team

Last on the pre-business list is Team.

Many entrepreneurs the world over, got themselves burned out, or simply gave up before their bright ideas could reach their full potential, because they thought they could do it all on their own. Human beings are social creatures; we’re not built for isolation. You can’t succeed on your own. You need, at least, one person in your corner.

As an entrepreneur, you need a support system – people who can and will encourage you, people you can draw strength from, people whose faith in you keeps you going. This support system can be your family, friend(s), mentor(s), partner(s), spouse, team, or all of the above.

A team is unique. It could be made up of family and/or friends. Most entrepreneurs are very reluctant to bring people on board, because they could be swindled by them, or become problematic/more trouble than they’re worth. Those are possible scenarios and very valid reasons, that’s why the kind of people you pick is necessary. Notice I said “you pick”, that’s because you do the picking, not the other way around. You should pick people who share your drive, share your passion, and most importantly, share your vision.

Once you have like minds working with you, you have people you can bounce ideas off of; people to brainstorm with; people to take on the world with; people who can do certain things better than you can; people moving your business forward by investing their contacts/talents into it; people who push you to be better, people who build, inspire and motivate you; people ready to go the distance with you. That is a team!

cash

Next on the pre-business list is Cash. It is the blood of the business; hence, essential to its survival.

Cash refers to the money coming in (revenue) and the money going out (expenses). To be successful, your expenses should never be consistently more than your income; luckily, this is actually manageable as it is pretty easy to determine and control [to an extent] your expenses as they would most likely be recurring (fixed/overhead costs or operational expenses) – utility bills, rent, salaries/wages, new inventory, and so on.

You don’t necessarily need money to start, but to grow and expand, you need money. Money can come from family, friends, grants, angel investors, partnerships, bank loans, or venture capital. If you’re seeking investment, you should seek in that order.

Before seeking investments and venturing into business, you need to, first, be disciplined with your personal finances. If, for example, you’re a spendthrift, and you don’t get your spending under control, you will bring that weakness into your business; before you know it you’re taking funds from your business is offset personal debts, and it’s a slippery slope from there.

Disciplined people work with budgets, so if prudence is a challenge for you, or you’re prone to it, you need to create a budget. A budget is simply creating a balance between your income and expenses, so you don’t spend more than you earn. A good budget has income portioned primarily into bills (phone, internet, power, water, heat and so on), groceries, savings, transport fare/fuel for vehicle and/or generator (gas/diesel), clothing, and miscellaneous (birthday cards, gifts, medical emergencies, repairs and so on). Everything has to be properly planned such that there are no constraints.

Beware, it is one thing to have a budget, and quite another to follow it. The true discipline is sticking to it long-term, and adjusting it as you see fit as income increases/decreases or responsibilities increase/decrease.

As soon as you’ve mastered making and following a budget, you can apply the principle to your business. However, this time, the budget will be called an Income Statement. Remember to ensure your expenses don’t surpass revenue too often, or it will be RIP business venture. Once you can maintain cash flow and steadily increase revenue, while keeping expenses low, you’ve begone to make a profit. You make enough profit, you can start repaying loans, and reinvesting into the venture. Now, you’re in business!

wave

After discussing the possibility of a consulting partnership with Omasan O*, an ambitious gentleman I met in Abuja late last year, he told me to also consider working with an equally ambitious lady passionate about helping young people take charge of their destinies. He couldn’t say enough good things about her – she’s smart, went to ivy league schools, driven, and so on. My interest was piqued. I looked her up, and indeed, Misan Rewane is all he said and more. Her vision – West African Vocational Education (WAVE) Academies – is to train West African youths in relevant vocational skills and empower them to gain and maintain employ-ability, place them in suitable, stable jobs with its employer partners, and support them through monthly workshops and mentorship.

I’m also passionate – about helping people start viable business ventures, business ventures that, in due time, will create employment for others. So, Omasan thought our passions intersected at some point, and I agreed. On that note, I sent her an introductory message on Facebook. I told her about Herança Financial, our offerings like entrepreneurship coaching, supervisory training, and so on. I told her I recently returned to provide similar services to Nigerian businesses and entrepreneurs. She responded favorably in a timely fashion, and got me in touch with her associate, Folakemi O*, who connected me with Morinola O* and Modupe A*. I explained my angle to them – there might be a few students every batch, if not all, that would benefit from a crash course in small business management, and there might be those who don’t want a job and would much rather be in business for themselves, or have a long-term goal of being self-employed. They agreed, and even suggested an alternative where WAVE could offer a special course in entrepreneurship development/training for youths considering starting their own business.

Anyway, long story short, I gave my first lecture at WAVE yesterday. I used my usual Entrepreneurship 101 format. It was fun. The students, or trainees (as they are called) were attentive and had a lot of questions too. Modupe A* had a few of them share what they learnt when I was done, and I was very pleased to know that it all sunk in.

Afterwards, I finally got to meet with Misan in the flesh. She definitely is passionate about solving unemployment in West Africa. From all I saw firsthand, and all she told me, as startups go, they’re definitely not doing badly; especially for a not-for-profit. However, they have a long way to go, and they require more funding – preferably in form of grants – to get there. They (Misan Rewane, Karan Chopra, Bryan Mezue, and Navid Rahimi) were initially able to start by winning a grant through the Harvard Business School (HBS) New Venture Competition – Social Enterprise Track. Now, they also generate funds themselves – from tuition fees (currently ₦10,000.00 NGN), and job placement commissions (one-third of first month salary), but primarily from the job placement of the trainees; essentially, they don’t get paid if their graduates don’t get placed. That’s what I call commitment.

Naturally, being Nigerian, the project started here in August 2013 with 12 trainees. It has since grown – 128 trainees (on a budget of $125,288.00 USD) between 2013 and 2014. They’re focused on 500 trainees by the end of this year (on a budget of $410,000.00 USD), and the goal is 25,000 trainees (on a budget of $1,040,000.00 USD) every year from WAVE centers all over West Africa by 2019!

Over the past year, not only have they been able to secure a training center in Lagos, Nigeria – WAVE Hospitality Academy, 3 Spencer Street, Alagomeji, Yaba, under Misan’s leadership, they have also been able to partner with 55 employers and achieve a 70% successful job placement rate for their graduates – 156 of them have been able to double their income; now earning $200.00 USD (about ₦43,000.00 NGN) monthly. Come August 12th, WAVE Academies will be two years old, and moving to a new office site! It is still in Alagomeji, Yaba, but at 51 Hughes Avenue, off Herbert Macaulay Road. Oh, and did I mention they have been nominated for the UN Impact Sourcing Award?! It is a big deal, so please take a moment to vote for West African Vocational Education (WAVE) via link. Show our very own some love.

By the way, if you’re reading this, and would like to enroll for their 3-week training program, please click. You can also get in touch with them by calling +234-1-291-6586 / +234-817-723-6025, or visiting waveacademies.org.

I have no doubt that in no time, with continued support from organizations like, Agora Fund, Berke, Box.org, Cordes Foundation, Draper Richards Kaplan Foundation, Echoing Green, LinkedIn for Good, Salesforce Foundation, and private individuals, like me and you, WAVE Academies is going to be an even bigger success story – changing the lives of the over 50 million unemployed and underemployed youths – not only in Nigeria, but in Benin, Niger, Togo, Mali, Burkina Faso, Ghana, Cote D’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, and Cape Verde 🙂

entrepreneurship 101

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
 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!

suc

As promised, I’m resuming with the pre-business list, and next up is Start Up Costs (SUC). Start Up Costs is basically everything your business venture requires to get up and running. If you’re a serious entrepreneur, it will be a part of the Financial Analysis section of your business plan.

I’ll segue here, just in case I haven’t previously emphasized the importance of a business plan. It is absolutely crucial. It is your road map, and possibly one of the most important documents you will ever own. A good business plan should have an Executive Summary, Company Overview, Market Plan, Operations Plan, Financial Plan, and Corporate Image Package (CIP). The Financial Plan should consist of the balance sheet/personal networth statement, start up costs (SUC), revenue model, projected income statement (profits and losses), and projected cash flow/projections (monthly, 1 year and 3-5 year projections).

The Executive Summary and Financial Plan are the two most important sections any investor worth his/her salt would want to inspect first, more so the financials. Therefore, do not make the mistake of educated guesses or guesstimations; not only will that reduce its credibility, but you will grossly underestimate what is required, and consequently run out of money. Hence, when preparing your SUC, you have to really take the time to think everything through, make a list and do your research on the costs/prices of the requirements.

Generally, your SUC should basically center around current assets (like cash-in-bank, and inventory) and fixed assets (like equipment, and office space). By way of example, a standard SUC sheet should contain: furniture – abc amount, internet/telephone set up – xyz amount, consultation/license fees – abc amount, desktop computer/laptop – abc amount, car/van – xyz amount, and so on. You should even list assets required that you already own and their current values., as well as prepaid expenses, like company registration fees, and so on.