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think

March 28, 2020 1 comment

Pensive

Why are you in Nigeria?

I’ve been asked that question more times than I can count. My answer is usually the same – I have some ventures I’m looking to explore. Sometimes, there are looks of confusion, heavy sighs, or just good old-fashioned disbelief and head-shaking. But, I understand. Someone moving to Nigeria from Canada, at time when people are leaving Nigeria for Canada in droves, is puzzling. I guess my “interviewers” are wondering whether I know something they do not. Maybe I do.

I lived in Canada for eight years, and within that period, started three different businesses there that did fairly well (most popularly, Pearl Kreations) before I moved back. I came here to set Nigerian subsidiaries and explore other possibilities. I did I come with a mindset to introduce new concepts, disrupt/turn things around and rake in millions? Absolutely. Have I been humbled? Most definitely. Have I done well? Yet to be determined. I’m joking; by God’s grace, I’m doing well. However, here’s what I’ve realized about entrepreneurship in the Nigerian economy – there readily is no reward or support for competence, effort and ingenuity. The system largely favors those with access to power/political connections and rewards them with highly lucrative government contracts and ridiculous grants. Vusi Thembekwayo put it this way – if you look at how the top 25 wealthiest and most celebrated people in your country made their wealth, you can easily determine the type of economy you live in. Did the top 25 wealthiest Nigerians all build their businesses from the ground up (without backdoor deals and government favors)? You decide.

Of course, there are/will be exceptions to the rule, and certainly, you can live comfortably as an entrepreneur, especially if you’re a professional, like an accountant or architect. Anything other than those, would be tough, but not impossible. However, real wealth may elude you. As you may have concluded, there are very few entrepreneurs in this country who have built substantial wealth without connections or government contracts/favors. That says a lot about our business environment. This is particularly disappointing for me because a little over ten years ago, I had a totally different experience.

After running my first business for about a year, I applied to be a vendor for the Vancouver 2010 Winter Olympics. I noticed there were vendors for all manners of merchandises, but no one selling button-badges (which was my product). I saw that opportunity and applied. I got a response requesting for, what then seemed like, all sorts of random documents. I can assume now, in actuality, they were probably things like business registration documents, bank statements and so on. I replied the email stating that I was a freshman at McMaster University, had started a small business, saw an opportunity and decided to take it; I had none of the documents requested of me. A few days later, I was approved! I got sent all the documents verifying my business community membership by mail, and a congratulatory email as well. Just like that, I got in. No connections; except God, of course.

Small businesses are the backbone of any economy, and in recent years, it seems Nigeria has caught on. Things are still a little dodgy, with hints of favoritism here and there, but improving. I’m thrilled that with the impending COVID19 lockdown, so many people have gotten fired up to start a venture of their own, either to complement their income, or in transition from former employment. Whatever the reason, the best time to start is now.

However, in my experience, a lot of Nigerian SMEs aren’t equipped to take advantage of the new business environment and emerging opportunities. They are simply not very creative in their quests for business opportunities. They’re not entrepreneurial. I’ve discovered that what most people get into, and aspire to go into, once they have some capital is trading – purchase and resale of goods – and this makes them traders, not entrepreneurs.

Entrepreneur is a word that has become so loosely used, people think it’s a synonym for business owner. The fact is, not every business person is an entrepreneur. By the way, with the way things are going, except you’re selling foodstuff or hygiene essentials, you’re in the wrong business (as a trader).

The truth is, people pay for solutions, and entrepreneurs are solution providers.

Entrepreneurs create products and/or services that meet the needs of people for a profit. Entrepreneurs meet needs and get paid for it.

If you really want to be successful and wealthy, as an entrepreneur, you need to solve problems.

We tend to think too small here in Africa. The average entrepreneur is scared to be ambitious. Rather than thrive, they’re content with surviving. Well, I won’t stand for it. I’m incredibly passionate about small business, and for the past three years, have devoted most of my time into Herança Financial, the venture through which I work with/help budding entrepreneurs start, grow and manage their businesses. Coupled with my personal experiences, I’m somewhat of an expert in business (humble brag). So, with current state of the nation and the shape of the economy, I think now is as good a time as any, to share my knowledge and expertise with a greater number of people, and help them start the right way and avoid the unnecessary hardships that ignorance tends to lead.

First of all, I’ll reiterate. An entrepreneur identifies a need and works towards satisfying it, or works towards improving upon an already existing product/service, or creates demand for a product/service of value i.e. creates a need and provides the solution. The provision of the solution brings the reward – money. The bigger the problem, the bigger the reward for its solution.

Once you have a solution, please ensure the product or service has a Unique Selling Point (USP). A USP is the mark of distinction of any business. It can also be referred to as your value proposition. In all likelihood, your company won’t be the only one offering that product/service (at least, not for long), so it’s important to have either a feature, advantage or benefit that’ll separate your business from current and prospective competition. Without a USP, you won’t stand out. Please note, lower price is not a good strategy for a small business; it’s just not sustainable.

Next, identify your target market. Never make the mistake of assuming your product or services will appeal to everyone. You’re dreaming. However, your target customers will want and appreciate your products or services. They can be grouped into primary, secondary and invisible; I’ll explain later. Just know that they are the persons or businesses with the highest probability of buying your products or services. Once, you’ve identified them, profile them. Your profile should include their locations, spending habits, hobbies, and age group. These will help you know how much they would be willing to spend on your product/service and the best way to reach them. I like using Indomie Noodles as an example. Their target market isn’t everyone, it’s children. Children are their primary target market. That’s why their ads are so playful and colorful; why they invented “The Indomitables” (Superheroes) figurines and stickers; why their ads are on television and radio, not Facebook, Instagram or Twitter (most children are not on social media). They have bigger sizes (like Hungry Man and Belleful) for adults, their secondary target market.

With the proper identification of your target customers, you need know your competition. Your competition is the person or business who offers the same products/services or benefits (as perceived by your target customers). They can be grouped into direct, indirect and invisible. Direct competition are those that offer the same products/services you do; for example, Coke and Pepsi. Indirect competition are those that offer the same benefits; for example, Domino’s Pizza and KFC – different products but same benefit (fast food). Invisible competition are those you didn’t consider. They usually the bigger players that have the capacity [and potential desire (especially if you’re successful)] to offer the same product/services or benefits as you. By understanding your competition, you gain competitive intelligence. Competitive Intelligence is the process of learning, collecting/gathering and using information about your competition for the purpose of growing your own business. It helps you to keep improving upon or redefining your business model, so you’re not easily surpassed.

I’m sure I’ve given you more than enough to think about, so I’ll stop here.

The first step is to sit down and think! Find a need, preferably in an area you’re passionate about. Ask God to reveal the solution to you, and provide you with the means to execute it. Entrepreneurship isn’t just about the idea, but the execution of the plan. And as you execute, remember, please think globally. Find the application of the solution not just within your locale, but regionally and worldwide. The world is bigger than Nigeria.

All the best!

entrepreneurship 101

April 13, 2015 Leave a comment

Every time I’m invited to give a lecture, or speak on entrepreneurship/starting a business, I have an outline I usually work off, and then, I give illustrations the audience can identify with to expatiate. Today, I’ve decided to share that outline for the benefit of those whom I may never have the privilege of speaking to (physically or virtually); at least, my words/writing may exceed/extend my reach.

Entrepreneurship 101

ENTREPRENEURSHIP
 Entrepreneurship starts with a need, and then, an idea on how to satisfy that need.
 Entrepreneurs are people who identify a need and work towards satisfying it, or improving upon an already existing business concept. They provide products and/or services to satisfy specific needs while making a profit.
 Entrepreneurs need to be POP – Passionate, Opportunity-Seeking, and Persistent – in order to be successful.
• Passionate: Passion is the intense love you have for and the satisfaction you derive from what you do. If ego, family, or money is the only reason you decide to become an entrepreneur, entrepreneurship may not be for you. A lot of times, it is only the passion for what you’re doing that keeps you going.
• Opportunity-Seeking: You have to develop the ability to see the favorable chances/uses for your product or service everywhere.
• Persistent: Don’t get easily discouraged. Be prepared to hear “no” a lot of times before you get a “yes”.

SMALL BUSINESS
 A small business is any business one plans to start, or an idea one plans to introduce to the marketplace.
 Any entrepreneur can be a business owner, but not every business owner can be an entrepreneur. This is because an entrepreneur is unique in his/her approach to business.
 If you fail to plan, then you plan to fail; 30% of small businesses fail after two years of business because they had no business plan – not enough research/planning, little funding, poor management, and/or no adaptive measures.

BUSINESS PLAN
 A solid business plan is the foundation for any successful business.
 A good business plan has an executive summary, company overview, marketing plan, operations plan, financial plan, and sometimes, a customer service plan, funding plan, and networking plan.
 A business plan gets you funding from investors, not a business proposal.

PRODUCT OR SERVICE
 Unique Selling Point (USP) is the mark of distinction of any business. It is what separates your business from current and prospective competition. It generally should focus on FAB (features, advantages, benefits), not pricing.

TARGET MARKET
 Never make the mistake of assuming your products or services will appeal to everyone. There is no such thing.
 Your target customer is the person or business with the highest probability of buying your products or services – primary (high demand for your products/services), secondary (needs convincing to buy your products or services) and invisible (never considered would require your products or services).

COMPETITION
 Your competition is the person or business who offers the same products/services or benefits, as perceived by your target customers – direct (offers the same products/services), indirect (offers the same benefits), and invisible (has the capacity and desire to offer the same products, services or benefits).
 Competitive Intelligence is the process of learning, collecting/gathering and using information about your competition for the purpose of growing your own business.

FINAL WORDS
 Know when to move on to the next idea. Entrepreneurship isn’t just about the idea, but the execution of the plan.
 Always refer back to your business plan, and update it as your business evolves.
 Funding options – Family, Friends, Grants, Angel Investors, Partnerships, Bank Loans and Venture Capital.
 You cannot do it all alone – build a team or support system (family, friends, partner etc.)
 Customer satisfaction, not money, should be your primary goal.
 There will be good times, and there will be bad times, but it’s an exciting journey. Enjoy it.

There are no illustrations, but I do hope this makes a difference in your business life. All the best!