Starting a Business

31
Dec

Incentives for Small Business Owners in Nigeria

Start Smart Series – Part 3

One of the issues facing small business owners in Nigeria is lack of finance and inadequate management expertise. Not surprisingly failure rates of small businesses is very high (estimated at about 80% within the first 5 years). This is further emphasized by the fact that most Nigerian youths are afraid to start their own businesses.

The draft National Policy on Micro, Small and Medium Scale Enterprise (MSMEs) stated the importance of MSMEs as the primary source of new jobs and the critical breeding and nurturing grounds for domestic entrepreneurial capacities, technical skills, technological innovativeness and managerial competencies. This cannot be better said as small business owners are a critical part of the economy and the business environment in Nigeria. The Nigerian government, in recognizing this fact, has put in place a number of incentives to encourage micro, small and medium enterprises (MSMEs).

The popular saying that knowledge is power is true as lack of knowledge of these incentives have prevented many entrepreneurs from taking advantage of the opportunity. In this part of our Start Smart Series, I have put together some incentives available to business owners in Nigeria:

 

  1. Graduate Entrepreneurship Fund (GEF)

Targeted at serving NYSC members. It is a financial aid given to NYSC members who have a business plan in one of the identified 35 MSMEs clusters. You can look up details at http://www.boi.ng/graduate-entrepreneurship-fund.

  1. Sure-P Graduate Internship Scheme (GIS)

Opened to all business owners between the ages of 18 and 40 years. It is a skill development training incentive. For details, see http://www.wealthresult.com/finance/small-business-federal-grants

  1. SMEEIS Youth Entrepreneurship Development Program (YEDP)

Opened to members and non-members of NYSC and those who possess a verifiable tertiary institution certificate or artisans with First School Leaving Certificate or a technical certificate or accredited proficiency certificate from the National Board for Technical Education (NBTE), whichever is applicable.

It serves as a financial aid for startups and expansion projects in agricultural value chains (fish farming, poultry, snail farming, etc.), cottage Industry, creative industry (tourism, arts and crafts) and Information and Communications Technology (ICT), among others. Read more about it at http://www.cbn.gov.ng/Devfin/yedp.asp

  1. SMEDAN Business Support Centres

Opened to all entrepreneurs; it is a vocational and entrepreneurship skills training organized by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). You can check out more about them at http://www.facebook.com/smedaninfo

  1. LIFE (Learning Initiative for Entrepreneurs)

This is a free online training on different business skills for all entrepreneurs. See more at http://www.life-global.org

  1. National Enterprise Development Programme (NEDEP)

This is a skills acquisition, entrepreneurship training/business development service (BDS) and access to finance initiative. See details at https://www.facebook.com/nedepentrepreneurs

These are just a number of incentives available to business owners which can go a long way to ease the journey towards running a successful business.

All the best in your entrepreneurial journey.

28
Dec

Quality Service as Competitive Edge

Today’s marketplace is extremely competitive, offering thousands of products and services accessible at customers’ fingertips. The single distinguishing factor in attracting new and retaining existing customers is increasingly becoming ‘service’.

“The battle for repeat business is critical to long-term success in today’s intensely competitive marketplace. Customer Service is not just a competitive edge. In many industries, it is the competitive edge. Service is the new standard by which customers judge performance.” – William Band

Customer Service is really selling. It is what inspires a customer for return purchase more often. Customer Service is not only the responsibility of the customer service personnel, but also of the overall involvement of all stakeholders in the organization. The quality of service offered in an organization greatly impacts on the bottom line result.

The only competitive advantage available to an organization in a service economy in which everyone is providing essentially the same level of quality service. It has become a long-term competitive advantage for businesses in competitive markets. Irrespective of the industry, the approach to service delivery plays a vital role in the accomplishment of any organization’s corporate goal. It must be planned, strategically implemented in line with customer expectations and appropriately measured for improvements.

Sometime, we are all in a marketplace where all contenders are offering the same product with similar prices and almost the same marketing strategy. If there is a service element in any activity, then there can be a competitive advantage.

Quality Service should ingrained in every department of the organisation because, ultimately all activities impacts on the perceived final quality of the product and service experienced by the customer. In rendering outstanding and impeccable service, one’s attitude plays a vital role. We must continuously express thoughtfulness, show courtesy, integrity, helpfulness, efficiency, availability, friendliness, knowledge and professionalism in our work.

It is worth noting that poor services eat away at a company’s reputation. Your customers deserve to always experience an impeccable service, which in turn triggers a longing for repeated business.

Whatever you are engaged in, your service is a reflection of your brand and commitment to proffering a memorable customer experience. Let quality service be your competitive edge in the marketplace.

3
Nov

Start Smart Series – Part 1 From Business Plan to Business Day 1

by Tubosun Aliu

For an aspiring entrepreneur, one challenge in the journey to starting your first business is the
question, “Where do I begin?”
There are no simple answers to this seemingly simple question, as starting from the very beginning is
the only way. There are no shortcuts on this entrepreneurial journey and you have to spend time,
intellectual resources and perhaps tap into your social capital to get started.
However, in order to make this journey easier, the important question that an entrepreneur needs to
constantly ask himself/herself is “Why am I doing this?”
Starting and owning a business takes a lot of time and energy, and can be physically, emotionally and
psychologically challenging. You might have to spend hours studying and researching, finding the right
location, technology, people, and working out your strategy, marketing plan, operational plans, etc.
This would eventually take its toll on you and you will most likely get to that point where you ask
yourself, “Why am I doing this again?”
Having an answer to the question of “why” is one of the things that would keep you going and push
you beyond that critical point when your momentum seems to be failing. When you successfully cross
this line of doubt, you become almost unstoppable!
The question then is to define what is important to you and the motive behind your wanting to start a
business. Yes, a lot of folks will say “of course, it’s to make money”, and I agree that making money in
business is very important and making profit is extremely critical. But the fact of the matter is that
there are a million and one ways to make money and a million and one businesses that you can do to
help you achieve that purpose, but you chose this particular business! So why this business and not
another?
The “why” behind your business is the motivation that keeps you going. This might be expressed in a
mission statement or might just be a strong conviction of how you believe you can bring about
positive change in the society, or improve the quality of lives of your target customers or even
employees.
Whether it’s a slogan or your core mission statement, this will be your strength on your journey and
ultimately continue to keep you fired up!

14
Jul

BENEFITS OF STARTING YOUR OWN BUSINESS

Culled from Managing Counsel of Templars; Ijeoma Uju’s presentation at Covenant Capital Seminar titled Establishing a business in Nigeria ‘What you need to know’ (Part 2)

Many people desire to start their own business and they wish to gather as many information as possible on how to go about the whole process.

To start with, there are several benefits for starting up a business in Nigeria- depending on the kind of structure you decide on. Some of these benefits include:

  1. Separate personality: This means you are separate from the business you set up (particularly where it is a company that is started). For example, Abimbola starts MonaMatthews Limited, but Abimbola is not MonaMatthews Limited; MonaMathews Limited can sue and be sued, it can own landed properties and so on, and it is considered to be an artificial person capable of enjoying most of the benefits of a natural person.
  2. Depending on the structure of your business, it can attract investors; A fascinating business idea or an existing business can attract lots of investors based on the structure of the business. With that kind of opportunity, you can diversify and also expand your business.
  3. There is limited liability connected to Value Added Tax. By implication, the tax and other obligations are on the company and not on you as a private person.
  4. It affords you perpetual life. In other words, the business can outlive you. You can therefore decide to retire while the business continues because there is an established value.
  5. If what you started is a company, you will have the opportunity to add your shares and other benefits in the business to the list of benefits to be divulged or willed out upon your demise. Therefore, you can divulge shares and other benefits to your family, your children, or other persons that you desire to assist.
  6. It gives you control. Where in particular the business that you started is sole proprietorship, you do not need to consult anyone before you can control your business; you have absolute control over the number of staff you want in your business; you can hire and fire staff without any consultation as such; you have control over what you want to produce, when, and where.

Having identified some of the benefits of starting your own business, you may wonder next on the kinds of business structures that are available in Nigeria, and also on your own best option. Some guides are provided below:

  1. There is sole proprietorship business: As the name implies, this kind of business refers to one man/woman ownership of the business. For sole proprietorship, you are the business and the business is you. You are the boss of the business; you have all the control you want over the business except for some interference by the government. In other words, you bear the risks alone, and you enjoy the profit alone.
  2. The partnership: if you are not capable on your own or you like to have other person(s) come together with you to run the business, you can invite one or more partners to join you in the business administration. The law gives room for 20 people entering into partnership; while in law firm or accounting firm, you can have more than 20 people. In this kind of business structure, all the risks (as well as the profit of the business) will be shared amongst the partners.
  3. Limited liability company; it could be public or private limited liability company; both are regulated based on their membership. For private limited liability company, you can only have 50 members (although, there are exceptions); but for public limited liability company, you can have as many members as you decide on. Either ways, your liability is limited only to the extent of your unpaid shares.
  4. Unlimited Liability Company: This kind of structure is uncommon. Unlike limited liability company, the liabilities of members are unlimited and they are liable separately and jointly. By implication, in the event, for instance, that the company has accrued liabilities and it is being wound-up, the creditors can go after any or all of the members together.
  5. Non-profit or Non-governmental organization: This includes charity organization, cooperative societies as we have amongst taxi drivers, farmers, and so on. The interesting thing about this kind of structure is that the aim is not to transact business and make profits.

The most common structures in Nigeria for businesses that are going to be profit making ventures are the business name, and the Limited liability Company.

The business name could either be set up as sole proprietorship or partnership.

For sole proprietorship, you must bear in mind that you are the business, everything you will do is about the business, you have complete control of the business- but it may be difficult for you as a sole proprietor to raise a substantial capital for the business, and you are not also guaranteed that your business will continue- which means succession on the business is not guaranteed as a sole proprietorship business owner.

As for partnership, financial commitments are shared amongst the partners; where you seek to operate one, you and your partners must share the load of profit and every other benefit that come out of the business and the risks. The principal issue is where dispute arises in the business and the partners are put to the test of carrying on together.

Lastly is the limited liability company structure which benefits hinge on the facts that the company is a separate legal personality from its members, it can transact business in its name, it can sue and be sued too, and there is perpetual succession of the business, plus the brain of the business which is referred to as Board of Directors. Conversely however, the tax liabilities on companies are higher, and companies are obliged to keep records and file annual papers and audited report.

From all stated, you may agree that the decision on which business structure to adopt has to be made as early as possible because not all the structures will be appropriate for the kind of business that you intend to run.

…. to be continued.