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For Startups

The Rising Costs, Reduced Revenue and the Way Forward for SMEs 

Rising costs and reduced revenue can be significant challenges for Small and Medium-sized Enterprises (SMEs). These challenges can arise due to various reasons such as economic downturns, increased competition, changes in consumer preferences, rising input costs, and other external factors.  SMEs often have limited resources and financial flexibility compared to larger businesses, making it harder for them to absorb these types of challenges. As a result, they may need to take proactive steps to manage their costs and increase their revenue.  Here are some strategies that SMEs can consider to address rising costs and reduce revenue:  Overall, SMEs need to be proactive in managing their costs and revenue to stay competitive and sustainable in the long run. 

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How to Choose your CFO Wisely

I start by highlighting that while Accounting and Finance share a thin line, it has been argued that Finance is an element or a subset of Accounting. However, their ends are the same – provision of information and insights to enhance decision-making. C-suite execs are appointed/selected based on academic and professional qualifications, exposure, and experience as well as other underlying considerations. This article underscores one of such considerations. The c-suite position of the Chief Financial Officer (CFO) is a high-level cadre with responsibility over the finances of an entity. Other c-suite positions include Chief Executive Officer (CEO), Chief Information Officer (CIO), Chief Technical Officer (CTO), Chief Security Officer (CSO), Chief Operations Officer (COO) amongst others. A CFO may be highly professionally qualified but be overqualified for an entity, while another entity might consider a CFO professionally underqualified. The article delves into intricate character-specialty of CFOs and how to make an informed choice. The CFO albeit has oversight over the accounting functions of an entity is not the Chief Accounting Officer – this is ascribed to the CEO who has overall oversight on the operations of an entity. The responsibilities of CFOs vary largely depending on size, ownership structure, and organisational culture amongst others. In appointing a CFO, by statutory regulation, there are certain requirements for specific organisations especially public interest entities (PIEs) and significant public interest entities (SPIEs). However, generally, a CFO should hold both academic and professional qualifications. I must note that currently in Nigeria, professional qualifications by ACCA, CFA, ICAN – in alphabetical order – are highly sought after. Beyond the professional qualification, is a significantly taken-for-granted phenomenon – “specialty competence”. Broadly, there are five (5) specialties in the Accounting and Finance profession – audit and assurance, performance management, taxation, financial reporting, and financial management. These specialities find relevance in both public and private sectors as well in both local and international markets. A (potential) CFO cannot be “jack of all trade”. Each (potential) CFO by interest, exposure, experience, and training aligns with a specialty and this is the question I address. Who does a business need as their CFO? An auditor? A tax expert? A financial management expert? A reporter? A performance manager? All five specialties are most assuredly represented in all organisations, while some are outsourced. Who should lead the team since we can only have one at the helms at a time. My take is this and quite subjectively – each business should review their peculiar needs and make their choice. This does not resound like a solution, but please follow on. Contingency theory helps us to understand that there is no best approach to a situation especially in different contexts, hence my escapist approach to the question of who should lead. Quickly, I will highlight few significant strengths and weaknesses of each specialty and I hope this should help businesses understand the behaviours of their CFOs too. 1. An auditor is prepped as a compliance officer and is wired for due diligence. As a CFO, they will “over scrutinise” communications that pass through their office. It is likely that the CEO and other management staff will have “issues” with them, and the major complaint will be – “don’t you trust me?”. Funnily, when an auditor hears this, it is a red flag to dig deeper. They tend to be quieter, “very” observant, a good listener and slow to act. They are critics, hence quickly identify errors. Businesses that want to develop their organisational structure will find them helpful in navigating thorny strategic issues. Additionally, given their grasp of regulations, they can ensure compliance, which is significant for businesses to thrive. 2. A tax expert is focused on maximising value for their organisation with respect to taxes. They have very good manoeuvring skills, and they use their skill to help in detecting loopholes in tax legislations and taking advantage of such loopholes. They are skilled planners, very calculative and quickly form relationships. Tax experts have the capacity to be manipulative and argumentative as well. A tax-inclined CFO will help businesses with planning, budgeting, forecasting and value. They understand the importance of value and help significantly in that regard. 3. Performance managers are tactical and strategic; always working towards value maximisation, optimisation, and realisation. They are more interested in results than process. Due to their high computational skills, ability for sensitivity analysis and tact, they are more vulnerable to quantitative results. Hence such a person as a CFO may not ordinarily consider qualitative factors that influence performance. They stick heavily to the numbers and always say that “numbers don’t lie”. A performance-based CFO is more suitable for established businesses. In a new business, they can drive performance but there is evidence that their driving force may be aggressive and inconsiderate. 4. Reporters are very versed, because of the awareness of all transactions and events in an organisation. They are not ordinarily involved in the approval process, but they are the dumping ground for all financial transactions and events. They also understand the implications of a transaction on the outlook of an organisation. It is believed that when an entity winds up, it is likely that a reporter would have resigned earlier. They know about the organisation and understand its financial position. Financial reporters are diligent and have eyes for error detection. They talk less and are confidential. The presentational skills of reporters are top-notch, and they also can be manipulative by presenting outcomes of similar transactions and events differently to different users. Reporters can help businesses to understand the implications of a transaction or event even before they occur. This helps planning and decision making.   5. Finally, but not the least are financial managers in charge of treasury. Their goal is how to raise funds and maximise value. As a CFO, they are more likely to be preoccupied with portfolio (investment) drives. Ordinarily, they are stingy and want justification for each spend. They are highly motivated and are not emotional spenders. A downside about

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Unhappy People Cannot Serve Happiness- Part 1

“Unhappy people cannot serve happiness” I was privileged to listen to the Founder of Ruff n Tumble, Adenike Ogunlesi, outline the simple yet effective ways she has used customer experience strategies to scale her business to a multi-million enterprise. Her words made me reflect on why it might still be a long journey to the promised land regarding service delivery in Nigeria, especially with MSMEs. It is sad to note that despite the plethora of write-ups and voices clamouring for an improvement in how startups handle their service delivery, little or nothing is being done about it. These businesses often forget that customers now have options with minimal attention span. This means they can easily take their money somewhere else. One then wonders why it seems to be such an unachievable feat. Entrepreneurs such as Mrs Ogunlesi, who have realised the goldmine an excellent customer service offers to a business, have jumped on the train, and they sure are not looking back. Let’s see what these strategies entail below. CX Winning Strategies for Small Businesses The below may sound mundane or even trivial, but you would not know just how powerful they are in bringing huge ROI (return on investment) to your business. Let us examine a few of them: Conclusion The entrepreneurial path is never an easy one, especially in Nigeria coupled with the growing economic difficulties.  As you seek quantitative ways to boost your business, the qualitative weigh twice as much and do not think these are not measurable because they are. It requires a lot of investment. As we round off the first part of this article, be sure to be on the lookout for the concluding part in the next publication. If you enjoyed reading this and think it is useful, please drop your questions and/or comments and don’t forget to share this. Read more: Unhappy People Cannot Serve Happiness- Part 2

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Overcoming Imposter Syndrome: Tips from an Award-Winning Entrepreneur

At one point in your life, you’ve probably experienced imposter syndrome. You felt like your success at something isn’t “all that”. You felt like everyone was exaggerating, and your success was “luck”. If you didn’t know, these pangs of doubt are called “Imposter Syndrome”. What is Imposter Syndrome? The Harvard Business Review (HBR) defines it as “a collection of feelings of inadequacy that persist despite evident success.” To understand this mind-boggling feeling from the perspective of a Nigerian entrepreneur, we spoke to Olabanke Subair, a participant of the Orange Corners 2019 Cohort, and Founder of Cyrus45, an art-inclined, eco-interior furnishing company. She describes imposter syndrome as self-doubt. “It almost feels like you’re not confident in yourself. Despite the accomplishments, achievements and visible track record, you feel like you’re a fraud because you doubt your abilities”, she says.  “Basically, it feels like being a fraudster”, her sentence drifting to an end with a chuckle. “Even when I get awards for things I’ve visibly succeeded at, I find myself asking questions like— Did I really deserve this award? Could I have done better?”       How to Overcome Imposter Syndrome as a Nigerian Female Entrepreneur “As an entrepreneur, I remember when I first started. My business was a unique one at that time, so I started questioning myself and asking why everyone was interested in my art, person, and creative skills.” Olabanke detected this feeling of imposter syndrome early in her entrepreneurial journey by asking herself why she felt she wasn’t good enough. She did some research, and found the terminology ‘imposter syndrome. For her, it was easy to say, “how can I deal with it? How can I fight this terrible feeling that deprives me of achieving my full authentic potential?” She was able to surmount this feeling by doing these:  Acknowledging that you feel unsure about your abilities is the first way to conquer imposter syndrome. When you acknowledge something, it means that you recognise it and you’re committed to finding ways to tackle it head-on. Celebrate the littlest thing! Even if it’s getting up from bed or checking off something from your to-do list, celebrate that. Olabanke would be very excited when she’s able to finish things on her to-do list, even if it entailed calling someone, or posting on social media. When you celebrate these things, it gives you a level of confidence that you’re able to achieve something. Confide in trusted friends. Tell them, “This is how I feel; this is what I’m going through.” Good company gives you good advice and helps with the support you need. They echo good things you already know about yourself but aren’t so sure of. Last year, a client wanted Olabanke to do a wall mirror for her house. She stalled for a long time because she lacked confidence in the sketch’s first draft. In fact, she almost backed out. But her friend and husband motivated her to share the sketch with the client, which she unenthusiastically did. To her utmost disbelief, the client loved the sketch. One thing that people who deal with imposter syndrome tend to do is decline new opportunities. This isn’t because they’re incapable, but because they’re scared of not doing well enough, despite evident track record. Ignore this feeling. Close your eyes and do it afraid. Most people that suffer from imposter syndrome also suffer from the “perfectionism” syndrome. Try not to believe that everything has to be perfect. Tell yourself that perfectionism is a façade. Nothing can be perfect. Just do it afraid and release. What you deem imperfect, someone else will find perfect. Whatever you’re working on, don’t hold back from releasing it. Do it first, then receive feedback before concluding it’s not good enough. Overcoming imposter syndrome is never easy. It takes a lot of work and self-determination to cripple these nagging thoughts that make you feel so small. But, as long as you choose to keep believing in yourself daily, you’ll definitely overcome.

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Aspiring Entrepreneurs Programme: Of Cuisines and Connections

The Aspiring Entrepreneurs Programme (AEP), Tertiary Edition thoroughly educates student entrepreneurs on the fundamentals of business. It also provides support for them at no cost. Currently, the programme is sponsored by Standard Chartered Foundation and Youth Business International. Mr Afolabi Tajudeen Adeola, the Founder of FATE Foundation might not be a civil engineer but he certainly has interesting thoughts on the most important type of construction work – building up youths. In translating these thoughts to reality, various programmes have been established. I had the privilege to participate in the Aspiring Entrepreneurs Programme (AEP) and here’s my story: Before the Aspiring Entrepreneurs Programme (AEP) As a fourth-year student of a federal university in 2022, I am a victim of a tussle between the Federal Government and the Academic Staff Union of Universities (ASUU). One day, my friend, Ìbùkúnolúwa Dàda, sent me a broadcast from the Union of Campus Journalists, University of Ibadan (UCJUI). The broadcast specifically targeted female student entrepreneurs for its intensive entrepreneurial training. I thought that I might be a good fit but I doubted my entrepreneurial capabilities, however, Ìbùkúnolúwa gave me some advice which prompted me to apply for the programme. The following week, I lost hope because the programme had commenced. However, God sent me a miracle through a phone call from a representative of the FATE Foundation and an e-mail of admission. I did a quick celebration spin and prepared an outfit for the next day. My First Day in Class As I walked into the fully air-conditioned classroom, I was blown away – not by the cold air- but by the scene before me. The classroom was more organised than I had imagined. It seemed like an international conference. Files, name tags and packs of books were neatly arranged on the table opposite the participants. Even in the hands of many were chinaware tea cups containing either coffee, tea or a choco drink. I couldn’t figure out what was going on so I missed breakfast. With time, I caught on to what was happening in the class. We had two amazing facilitators come to teach us about goals and thinking. Also, I met other classmates and was not surprised to discover that the bulk of the class were students from my school [University of Ibadan]. At the end of the day, the Programme Associate, Mr. Simeon Oluwaseyi Peter told me to introduce myself to the class. I managed not to stutter while telling the class that I make bags and write content. During the Programme: Cuisines and Connections The Aspiring Entrepreneurs Programme fed us with intellectual cuisines from different fields of discipline, then with actual tantalizing meals. The facilitators who took different courses in the programme were all professionals; they explained theory and gave practical examples, with real-life situations. I particularly enjoyed the session on Defining Your Market taken by Mr Adeoye Adekoya. I learned not to sell to everyone. Another interesting session was that of the Business Model Canvas facilitated by Mr Ogunsola Daniel. He strongly advised us to do away with emotions and assumptions in the world of business. I was intrigued by his words so I wrote a story around them. [Mission Impossible]  Also, if our class was given a dollar each time we enthusiastically welcomed the facilitators with our signature clap, we may have saved enough to start up our hypothetical businesses. During the course of the programme, we were divided into groups and came up with five beautiful business ideas. They are: G-Two [Group Two Waste Outlet]: Solving the problem of waste management and providing the solution of compost making. My Health: Bringing healthcare to an individual’s doorstep digitally. Sumptuous Taste: A food business targeting remote workers and business people who do not have the time to prepare meals. A-GROW: A business that provides a platform for connecting food producers and consumers. FATE Transport and Logistics: In this group, which I was a part of, we formed this business to solve the problem of transporting people and goods efficiently and economically. The Various Types of Cuisines My favourite intellectual cuisine was finance. I’ve been to many places and tasted varieties of “finance” but I dare to say that the AEP’s finance cuisine is the most delicious of them all. The ingredients were adequate in proportion and it was excellently cooked. The meal wasn’t hard like others I had tasted; it was cooked to tenderness and I’m thankful for this because it was something my finance milk teeth could chew. Moving on to the other kind of cuisine (the tantalizing meals), the sponsors of AEP understood that learning requires sound health and a sane mind. A popular saying goes thus: “a hungry man is an angry man”. Therefore, in the course of this programme, all students were fed with two important meals of the day – breakfast and lunch. The Jollof and Fried rice combination with a side dressing of fried plantain or coleslaw and meat was my favourite meal. The quality of the meals was nothing short of top-notch. Standing before kings requires a platform to meet kings. Moving on to the area of connections, AEP offered that platform freely to all the participants – some facilitators offered to start a business with some students, providing an opportunity for growth and profit making. Still speaking of connections, mentoring sessions were held during the course of the programme. Having experienced entrepreneurs to guide you is important; cheers to FATE Foundation for meeting that need. Highlights [Visits] Football fans may understand the feelings that come with watching the highlights of a well-played match so my apologies are to non-football fans who may not fully understand the emotions of highlights such as these. I will now proceed to describe some major highlights of this programme: 1. Entrepreneurial Visit to My World of Bags On Wednesday, August 17 2022, we took a trip to the workstation of My World of Bags. We had the opportunity to learn from Mrs. Femi Olayebi, CEO,

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Defining Your Business Hypothesis

“No business plan survives first contact with customers” – Steve Blank, Silicon Valley entrepreneur. The lean startup movement, pioneered by Eric Reis, is an approach for dealing with the inherent uncertainty in entrepreneurship. It is particularly well-suited to early-stage startups when: The starting point of the lean startup approach is the creation of a Minimum Viable Product or MVP. The MVP allows you to go to market and test the response of the market to your product and/or service. The MVP could be a physical product, software, or service. How to Define Your Business Hypothesis The form of the hypothesis is as follows: I believe [target market] will [do this action/use this solution] for [this reason] Hypotheses are usually based on assumptions. You need to isolate the most important assumptions for your product and/or service and test them first. Based on the work of Tom Eisenmann of Harvard Business School, assumptions fall into four key categories. Each category could give rise to several business hypothesis as follows: 1. Customer Value 2. Technology and Operations 3. Sales and Marketing 4. Finance and Profit As a team, consider each assumption and rate them: Select the assumptions with the highest scores as your key assumptions and hypotheses. Once you have identified your most important assumptions and hypotheses, you need to conduct preliminary experiments.

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Cyber-attacks: What, Why & How

In Q4 of 2021, there were an astonishing 1,353 cyber-attacks weekly in Africa, in comparison to an average of 925 cyber-attacks in the world.  Cyber-attack is a form of digital assault using computers, networks, or devices with access to the internet; directed towards other computers, networks, or devices with access to the internet which threatens public safety, national security, and economic security. Cybercriminals usually compromise systems and steal financial, property, and/or intellectual property such as business or customer financial details, sensitive personal identifying information, customer/employee emails, databases, and so on.  As internet penetration is increasing, and more and more people are interconnected through the digital world, there is an increase in cyber-attacks. Examples of typical cyber-attacks are email compromise, identity theft, ransomware, phishing, online predators, and espionage. These attacks damage computer hardware and network, give unauthorized access to data, and in some cases physically harm people.  In order to protect your business or yourself, it is important to have a comprehensive security plan and infrastructure that offers protection. Out of 182 countries, Nigeria ranks 47th on the 2020 Global Cybersecurity Index with about 84.76% of measures taken to ensure protection. Mauritius, the highest-ranked in Africa and the 7th ranked in the world, has taken about 96.89% of measures to ensure protection.  So what exactly can be done to protect yourself? Use strong passwords that are reviewed and changed at least quarterly  Update your software frequently and/or have automatic updates activated  Turn on and use multi-factor authentication Apply firewalls and IPS Have segmented networks Be cautious before you click on links or download attachments  Most importantly educate yourself, your family, colleagues about cybersecurity Most cyberattacks come from email compromise, if the email sounds too good to be true, it probably is, therefore do not click nor download, just hit delete.  Contact Versa Research your trusted data, research & consulting partner! References https://techpoint.africa/newsletter/techpoint-digest-236/?utm_source=mailster&utm_medium=email&utm_term&utm_content&utm_campaign=techpoint Africa digest https://preview.mailerlite.com/t8e9n4e2t5/1862154675466279540/l5f7/ https://www.fbi.gov/investigate/cyber https://www.ibm.com/topics/cyber-attack https://www.nibusinessinfo.co.uk/content/reasons-behind-cyber-attacks https://guardian.ng/technology/nigeria-lags-behind-mauritius-ghana-others-in-cybersecurity-ranking/

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How to Create a Prototype

“A prototype is not an end in itself but a means to an end – the validation of your idea.” – Professor Karl T. Ulrich, Harvard Business School   Creating Physical Goods According to Professors Karl T. Ulrich and Steven D. Eppinger, in their 2015 book “Product Design and Development” there are two focused and comprehensive prototypes. A focused prototype reflects just one or a few dimensions of the performance of the product being developed. It can be referred to as a test rig or a mock-up. A comprehensive prototypes are fully functioning products, which goes through successive refinement and often goes by the term ‘’proof of concept, alpha, beta, pre-production, etc.’’ They go through cycles that help the team achieve milestones and demonstrate progress. Prototypes of physical goods are useful for the following reasons: A tool for learning Solving problems Answering the question “do you have product-market fit?” Proof that the solution works technically Proof of user acceptance and customer adoption Visual communication of your idea Demonstration of your ability to implement the solution Creating Software Practical steps for building a software prototype include: Gather user requirements: Interact with the user and discover his needs and demands Develop an initial prototype that is static and of low/medium fidelity: An example of this initial prototype could be a hand-drawn sketch or a visual tool such as Microsoft Word, Photoshop, Visio, or PowerPoint Get initial feedback: Share this prototype with users and get feedback Develop an interactive prototype of medium to high fidelity: An example of this interactive prototype could be produced from wireframing tools like Azure, Balsamiq, and OmniGraffle Get feedback and iterate: Continue to get feedback on the product and pivot or change the prototype in line with the user’s requirements Proceed to development Creating Services The approach for creating a prototype for a service business is often called the “Wizard of Oz” approach. This entails providing the front-end of the service digitally and delivering the back-end of the service manually. This is not usually very capital-intensive. There is usually no need to work with third parties to develop the full product, as the delivery of the service can be done in-house. An example could be a landing page, or a blog post describing the product. It could be used to test user responses through sign-ups, expressions of interest, etc. Action Steps Test your idea by creating a prototype in any of the following forms: Physical Goods Software Services

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Clauses to Look for in a Contract

A contract is a legally binding agreement that is enforceable by law. It is important for parties to critically and diligently review the clauses in a contract or seek the services of their lawyer before execution, in other words, before appending a signature. Here are 10 clauses to look out for in a contract before signing. The Parties – Ensure the parties are clearly defined and they are persons known to law. For instance, Nelson is not known to law but Nelson Your Surname as appears on your birth certificate or passport is known to law.  Rights and Responsibilities – It’s important to know the rights and responsibilities of each party. Never speculate or rely on oral understanding. Consideration – Ensure that a monetary clause is clearly defined including the specific amount, the mode and manner of payment. If it’s in-kind compensation e.g services, state so as well Liabilities – Standard contracts provides what and who would be liable for any action arising from the contract. Confidentiality Clause – You need to know the information you are not permitted to disclose or other sensitive matters that require confidentiality. Remedies clause – If something goes wrong, you need to know the remedies available. Indemnity clause – This clause means a party agrees to protect another from liability or loss that may arise out of the contract. Take note! Reference to additional documents – If a contract refers to another document, kindly note and diligently review them. Do not assume. Termination – In what instances can the parties terminate the contract? It must be clearly stated. Dispute Resolution – how and where do parties intend to settle their differences or any dispute that arises out of or in connection with the contract? This must be clearly defined. Ensure to diligently review every contract before signing or have a professional do that for you to avoid being a victim of individuals who generally want to scam innocent people. Engage with a lawyer here

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