+234 1 454 1985

msmehub@fatefoundation.org

X-twitter Facebook Instagram Linkedin Youtube
subscribe

Operations

How to Position for Sustainability

Businesses require a well-thought-out process to stay afloat and abreast with market dynamics. The importance of this basic plan is even more pronounced with the uncertainties of our time – the incidence of COVID-19, regulatory changes, economic downturn and many other disruptive factors. While some businesses have recorded massive and positive growth despite these disruptions, other businesses have wound up or struggling to stay afloat. This article will highlight the 5 (Five) important factors that entrepreneurs need to consider in their business operations if they must grow sustainably. These factors are: Finance – Capital is the lifeblood of any business; it is important for take-off, operations and growth. You can finance your business either through debt or equity (other people buying shares in your company) or you can adopt a mix of both equity and debt. You can also consider grants, commercial loans or bringing on Private Equity or Venture Capital companies. Whatever financing option you take, the growth potential of your business and the amount of risks you are willing to take now, must be keenly considered. An entrepreneur may need to seek professional advice to take on the most suitable option. Growth – Growth is a product of consistent and intentional efforts with the application of sound strategies in achieving business objectives. To grow, the business needs to create value. So, to advance in business, the entrepreneurs need to answer the WHY Question. What is the key product or service this business has created? Is it really meeting a need? What is my product fit? Who are my target customers/clients? The WHY questions will guide you in making the right decisions and the answers to them will set the stage for business growth. Talent Recruitment – A suitable workforce is crucial to furthering business objectives and attaining set goals. Hiring should be done with objectivity, excellence, purpose, and on a needs basis. Entrepreneurs should build a team that can align with the values and ethos of the business and who can key into its vision and imbibe its culture. Establishing Systems & Structures – Entrepreneurs need to initiate and institutionalize appropriate mechanisms and procedures to ensure the efficient running of their businesses even in their absence as founders or CEO. Ensure that your employees understand the business dynamics and can make valuable decisions even in your absence. Use of Technology –It is important that entrepreneurs leverage on technology as a tool to create an efficient system and improve their business service delivery. Technology keeps disrupting the norm and any entrepreneur who does not adopt technology stands the risk of losing its business to its competitors.  

How to Position for Sustainability Read More »

How To Validate Start-up Ideas With Design Thinking

Innovators are concerned about building a product that will have a huge impact on the lives of people by increasing the quality of living standards, addressing a pain point or an alternative that is cost effective for its consumers. With these great thoughts comes a big question that has to be answered before launching a product or service and it is the question of “is there a market”? The addressable market size becomes a question to answer in order to ensure that when a product is manufactured, it will find users or consumers who are willing to utilize the product based on the offer that is being given. One of the techniques that most successful start-ups in the world has applied to ascertain whether a product will sell or not is called “Design Thinking” Leading Change One of the failures is the assumption that there is a market, is one that can be seen or witnessed in solutions that have been made for people. An example is the construction of an overhead bridge for pedestrians to avoid crossing the expressway. However, the humans who this provision has been made for usually ignore the bridge and use the expressway to connect to their routes, which even makes their transit riskier than the use of the overhead bridge. Why would anywhere risk their lives to cross an expressway when there is an overhead bridge beside them? Failure in the consideration of what would drive people to use the overhead bridge is what is lacking and why the preference for the use of the expressway. Would these same people use the overhead bridge if there were possible factors considered before making the designs? The answer is an absolute yes. The failure in the use of the overhead bridge is driven around the fact that the normal tendencies of human behavior were not considered before constructing the bridge. Human Centered Design Design thinking takes into consideration the natural tendencies of human behavior before designing a solution. This will ensure shared responsibility from both parties such that there is already a market with reasonable demand to capture a market share than can sustain the business when eventually presented to the users. The failure of most start-up ideas is embedded in the emotional attachment that founders have to their ideas which makes it difficult for them to be open to feedback from the prospective users. However, a fact based finding should be prioritized against emotions when creating a solution. How Design Thinking Drives Innovation There are five stages in the design thinking process 1. Empathize Being able to empathize with customers most especially when it is a challenge or pain point that makes the purchasing or usage of a product or service difficult for them gives you an opportunity to learn closely from them. Customers who have a reference point of a better offering would always voice out hence, active listening to their challenges is a great feedback for start-ups. This stage consists of interviews in getting to know what the ideal scenario is to prospective customers. 2. Define Having interviewed the prospects, it then becomes necessary to begin to define what the challenges are from all the opinions gathered from several interviews conducted with stakeholders. The age group of those facing these challenges, their income level, experience, education and location becomes parameters to pay attention to. 3. Ideate The aim of conducting interviews and surveys by visiting the field is to be able to generate a product or service that has a fit for the market. All the feedback that has been given now needs to undergo divergent or convergent processes where divergent takes the several opinions and create solutions around them while convergent thinking helps to narrow down to the best idea. These two thought processes helps to come up with what the proposed solution to be developed would be. 4. Prototype Prototyping involves making a Minimum Viable Product (MVP), a minimum viable product is one that is made with the minimum resources in order to furthermore see how customers interact with the product or service in its pilot or beta phase. The feedback from the usage and engage would then help to determine whether a full product would be manufactured or not. For digital products such as web or mobile apps, tools such as Figma or Adobe XD can be used to make a prototype. 5. Test The testing stage helps to pick the ideas that work and move very fast to implement them. If there are impediments or bugs, then it has to be corrected. When the product passes the testing stage, a complete product category can now be created and ready to make entry into the market. The first two stages in the process of design thinking helps to look out for evidence by carrying out Primary Market Research (PMR) to ascertain by means of qualitative and quantitative analysis the fact there are evidences to either support whether a challenge really exists or not for a solution to be created. Founders should learn to embrace what the primary market research presents in order to avoid losing big as a result of the assumptions of what they either expect the market to be or their emotional connection to the product. Read Also: Ten Marketing Tips for Startups

How To Validate Start-up Ideas With Design Thinking Read More »

Why You Need a Business Plan

“By failing to plan, you are planning to fail.’’ (Benjamin Franklin, Inventor, and Businessman) As a budding entrepreneur, the need for a well-written plan that communicates your intentions to internal and external stakeholders cannot be over-emphasized. The purposes of a business plan include: A business plan describes the venture you will create to exploit an idea or concept. A business plan is a written document that describes in detail how the business is going to achieve its goals. A business plan lays out a written plan from an operational, marketing, and financial viewpoint. It serves as an action plan, road map, fundraising, and sales tool. Common mistakes in writing a business plan include: Vague value proposition – mostly existing ideas Difficulty laying out the operationalization of idea Extremely optimistic financial projections – no sensitivity analysis Improper definition of your market Inability to identify risks and possible mitigation A bankable business plan should have the following critical elements: The Company Overview The Marketing Plan The Operations Plan The Financial Plan In our next post, we will explore each of these critical elements in further detail.

Why You Need a Business Plan Read More »

What You Should Know about VAT

Gone are the days when small and medium-sized scale business owners will say forget Value Added Tax (VAT). It is for big companies. If you continue to operate your business with that mindset, both the amount for VAT and penalties will keep piling up.  VAT is a tax that is added to the price of goods or services. It is charged at a rate of 7.5 percent. The current battle by some State governments to collect VAT in their various states instead of the Federal Government is a great concern for every business owner. Every business owner is by law a tax agent to the Government. It means that officially your business is meant to file VAT to the Federal Inland Revenue Service (FIRS) on or before the 21st of every month. Who pays VAT? VAT is paid by users of the paid goods and services. Every business that makes sales of products or services either at a stretch or cumulatively the sum of twenty-five million nairas (N25,000,000) or more in a year is liable to pay VAT. Considering this new development, the governments will employ all kinds of law enforcement, including touts, to collect more VAT. This will put more pressure on business owners and their cashflows. This law enforcement when they visit you as VAT defaulter, you will have to settle them, and still pay the VAT you owe including the penalty. What a loss! Put your house (business) in order by doing the following; 1. Separate your personal finance from business finance by simply placing yourself as a business owner on salary. If your business cannot pay salary then wages. 2. Stop using your company account to assist people who have relations overseas just because there is a promise of extra cash. You cannot prove is not for business afterward. Then you will be forced to pay VAT out of it. 3. Start keeping proper records of all your business transactions. 4.  If in the last three (3) or six (6) months you have not made sales or purchases worth six a million (N6,000,000), do not charge Value Added Tax anymore to your customers this year. The reason is that you may not be making up to twenty-five million Naira (N25,000,000). 5.  Even though you do not charge Value Added Tax you are supposed to be filing VAT to either FIRS or State Board of Internal Revenue depending on the state of residence. Presently, Rivers and Lagos states are the leading states in Value Added Tax collection. Hello entrepreneur, you cannot afford as a business owner in this present economy in Nigeria not to file Value Added Tax. The need and demand for money by the government at all levels have never been like this. This will push the government to take measures you may consider “not business-friendly”.   Read Also: Here’s Whats New on Tax Identification Number

What You Should Know about VAT Read More »

Customer Retention Strategies

How Superstores Are Utilizing Superior Customer Experience To Increase Retention Rates And How SMEs Can Adopt Technique “A happy customer tells their friend, an unhappy customer tells the world” One of the major challenges Small and Medium Enterprises (SMEs) face is customer retention. This is the ability to make customers coming back after the first purchase. Repeat sales to the same set of customers over time encourage loyalty and as a business owner, you need loyal customers to ensure you are in business. The reason why it is important to have strategies for both customer acquisition and retention is that it takes as much as 3x effort, time, and resources to acquire a new customer than to retain them. Therefore the ability to manage an already existing customer helps a business build loyalty and profitability eventually. There are several examples of how different businesses have used customer experience to boost customer retention. A major shift in consumer’s purchasing behavior can be seen in the emergence of superstores across Africa. There have always been supermarkets within neighborhoods where residents make regular purchases, however, their inability to create a unique experience for buyers has caused customers to visit these superstores that can create the experiences they desire. As customers emerge, their needs begin to shift from just satisfaction of these needs to getting an experience that helps them create memories whenever they go shopping, and this evolution has made businesses think about how to capture these experiences in their offerings. Some variables that have seen the surge of customers to superstores from already existing supermarkets include: Ambiance Ambiance could be in the form of a serene environment with greenery or a properly lighted space where customers with their families can sit, have informal discussions and relish the memories and experiences that comes with being able to enjoy their shopping experience. An environment that creates a background for good pictures puts the shoppers in a position of wanting to experiment with different scenery. This range of experiences is a major factor that would keep customers loyal to a brand. Competitive Pricing Superstores have also learned the ability to engage their supply chain to get competitive pricing for the bulk purchases made in order for retailers to benefit from obtaining goods at what they consider reasonable and affordable. Entertainment Music playing in the background from loudspeakers across the building of these superstores helps to also create some refreshing moments in the minds of the shoppers, which makes them loosen up as they enjoy the homemade artistry of popular performing artists and musicians. Hygiene Shopping in an environment that considers hygiene a priority is one that customers consider unique in terms of experience especially as the covid-19 pandemic is yet to be completely wiped out. Seeing the janitors continuously working around the environment to ensure there is cleanliness makes shoppers become confident not just in the offerings but in the conveniences. Parking Spaces A superstore expects to get a lot of customers and there becomes a new challenge to create ease while they shop. Ease could come in the form of creating parking lots to not just accommodate their vehicles but also guarantee the security of their assets. Africa is a unique market and for a superstore to thrive, an understanding of the driving factors needs to be considered in order to create unique offerings. No matter how big or small a store is, it will never grow beyond its ability to create a unique experience for its customers.

Customer Retention Strategies Read More »

How to Keep Your Business Afloat in Uncertain times

The Covid-19 pandemic had a widespread effect on businesses in many ways that caused huge layoffs, bankruptcy, reduction in the production of the units of goods or services offered, increase in price from suppliers, and change in the way work is done globally. With this pandemic, came the opportunity to become innovative and creative to serve the market demands and the different unseen variables that have influenced the world of business today. Huge Layoffs Start-ups had no constant cash flow as a result of the covid-19 pandemic and needed to only keep key staff. Layoffs then became an option as without considering this solution, there would be a backlog in the payment of salaries which will negatively impact the company. These layoffs affected productivity as the limited staff now had to work longer hours and perform more tasks than before. Bankruptcy Organizations that took off with initial investments or loans from financial institutions and could not sustain the repayment terms as working capital got depleted and there was not enough traction to request for the second tranche of investment, saw their businesses go under as operations came to a grinding halt. Reduction in the units of production Consumers as a result of the covid-19 pandemic focused on just the essentials such as food, healthcare, and education. There has been an increase in the price of foodstuffs and other items which made consumers begin to cut spending as their earnings had not changed. This impacted the usual quantities of items purchased and businesses had to adjust by either adopting production upon request only to curb wastages or production in limited quantities as general consumption dropped due to an increase in prices. Increase in price from suppliers The supply chain is an important loop that affects all stakeholders as they obtain directly from manufacturers and then sell to retailers before reaching the final consumers. When there is a change in the manufacturer’s offer it affects the distributors and suppliers and ultimately affects the final consumer. Thriving In Times of Covid-19 Pandemic Change is inevitable and only organizations that can adapt to the changing times remain sustainable in business. These are some measures to help you keep your business afloat in uncertain times 1. Adopt a remote working system Start-ups have realized that the 5-day work week might not necessarily apply any longer as their team can now work from home and still get the job done. The majority of organizations now have a hybrid system of work where some staff work from home and others work on-site. This ensures productivity as teams can now manage themselves without making the top management resort to micromanagement. Tasks such as data entry, phone calls, receipt and reply of emails, online marketing can now be done by a remote team. 2. Implementation of a cloud-based storage system The use of cloud-based storage system might not have been easily adopted by a large percentage of businesses, before but as covid-19 began to develop resistance and human-human interaction became limited, a cloud-based storage system then became necessary not just for storage of files but for collaborative work and easy referencing of stored documents. 3. Focus on Cash-flow Organizations get into a web of numerous activities that then makes them ignore their core. Inability to focus on their core bring irregularities in their revenue. Guaranteed cash flow is the lifeline of every business even if it does not make a profit initially; there is a huge possibility of breaking even eventually. The focus should be on every activity directly or indirectly that can lead to the generation of revenue for a business. 4. Data-Driven Decisions Companies are trying to curb wastages that could occur in the application of their resources and they begin to pay attention to the data they are generating. Embedded in the customer’s data are insights that could lead to what quantity of items should be produced on a weekly, monthly, quarterly, or yearly basis based on the demand from using predictive analytics. Several tools can be used for collecting data for business purposes, mostly used are Google Forms, Google Analytics and Hubspot, the collected data can now be analyzed using specific tools in data science. 5. Adoption of Wage Earnings System The era of weeks of work before earning a salary has also come under challenge as there is a rise in the demand for freelancers to perform certain tasks without having to provide medical care, workspace, internet services, and all the offers that comes with servicing a full-time staff. Companies need to decide on what roles demand a full-time staff and the ones that demand freelancers, consultants, or part-time staff.

How to Keep Your Business Afloat in Uncertain times Read More »

How to be Investment Ready

Research has shown that in Nigeria, 80% of businesses fail within the first 5 years, and out of the 20% that make it past 5 years, just 25% of them make it to the 10-year mark.  Being an entrepreneur in Nigeria myself, I can list out many different factors that affect the success of a business but one of the most important ones in our climate is access to funds. Having little capital is difficult to build scalable and sustainable businesses.  But another challenge could be not having the right network to help scale your business. Both these reasons are why entrepreneurs seek investors. Investors provide the expertise, network, and investment to help grow sustainable businesses and help scale these businesses.  Seeking investors, however, is very challenging and overwhelming for many. You have to first off know the type of investor you are looking for (for example, a banker, angel investor, crowd funder, venture capitalist), the profile of the investors you are seeking, and what these investors are looking for. With this understanding out of the way, you can then work on ensuring your business is investment-ready before you approach them.  In this article, I will share with you some tips on how to be investment-ready Solid Financial Analysis: you have to show your investors that you understand your numbers. Understand your past performance, your current performance, and your future projected performance (at least for the next 3 years). Show that your assumption is justified and your projected performance model is flexible and dynamic enough to account for changes in your assumptions. You should also create a solid revenue model that shows investors the path your business will take to make money. Market Strategy: no investor wants to invest in a company that is targetting a very small group of people who do not have strong purchasing power. You will need to show your investors that you have researched the market size of your business and you have a clear go-to-market strategy. You also need to show them that you have created some kind of traction within the market. Exit Strategy: as you have seen within the start-up world, people do not start a business without an end goal in mind. You need to identify your end goal; is it a merger or an acquisition or an IPO. Identify your end goal and be able to justify why you want this goal.  Strong Team: investors are less likely to invest in a one-man business (nor a sole proprietorship). Ensure you have people that believe in your vision and are inspired to join your team in the role of a co-founder or partner. Be careful when picking your co-founders or partners, ensure they have the same values, goals, and vision as you for the business.  Clear Ask: you have to know and be very clear on what you are asking the investors for, it could be one or more things but be clear. Is it money, access to their suppliers, distributors, network, and so on? Be able to clearly tell investors what the valuation of your company is. The tricky part about valuations is that there are different ways to calculate your business’s valuation, choose the best way, and be able to justify it.  Once all these 5 pointers are clearly defined and understood, you can now create an investment teaser deck, which is a deck (presentation) you send to investors explaining to them the above and why they need to invest in your business. You need to also have supporting documents and evidence. And most importantly you need to be proactive and prepared.    Read Also: Growing the economy: Attracting investment to Nigeria through franchising  

How to be Investment Ready Read More »

Legal Structures You Need as a Media Agency

Hello Zainab, I currently run a Media Agency with my co-founder.  We are looking to scale by representing various Content Creators, and platforms, that is while they create the shows, songs, or content, we would be the ones to handle the business aspect of things We have been doing business on a month-to-month basis, what legal structure do we need to put in place to handle all our deals as a Media Agency? Thanks Do-it-right Business Owner   Hi Do-it-right Business Owner, I’m always glad to hear of people creating solutions and doing it well, so I owe you a smile. Starting with your question on a recommended legal structure, the first thing you need to do is to incorporate your business. You shouldn’t confuse this with registering a business name. An incorporated company differs from a business name as it is a separate legal entity while in the case of a business name, there is no separation between the proprietor(s) and the registered business. Also, you should get a founders agreement that governs the relationship between founders. It defines all the roles, obligations, and benefits of each founder. It’s always better to sort this out at the early stages of your business. You should also have terms and conditions which indicate intellectual property usage and rights with the content creators. You should also look at having a privacy policy for the use of all the personal information you will gather. With all this said, you should still seek legal advice from a lawyer who can help you out with more intricate details. You can find one here As an additional resource, you can read up these articles:- Types of business entities, Setting up a legal entity for your business in Nigeria. These videos could be helpful too- Diylaw Video 1, Diylaw Video 2 Keep succeeding Do-it-right Business Owner

Legal Structures You Need as a Media Agency Read More »

Creating a Sustainable Competitive Advantage

To win in the marketplace on a sustainable basis, you have to choose a game plan (from among the many options) by matching the external opportunities with your distinctive internal competencies. One must, however, not take ‘’exploiting distinctive competencies’’ as an end in itself – it is only a means to an end. ‘’The real essence of business is to find and keep customers.’’ Wal-Mart’s Sources of Competitive Advantage A behemoth like Wal-Mart derives its competitive advantage from various sources. First, its low cost and efficient operations. It does a lot of little things extremely well and they all add up to a tremendous cost advantage. Second, its market position. Its small-town rural strategy has evolved into a network of stores with a relatively large number of ‘’local monopolies.’’ Third, its culture and human resources management. It’s empowered and committed associated ‘’live to work for the glory of Wal-Mart.’’ Fourth, its founder – Sam Walton – is Wal-Mart’s biggest enthusiast and cheerleader. He provided value by having a vision, setting the strategy, and creating the culture that drove the entire strategy. Questions for Your Business: How are you obtaining your returns? Lowest costs through scale advantages? Lowest costs through scope and replication advantages? Premium prices due to unmatchable service? Premium prices due to proprietary product features? Do you own intellectual property – patents, trade secrets, trademarks – which competitors cannot likely replicate? Can you deploy superior processes, capabilities, or resources that competitors cannot likely duplicate? In the final analysis, it’s not enough to identify an advantage over your competitors. The advantage needs to be sustainable and dynamic, for you to have a consistent edge in the marketplace.

Creating a Sustainable Competitive Advantage Read More »

Why Startups Fail and How To Mitigate this

Technological Startups in Africa are innovative about providing solutions to challenges that exist in Africa. However, with these solutions come several bottlenecks which eventually create a barrier to the survival and sustainability of the business. There are several factors that contribute to the failure of start-ups in Africa and the ability to learn from these failures would support a new way of thinking to help mitigate these risks. In this publication, I would be sharing risk factors from working with not less than 100 companies in the technological, FMCG, retail, agro, fashion, events, confectionary, and manufacturing in providing consultancy services and some of the patterns I found led to the business failure. 1. Huge Injection of Capital Without Traction Generating and implementing an idea has to go through several stages of design thinking to ascertain the viability of such a product before it is released into the marketplace based on the feedback from prospective end users. Due to the fact that some early-stage entrepreneurs have already built a name in the ecosystem can easily make them access funding even when an idea is still just an idea that has not been properly researched but because entrepreneurs sometimes are also very emotionally attached to an idea sometimes, they can make several assumptions without considering the facts and then begin to seek capital inflow to kick-start this idea. Traction is important because it signifies growth and growth could be seen in the form of demand which eventually leads to cash flow. Investing in an idea is too risky and even riskier for an early-stage entrepreneur with limited experience and exposure. In order to ensure an idea would scale, it is important to employ design thinking to limit assumptions. 2. Not Working With the Right Team Not Working with the right team has huge consequences in itself. A start-up should have one core, and it is in the ability to execute with the team. Because most start-ups bootstrap at their early stage, they tend to work with whoever is available and not necessarily the skilled and competent professionals who would hit the ground running and deliver the required expectations. I remember working in a pharmaceutical start-up where mislabeling of medications occurred because the professional involved was not aware of the procedures as a pharmacist would. This could have been a huge mistake if it was unnoticed until it reached the retailer who did checks and found out. The right time would limit the time a task is expected to be done. Start-ups should never play down on experience, proficiency, and competence. In fact, it is necessary to develop specific in-house procedures for hiring that fit the company’s culture. 3. Lack of Product-Market Fit A product could be a fantastic one, but if the market is not ready, then its sustainability is questionable. A very innovative start-up that came with the idea of solving the challenges of travel is GoMyWay, this Start-up was launched in Nigeria but did not thrive. Was the product fit for the market in terms of providing the needed solution to the already existing challenges, I would say yes, however, factors such as kidnapping, assault, killings have created trust in the mind of travelers and so this traveling application that was supposed to connect a traveler with a car with another traveler going in the same direction could not survive because the safety of travelers was in question. 4. Government Regulations Several administrations of government have worked tirelessly to make the business environment conducive, however, there are still gaps to ensure that the start-ups do not get gagged as their benefits are very key to economic development. The recent move to create a start-up bill to ensure that the interest of start-ups can be protected is one to secure sustainability and increase interactions with regulators in such a way that regulators understand the peculiarities of these businesses and work around policies that would not see capital investments go down the ground with just a regulation. I believe the start-up bill would create stakeholders in the overall value-chain and then ease how business is done. There are other factors that contribute to business failure and the listed are some common ones that affect businesses based in Africa. I however believe that as there is an ongoing conversation to create a roundtable for stakeholder’s interaction, there would soon exist synergy in the ecosystem.

Why Startups Fail and How To Mitigate this Read More »

About

Resources

Legal

  • © 2025. MSMEHUB
Twitter Facebook Instagram Linkedin Youtube

Sign in to the Hub

Login

Not a content contributor ?

Sign up to be a contributor