson, Madonna and Florence & The Machine. She talked with The Guardian. Excerpts:

Tell us about your growing up, education, and professional background?
I am the third of four girls. Yes, my dad was a lucky man, right? We were raised to be hardworking females – if you want it, you go get it. My sisters and I are fiercely independent. My dad always told us there was no place for us in ‘the family’ business and my mum always said ‘my girls cannot be housewives’ – even though she is a housewife. Those words removed any safety blanket as well as sense of entitlement from a very young age. We knew we had to go out there and make it by ourselves.

Growing up I had a lot of male friends who were like brothers to me and that has continued. This has made it easy for me to handle male situations in a work environment because I am seen as ‘one of the guys’ whatever that means.

My younger years were spent in Lagos where I went to St. Saviour’s School, Ebute Metta and then unto Vivian Fowler Girls College before I moved to the United Kingdom to finish my studies. I have a Bachelor of Arts degree in Media and Communications (Public Relations) and I hold a CIPR Diploma in Public Affairs and Political Communications.

I’ve been working since I was 16 years old and yet to take a break from my career. My first role was at a Butcher’s store in London. I wanted the extra cash and so worked there on weekends. Then I went into fashion and worked for a bunch of High street stores. Right about the same time, I was struggling on my course in Business school. I hate numbers and anything quantitative so I took a year out to explore Communications which was the best decision I ever made. I interned in a couple of music PR agencies in London.

Can you imagine getting to meet some of your favourite artists? Eventually, I got my first PR job with an agency called Kaizo PR where I worked on some amazing accounts such as House of Marley – a range of products by the Bob Marley Family. I moved back to Nigeria four years ago and took on the role as Head of PR for the InterContinental Hotel and last year I joined Grayling, a top global agency where I headed the Nigerian team.

I now run BWL Agency – the exclusive affiliate of Grayling in Nigeria. We look after the Pernod Ricard Nigeria Portfolio handling brands such as Jameson, Martell, Chivas and Absolute Vodka. I’m also in the process of launching a new fashion platform called SLKT Fashion. SLKT will provide fast fashion for a very under-served demographic at budget prices.

As PR consultant, is there an experience from your career that stands out as one that helped you develop the person you are today?

Click here to continue reading

The average business owner who wants to start a new business is faced with the challenge of raising capital. Beyond personal savings, this search for money to invest in a business idea leads to friends, family, angel investors and venture capitalists.

When these sources are not forthcoming or do not amount to much, the search extends to business loans, possibly from banks. However, it is near impossible for a bank to fund a start-up. The start-up does not have a credit standing. It will be asked to provide collateral to secure the credit. It will be requested to present business projections showing how it will make money and how the bank will be re-paid. Its chance of securing bank finance is severely limited if it cannot meet these requirements in support its loan application. Because the bank, which is not a risk-taker, expects to recover its money, principal plus interest.

The frenzy surrounding start-ups looking for money makes it seem like that is the only way to finance a new business. Certainly not.

Instead of spending your time trying to raise money from friends, family, angel investors, venture capitalists, banks, etc., bootstrapping may be your best solution. Bootstrapping is when the entrepreneur or business owner starts a business with little capital, and tries to found and build a company from personal finances or operating revenues of the new business.

Should you decide to consider the bootstrap route, here are some tips to guide your journey in bootstrapping.

Do Low-Budget Market Research: If you need to research your market to further validate your product or service, don’t spend an arm and a leg. Go low-budget. Ask friends and family. Do random surveys. Talk to specialty groups likely to use your product or service. Touch base with potential channel partners about what they are looking for.

At the end of your research, ensure that you have a product or service that is ready for the market, before you continue spending money on many other things. You can then proceed to test, refine and deliver your product or service at a cost and price that will turn a profit for the business.

Your Goal and Your Plan: You should think about your goal and your plan. What type of business do you want to build and how do you create a plan for building it? What is your capital requirement and what will you use it for? Are you in a position to pour your savings into the venture? How much personal time, resources and money can you allocate to it?

Form Your Core Team: You need a small team of people with complementary skills and knowledge. Your core team should have members with diverse expertise to help you keep costs low by completing most tasks in-house.

Consider external partnering to increase the success percentage of your business. If your team lacks a certain skill, collaborate with a partner organisation.

Budgets And Milestones: Your budget will tell you where your resources (read: time and money) are coming from and where they are being spent. Prepare your budget upfront and watch it with an eagle eye. Always remember that cash flow is king. The business dies when it runs out of cash.

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The average business owner who wants to start a new business is faced with the challenge of raising capital. Beyond personal savings, this search for money to invest in a business idea leads to friends, family, angel investors and venture capitalists.

When these sources are not forthcoming or do not amount to much, the search extends to business loans, possibly from banks. However, it is near impossible for a bank to fund a start-up. The start-up does not have a credit standing. It will be asked to provide collateral to secure the credit. It will be requested to present business projections showing how it will make money and how the bank will be re-paid. Its chance of securing bank finance is severely limited if it cannot meet these requirements in support its loan application. Because the bank, which is not a risk-taker, expects to recover its money, principal plus interest.

The frenzy surrounding start-ups looking for money makes it seem like that is the only way to finance a new business. Certainly not.

Instead of spending your time trying to raise money from friends, family, angel investors, venture capitalists, banks, etc., bootstrapping may be your best solution. Bootstrapping is when the entrepreneur or business owner starts a business with little capital, and tries to found and build a company from personal finances or operating revenues of the new business.

Should you decide to consider the bootstrap route, here are some tips to guide your journey in bootstrapping.

Do Low-Budget Market Research: If you need to research your market to further validate your product or service, don’t spend an arm and a leg. Go low-budget. Ask friends and family. Do random surveys. Talk to specialty groups likely to use your product or service. Touch base with potential channel partners about what they are looking for.

At the end of your research, ensure that you have a product or service that is ready for the market, before you continue spending money on many other things. You can then proceed to test, refine and deliver your product or service at a cost and price that will turn a profit for the business.

Your Goal and Your Plan: You should think about your goal and your plan. What type of business do you want to build and how do you create a plan for building it? What is your capital requirement and what will you use it for? Are you in a position to pour your savings into the venture? How much personal time, resources and money can you allocate to it?

Form Your Core Team: You need a small team of people with complementary skills and knowledge. Your core team should have members with diverse expertise to help you keep costs low by completing most tasks in-house.

Consider external partnering to increase the success percentage of your business. If your team lacks a certain skill, collaborate with a partner organisation.

Budgets And Milestones: Your budget will tell you where your resources (read: time and money) are coming from and where they are being spent. Prepare your budget upfront and watch it with an eagle eye. Always remember that cash flow is king. The business dies when it runs out of cash.

When you are bootstrapping... Click here to continue reading