200 Digital Start-Ups Vie For Forbes’ $100k Accelerator Programme

Forbes Digital Start Up

Forbes Magazine has selected 200 Nigerian businesses, from different industries, for its digital start-up accelerator programme.
The businesses emerged from a review of over 5,000 submissions and a competitive application process. They are currently undergoing a four-week virtual accelerator programme, featuring top speakers, investors and influencers. They include Tom Davis, Chief Growth Officer at Forbes Magazine, Liz Walsh, Vice President of Marketing at Forbes Magazine, Ambassador Mary Beth Leonard, United States Ambassador to Nigeria, Jenny Foltz, Deputy Public Affairs Officer, United States Consulate in Lagos, Christine Ntim, Chief Marketing Officer at Global Startup Ecosystem and Einstein Ntim, Chief Executive Officer at Global Startup Ecosystem.
Powered by Global Startup Ecosystem, with support of close to 100 partners, the online training is also open to small businesses and freelancers, and aims to help participants in building and scaling their businesses. It is free, without obligation or equity ask. Accepted businesses will access $100k in free credits and perks from Amazon Web Services, Google Cloud and IBM Cloud. Participants in the programme are:

1. Alabian Solutions Ltd

2. Touchcore Technology Limited

3. Neohaul Technologies

4. Riltouche and Sparkles Ltd

5. reQuid Technologies Ltd

6. Bamboo

7. Gricd

8. Diimtech

9. Pillarcraft

10. Cyhermes Limited

11. Palment Business Solutions

12. CynbaNews

13. Wealth Tech

14. Farmers’ Corner

15. Vinsighte

16. Traindemy

17. Arnergy

18. FarmKonnect Agribusiness Nigeria Limited

19. The Eat Drink Media Company

20. PalmPay

21. Firstlincoln Technologies

22. Gradely

23. Chaka

24. Betensured Group

25. Citizens Gavel

26. ePoultry.NG

27. CodeLn

28. Arewa Kasuwa & Logistics

29. Africave, Inc

30. Scrapays Technologies Ltd

31. Publiseer

32. Naija Startups

33. ParkWellWell

34. Agrilet Limited

35. ForaDux

36. First Medtrade Africa

37. Workload.ng

38. Skooleeo Technology

39. Quba Exchange

40. kolopay

41. HostNowNow Limited

42. TrepAfrica Innovation Space

43. Revocube Technologies Limited

44. ShapShap

45. Despatch NG

46. Vesicash Innovative Technologies

47. ProximateAGRO Solutions

48. Mobilecooks https://mobilecooks.com.ng/

49. InstiQ

50. Safehouse Innovative Solutions Limited

51. Greenera Technologies

52. Schucks Media Ltd

53. Ikonik

54. Uduaa

55. Experis Immersive

56. HouseAfrica

57. Staffbus Integrated Technologies

58. Innovantics LTD


60. Filta.NG

61. Curacel

62. Fresible Music

63. Edves

64. Wellvis

65. Mazzuma

66. ResearchRound

67. OneHealth

68. Virtouscore limited

69. Minestake Technologies

70. Retailar

71. Viostec

72. Cashbudy Nigeria

73. Farmsby Limited

74. Biko.ng

75. Corpreneur

76. GoPaxy

77. Vasiti.com

78. Liveizy ltd

79. Button

80. Yuli Interior

81. Fuerte Technology Solutions

82. TechBridge Consulting Limited

83. Roqqu

84. Cash Your Passion, Africa

85. Olamax Exchange

86. TrueSaver Limited


88. Damisa Gurus Ltd


90. Paperbags by Ebees


92. Manna

93. Bookers International Schools

94. Hygeen & Integrated Services

95. Solar Sister Entrepreneurs Nigeria Ltd/Gtee

96. Energy4All Ventures Limited

97. NexusMesh

98. Seams

99. Biostar Green Solutions

100. Greenspace Recycling Services Limited

101. CutStruct Technology Limited

102. HomeClass Nigeria

103. Farmers Gate Trading Nigeria LTD

104. Smiley Socks Company

105. Palette Business Solutions/Techland


107. The Silver Castle

108. Preskriber Health Tech

109. Farmz2U

110. Medics2You

111. Agrinotech.co

112. Farmspeak Technology

113. Analytics Intelligence

114. Kalibotics

115. Gotlodge

116. Chekkit Technologies

117. Jimbo Jobs

118. Solarflares Energy Limited

119. Go Ads

120. Brainy Educare

121. Flat Freight Global Logistics Limited

122. Privi Test

123. FastPace Logistics Limited

124. Simbi Interactives

125. esopos

126. Finaclusion

127. Eatonhill Investment Ltd

128. Payu Limited

129. Finance Life Technologies Limited (trading as Riby)

130. Thinkshifts


132. Things4rent Ltd

133. Powerstove Offgrid Electricity Limited [POEL]

134. Live SmartCity Technology Development

135. 3LOGY

136. Pickmeup services

137. Kasuwa online

138. Spendify Technologies


140. Indigo Feeds Company Nig Ltd

141. The Paper Packaging Company

142. Afrozo

143. Wikiwriters Nigeria

144. Cartehub Africa

145. Ligo smart city Ltd

146. Lumi Pro Tech

147. Nigenius

148. Okike Media

149. Crediometer

150. Wificombat Academy

151. NUDC

152. Digital Adplanet

153. HoBeei

154. Etradefair expo

155. Elcutiee Services Limited

156. Efarmagro enterprise Nigeria limited

157. Glams Concepts Limited


159. Bodylikemilk

160. Infibranches Technologies Limited

161. Hubryde Limited

162. Sewexpress

163. Triangle Educational Foundation

164. CardCentre Nigeria Limited

165. TinX studio’s

166. Onibata mall

167. Konar App Innovations

168. Next Professionals Mentoring Initiative of Nigeria

169. OncrackTV

170. Nuban Beauty Ltd

171. Vybe


173. Clique

174. Steripro Nigeria Limited

175. Vows and Vendors

176. ICreate Evolution Africa

177. Payattitude

178. DriversNG


180. Josla

181. Akiddie

182. FarmFunded

183. farmer first tech agro ltd

184. InvestNaira (Ark Builders Compound Enterprise Limited)

185. Housemates Technologies LTD

186. WATU Financial Technologies Ltd

187. Scuudu Labs

188. Mytrip Nigeria limited

189. HighTable Africa

190. Alerzo


192. Farm Fresh Grocery

193. Treeple Cloud Digital Agency

194. Cinematix

195. Teens Can Blog

196. PENG

197. Projaro Digital Services Limited

198. Agrolush NG

199. ahraha.com

200. ForeLearner Concept Limited

For more information on the programme, visit https://forbes8.forbes.com/nigeriaaccelerator. For partnership opportunities, contact hello@globalstartupecosystem.com.
* Do you need help in starting or scaling your business? Explore your options at https://smefinance.org/thesmelab.

* Would you like to chat with aspiring and practising Small Business Owners about how to grow your business? Join THE SME GROUP, our official Facebook page, at https://www.facebook.com/groups/smefinance/

How To Set Up The Payroll System For Your Business

As a Small Business Owner, your job description includes ensuring that the people who work for your business get paid as and when due. You must also ensure that the business only pays for work done or service rendered, that the business tracks the hours and days of work or service recorded by the people it has engaged to do so. This is where the payroll system of the business comes into service.

Payroll is an essential function of any business. A Small Business Owner must understand the need for a payroll system, how it works, the one that is best for the business, its cost, and how to set it up.

A business with a few or a growing number of employees will have great difficulty in manually tracking their work hours, work days and earnings. It will get more challenging as the business runs its monthly cycles while striving to comply with the relevant Federal and State laws, and making the mandatory deductions from the earnings of its employees. After paying its employees each month, the business must also track the year-to-date spending on payments as staff salaries. A business will be overwhelmed and distracted if it tries to perform these administrative tasks manually. It is therefore important to automate them.

A functional payroll system should automate the requirements of accurately running the payroll of the business. It should automatically calculate how much each employee should be paid on every pay day, according to the number of hours or days of work. It should track and pay them correctly. A big advantage of using a payroll system is that taxes are automatically deducted from the pay cheques of employees. With an automated payroll system, the Small Business Owner will be saved the worry of paying payroll taxes or misreporting the wages of an employee, which will bring the additional benefit of freeing the attention and time to focus on running the business.

To find the right payroll solution, the business must assess its revenue, and understand the system that will best serve its purpose. Here, the Small Business Owner could choose between doing its payroll work in-house or outsourcing it to a third party. Where the business is small or in its start-up stage, the latter option is advised as it frees the business to focus on its core activity. In this case, the business can engage a Payroll Service Provider, and make payments on a monthly or per-payroll basis. A monthly pay structure will entail a base monthly fee, plus a fee per employee while a flat monthly fee will allow unlimited payroll runs at no extra cost.

In choosing a payroll system, the Small Business Owner will start by assessing the needs of the business. He or she will be looking for features like multiple payment options, which will allow the business to pay its employees through direct deposits into their bank accounts or issuance of cheques to individuals or any such instruments that are convenient to both parties. The system should also be able to handle statutory deductions, employee compensations and produce detailed payroll reports. It also helps for the payroll software to integrate with the human resources software. Once the business decides the payroll system that it needs, it is time to look for service providers who can fit the purpose. In picking a service provider, the Small Business Owner must consider the best one for budget, without foregoing set requirements or falling into the temptation to settle for a less expensive option that doesn’t meet the needs of the business.

For a minimum, the payroll system should function in a human resource and finance capacity. It should interface with finance because payroll is a key overhead cost of the business. It should also perform a human resource function because it involves tracking hours and days worked by employees, and bears information on benefits.

Setting up a payroll system for a small business is fairly simple. Once the Small Business Owner understands the payroll system that is best for the business and its staff, he or she will proceed to choose a service provider to work with. They will agree on a service plan, following which the business and the service provider will on-board the employees by getting them to provide their personal, employment and tax information. Thenceforth, the payroll software will function in an intuitive and efficient way, by automatically calculating and providing for all emoluments and deductibles related to each employee’s wages.

In summary, an automated payroll system is a necessity for a business that plans to grow. It is not optional. While the payroll process could be daunting for a small business, the use of a payroll software and a payroll service provider offers a seamless solution that automatically calculates deductions, and gross and net pay. More importantly, it will keep the necessary paperwork in one place that is easily accessible to the owner and managers of the business.

Do you need help in setting up the payroll system for your business? Let’s explore your options at https://smefinance.org/thesmelab.

Would you like to chat with aspiring and practising Small Business Owners about the payroll needs of your business? Join THE SME GROUP, our official Facebook page, at https://www.facebook.com/groups/smefinance/

Crowdfunding As Source Of Capital

Crowdfunding is an option for raising money for financing a project or business. It enables the fundraiser to receive money from many people by use of an online platform. Instead of the more common process of getting big amounts of money from a few people, crowdfunding asks thousands and millions of people for small amounts of money, and does so over the internet. Crowdfunding gives entrepreneurs access to a wide audience of potential investors, rather than trying to find a few big investors. It also frees the entrepreneur from the hassle of raising funds on his or her own, and leaves time for concentration on building the business.

A crowdfunding campaign begins when a fundraiser presents a fundraising proposal to a target group on an online platform. In return, members of the group who accept the offer make and deposit a financial pledge which is kept in escrow with the managers of the platform, for a fee. A Small Business Owner wishing to crowdfund a start-up or going concern would consider various options, depending on the nature of the project or business.

In peer to peer lending, the crowd will put money in a project or business as a loan to be re-paid with interest. In such a case, instead of getting a loan from one source, like a bank, the credit is advanced by a by a group of lenders.

There is also the option of equity crowdfunding whereby the business owner gets money from a large pool of people in exchange for interests in the business; like it happens on a stock exchange transaction, albeit on a small scale.

Under a reward-based crowdfunding, groups of individuals make contributions to a project or business and, in compensation, they receive non-financial rewards like goods or services, in proportion to the contribution that each one makes.

Crowdfunding can also be based on profit or revenue sharing. In such cases, businesses can get funding from crowds with the promise of sharing revenues or profits that accrue from the business.

What are the key benefits of crowdfunding Small and Medium Enterprises? The usual sources of patient capital include dipping into personal saving, borrowing from family and friends, securing bank loans, applying for government grants, and pitching to angel investors and venture capitalists. Crowdfunding has the advantage of achieving a quicker launch of the business idea, by bypassing those sources, many of which are time-consuming and expensive, difficult to close, and may only be obtained with stringent conditions or high price tags.

The crowdfunding process can also produce insight for the promoters of the business or project, which can help to refine the idea and improve its market entry strategies. This could happen through feedback in the course of interaction with prospective investors during the crowdfunding exercise, which could help to validate the proposal on offer and facilitate buy-in for the vision of the business.

Furthermore, crowdfunding as an alternative source of equity and debt finance is much cheaper than traditional sources. The business owner does not need to make an upfront payment or pay a set-up fee. The crowdfunding platform charges a small percentage of the fund raised; on the basis of no success, no fee.

Another advantage of crowdfunding is that the entrepreneur is able to structure the ownership of the business in a way that helps him or her to retain a majority control of the business. This is possible because of the large number of contributors involved, with each holding a small stake in the business; unlike when the funding is raised from a few people who, individually, make significant contributions to the funding of the business.

Crowdfunding clearly offers a business or project a way to market itself through a digital campaign to potential investors with a view to getting them to become investors. It is a viable option for the Small Business Owner seeking funds to start or grow a business or embark on a project. For an investor, crowdfunding provides an opportunity to have a stake, at minimal risk, in a diverse portfolio of multiple businesses. However, despite its growing popularity as a new source of investable funds, there is still an absence of enabling policies to guide the practice.

8 Questions Investors Ask Before Funding Start-Ups

Many founders, after preparing their business plans and making several pitches, don’t seem able to move their prospects into pulling out their cheque books to fund their projects. This happens even when the project promoters believe they are ready to take their start-up to the market. They believe they have a scalable way to sell their product or service and create sustainable streams of revenue. They think they have a credible plan to achieve competitive advantage in the market and make a return for investors. If this sounds like you, and you are still wondering why investors turn you down after pitching your business plan, you may need to return to the drawing board. Here are eight questions you should answer if you want an investor to seriously consider investing in your start-up:

1. What Is The Purpose Of The Business? A business exists to offer value, through a product and/or a service, which it provides to customers who, in return, pay for the value with cash or its equivalents. The money thus received finances the costs of running the business and leaves a profit to meet the needs of the proprietor(s) of the business.

This process requires the creation of products or services, marketing needs for acquisition, retention and expansion of customers, and financing to cash flow to build streams of revenue. In essence, value is that which is perceived by the customer, as represented by a benefit. The product or service to be introduced by the business must therefore solve a problem for the customer. Therein lies the purpose of the business.

For a start-up to excite the interest of an investor, it must answer these questions in the affirmative: What’s the purpose of the business, that is, what value will it create? Will the value satisfy a strong market demand? Can the business attract and retain the right talent, maintain customers and drive profits?

2. What Problem Is The Business Trying To Solve? There is a place for marketing and sales efforts that pitch the features and benefits of a product or service. But that cannot take the place of connecting with the challenge being faced by the customer. The business must ask: What problem will our product or service solve for the customer?

In seeking answers to this question, the business must remember the questions in the mind of the customer: What’s in it for me? Why do I need it? Why do I want it? What problem does this solve for me? What does the product or service do better or different than its competitors to solve the problem? The business must offer satisfactory answers to these questions before it can make a sale to the customer. The business must find a pain point and un-cover a market before it can make money.

3. What Is The Solution To The Problem? The business must demonstrate that it has gone through the problem solving process, having identified the problem, decided on an ideal solution and chosen a plan of action. This exercise will help the investor in evaluating the effectiveness of the proposed solution to the identified problem. It will also indicate whether the business is on track to transform the current situation into one that addresses the need of the customer and meets the objective of the business.

The basic idea is to establish the preferred reality. One way to do this is to determine a minimum viable product or service that will be needed for a launch. This must be something that customers can use, which will give the business the opportunity to test it and determine its fitness for the market. This provides a practical way of testing the waters before investing time and resources in moving forward.

4. Who Are The Competitors? A new entrant into the market must define its competitors, which means going beyond the big names in the sector and looking at every business that can potentially impact its success. The direct competitors will be those already marketing and selling products and services, similar to the one(s) being planned, to the same audience that the business is targeting. Indirect competitors will be those who address the same customer needs as the business plans to do, but do so in ways that don’t exactly match but overlap with that of the business.

Knowing and keeping direct and indirect competitors within radar, and tracking them across the variables helps the business to continually innovate and iterating towards finding a better fit with its customers’ needs for solutions to their pain points. This invariably widens the net as the business seeks the maximum possible scope for competitive advantage.

For the investor, the questions are: Can the business do as well or better than its competitors? If it can’t, why continue? If it can, and the market can welcome another player, then the business is onto something.

5. How Will The Product Or Service Be Different? Standing out from the crowd gives a business an edge, and makes it different from its competitors. A differentiator helps a business to distinguish itself from other businesses in its market. A business can differentiate itself by focusing on a feature or benefit which solves a problem, satisfies a need, or cures customers’ pain.

There are a variety of ways a business can position itself in the marketplace. Examples include but are not limited to Convenience (ease in buying a product or using a service); Reliability (product or service that hardly fails); Quality (luxury item) and Superior Customer Service (always there for customers).

Does the business have a secret weapon? Does it have something exclusive to it, like technology, data, intellectual property, relationships, etc. to distinguish it from competitors? If it doesn’t have any of these, it must assure the investor it is prepared and able to compete as just another runner.

6. What Is The Size Of The Market? Knowing the size of the market is a foundational part of launching a start-up venture. The aspiring Small Business Owner must know to determine it, and how it will impact potential revenue in the addressable market. Investors like to see big numbers, but don’t want a business that inflates them. The business must back its claims with data and research, how they are derived and the assumptions behind them.

Does the business know the true and realistic size of the market? Who has the need for the product or service, and has the means to buy it? How many of them currently exist? Who would the business share the market with, and what piece of the pie can the business take? Is the market big enough for the investor to care? The investor wants to know that the addressable market is large enough to matter.

7. How Will The Business Make Money? In simple terms, a business makes money by finding answers to four key questions: 1.What will it sell or offer to its customers? 2. Who are the customers that constitute its primary target market? 3. Why will these customers want to buy what the business is offering? 4. How does the business make money while producing the product or providing the service, and selling them to its customers?

The answers to these questions will define the strategy of the business, which will unveil its business model. Bottom line: How will the business make money? Will it make enough money to grow to the point of turning a profit? The investor wants to know.

8. Who Are The Managers And Key Personnel Of The Business? An essential requirement for a successful start-up is its ability to pull together a management team. There must be serious thought on critical positions to be filled and who should fill them. In a small business, some staff will wear several hats, but the duties and responsibilities of each hat must be clearly identified and spelt out. 

Talent is everything. The business will rise or fall with the quality of its people. The founding team must have the correct balance of personnel and skills. Potential investors want to see a team that holds the promise of taking a start-up to lofty heights.

* Do you need help in preparing a business plan for your start-up or new project? Fill out the questionnaire at https://smefinance.org/thesmelab.

** If you like to link up with aspiring and practising Small Business Owners on how to plan your business, join our official SME Finance Facebook Group at https://www.facebook.com/groups/smefinance/

5 Keys To Unlock An Investable Business Plan

The business plan presents your business to a potential investor or financier. It also represents your best effort as the promoter of the business to clarify your plan for the business. The plan must therefore follow a format that will assist its readers to quickly scan and understand the vital data about your business. For these reasons, five elements are critical to the preparation of an investable business plan for starting or growing your business. Here is a guide to help you produce a business plan that will be investment-ready:

1. A Basic Structure: Your business plan must be easy to read. There are certain things that your reader, a financier or investor, is looking for. The basic format of your plan must include the Cover Letter, Title Page, Table of Contents and Executive Summary.

While the cover page explains why you have produced the plan and why the reader should be interested in it, the title page should disclose the name of the business, identify its promoters and brand/product images. The table of contents will help the reader move around the document to find what is where. This should be followed by its contents, which focus on such items like the target audience, products or services and current and projected financials.

2. Executive Summary As Investors’ Pitch:The primary objective of the plan is to attract investors’ interest or secure financing. And, because you, the promoter, is not likely to be present when the plan is being reviewed, its summary has to convey the essence of the document in very few words. It must be short, sharp and, more importantly, it must clearly pitch your proposal. By so doing, a busy investor or financier can get the gist of your story at a glance, with minimum effort.

Your reader will almost always start reading your plan from the executive summary and will only go beyond it when it engages attention and holds promise. It must have the glue that holds the reader, hence it must be presented as a pitch that lures the reader to want to learn more about the business. Because of its importance, it is advisable to leave the writing of the executive summary to the last, even though it comes early in arranging the content of the plan,

3. The Marketing Plan: This is a comprehensive outline of the overall marketing effort of the business. It is the marketing strategy of the business, the blueprint of how it will acquire customers and meet its sales targets. The marketing plan provides information on the product or service, pricing, promotion and estimated sales and revenues. It also includes branding and positioning of the business, target markets, segmentation of its customers, competition analysis, critical success factors and key performance indicators.

4. The Assumptions:These are the things that you consider true for the purpose of developing a strategy and making decisions about the business. These are informed disclosures of the uncertainties and risks that are associated with the enterprise.

Examples of the assumptions of your plan may include, but not limited to, the likely behaviour of your customers, regulations that could impact operations, changes in employee remuneration, number of days in your financial year and interest rates on borrowed capital.

Some assumptions might not be obvious in the plan. However, the ones stated in it must be based on well-researched findings, not the result of guesswork. Nevertheless, the value of your plan, relative to your assumptions, is to serve as a yardstick for determining their correctness or otherwise, by helping to understand and explain variances where they occur.

5. The Financials: The financial information in the plan foretell the trading activities of the business over a number of years. They begin with how the business will source the money it needs to start or continue to run, dovetail into how much it will spend on its various activities, and how much it will generate as income for the business and profits for its owners.

Without delving too deeply into financial analysis, the plan must aim to present figures that indicate a balance between being unduly pessimistic and overly optimistic. It must, however, layout the best case and worst case scenarios, including the framework that will manage the cash flow of the business.

These proven and tested recommendations will fine-tune the working draft of your business plan. As a final step, to get the finishing touch, get your associates or partners to review your final draft prior to submitting it to an investor or a lender.

* Do you need help in preparing a business plan for your start-up or new project? Fill out the questionnaire at https://smefinance.org/thesmelab.

** If you like to link up with aspiring and practising Small Business Owners on how to plan your business, join our official SME Finance Facebook Group at https://www.facebook.com/groups/smefinance/

How To Budget For Your Project Or Start-Up

A budget is a statement that estimates the income and expenses expected from the future plans and objectives of a business or project. It documents, in financial form, what the owners or managers expect in an upcoming period, in line with the goals for the business or project. A budget is an essential part of your business plan.

If you’re starting your entrepreneurial journey or your going concern is embarking on a new project, an understanding of the building blocks of starting and growing a business will help you on your way. Basically, you need a budget to help you have a firm grip on your finances. What should you focus on when planning the budget that will help you to kick start and maintain control of your business?

The issues that a Small Business Owner needs to address in preparing a budget for a business or project include but are not limited to the following: How much money will be needed? What things will be needed to run the business or execute the project? What will be the expense and sales forecast? How do these stack and add up?

1. Amount Needed, Where It Will Come From: A key question in launching a new business or project is the amount of money to be spent. While each business may be different, businesses have a common denominator to the extent that you have to spend money on them before you can make money from them. You have to speculate before you can accumulate!

To begin with, you have to decide how much you are able and willing to invest in the new enterprise, and the time line of your expenditure. This will enable you to stay on course and know when and if you will need to correct your course. Deciding on the amount needed also helps you to determine where the money will come from. This could be personal savings, equity from other investors, loans that will be repaid with interest, etc.

2. Essential Items: You have to think about the things that you need to run the business or deliver the project. These will vary, depending on the nature of the business or project. They could range from equipment and machinery, through raw material and consumables, to licences and permits. These should also include the human resources that you need to engage. The bottom line is that the items are essential for the business or project to survive and thrive. More important, the items have cost implications and a complete budget must include the cost of acquiring and using them.

3. Expense And Sales Forecast: This must be informed by results from your market research, knowledge of the competition and market trends. What are the planned expenses and projected income? How much loss is the business or project likely to carry and for how long? When will the business or project start making money or profits? What is the best (or worst) case scenario for the enterprise being embarked on? Answers to these questions provide pointers to the road ahead.

4. Professional Assistance: On completion of the rough draft of the budget, it helps to seek a second opinion, especially from a professional. Get someone who should know to verify it. Ask a mentor or qualified accountant to look over what has been done. The idea is to double-check the work to ensure that everything adds up.

* Do you need help in preparing the budget for your start-up or new project? Contact us at https://smefinance.org/thesmelab.

** If you will like to compare notes with aspiring and practising Small Business Owners on this subject, you can do so by joining our official SME Finance Facebook Group at https://www.facebook.com/groups/smefinance/

9 Ways Businesses Make Money

A business is an organisation or entity engaged in commercial, industrial, or professional activities. Regardless of the products being offered or service delivered, continuous cash-flow is needed to sustain a business. For this reason, the Small Business Owner must understand that the primary business of a business is business. That is, making money. The Small Business Owner must therefore answer the Big Question: How will the business make money? In other words, what is the business model?

A business model is the underlying principle of how a business is run. It is the design to generate revenue for the business. The business model explains how the business works. It describes who the business sells to, and how it makes a profit. Every business relies on a specific business model for taking its product or service to the market. The model answers two basic questions: Who is the customer, the person who needs the product or service produced or provided by the business?  It also answers the question: How do the business generate revenue? Here are nine tried and tested models for generating income that are available to anyone starting a business:


1. Bricks and Clicks: A business has two basic choices. It can adopt the brick or click model, or a combination. The brick model is where the business operates offline, and does business in person, face to face, from a physical location in a building. The click model is where it conducts business through online purchases and transactions, usually though computing devices. This is the model for businesses that operate in the e-commerce space. The trend is for businesses to combine the brick and click model as brick business now strive to establish digital shops, which enable them to trade online and offline.


2. Bait and Hook: The bait and hook model is where a product or service is offered for free or sold to a customer at a low price, which serves as a bait for hooking the customer to buy the same or similar product or service at a higher price. The model creates an impression that the customer is getting a bargain, while making money for the business. A popular example is the replaceable razor which sells cheaply with few blades that become dull after a few shaves. Thereafter, the customer continues to buy blades as refills for the razor head. This model is also common in the book trade where authors give readers one or two chapters of a book in soft copy or e-book format for free, as a bait to hook the customer into buying the complete book.


3. Subscription: This is a model where the customer pays a recurring fee at regular intervals, typically monthly or yearly, for continued use of a product or service. This model strengthens the relationship of the business with its customers while it continues to deliver value. It also aligns customers’ cash flow with access to the product or service, as they can decide to pay as they go or pay up front. This model, originally common with newspaper and book publishing businesses, is now standard fare for such businesses like software, television, telecommunications and electricity services.

4. Premium: A premium model offers a high end product or service to discriminating customers who value quality and brand image. The goal of this model is to achieve a high profit margin on a low sales volume. A business can use this model to enhance the value of its product or service against those of its competitors, by charging prices that are higher than what the market is offering. This creates a perception that the product or service has a higher value. The business also enjoys the advantage of generating higher profit margins from its sales. Whereas premium pricing is usually associated with big brand names, like a Mercedes car and Rolex watch, a small business with a unique and proprietary product or service, can differentiate them with a quality image and a higher price


5. Freemium: This is a hybrid of the words, free and premium. It is the pricing strategy where a basic version of a product or service is offered for free but money is charged for its upgrades that promise additional features. This is a popular model for businesses seeking to enter new markets and need to entice users to their products or services. The offer of a free trial, as distinct from a paid-only model, lowers the entry barrier for the new player, and helps to grow recurring revenue. Publishing and software companies that offer free trials prior to paid services are good examples of the fermium model.

6. Advertising: Making money from advertising deceptively appears to be one of the simplest and easiest ways models, which is why many business seek to use it as a source of revenue. An advertising-supported revenue model is based on the business attracting an audience by creating content or engagement, and then selling access to advertisers. It focuses on the sale of advertising as a major source of revenue. This approach drives the traditional broadcast and print media, and online media, which generally generate revenue from advertising, customer subscriptions or combine both.

Television, radio, newspapers and magazines provide information and entertainment for their viewers, listeners and readers. While they make money from subscribers to their services, they earn most of their income from advertisers seeking the attention and patronage of their audiences. These advertisers pay to place advertising messages within their non-commercial content.



The attraction of the advertising-supported revenue model is that your medium will almost always find companies that want to pay to reach your audience if you are able to provide specific details about their character and size. This explains why newspapers and magazines give away thousands of copies to businesses and institutions in their communities as they drive their circulation, readership and, by extension, advertising revenue.

The downside, however, is that an advertisement-dependent model may be hard to implement because building an audience that is attractive to advertisers is neither easy nor cheap. Furthermore, it hardly lends itself to multiple revenue sources and is among the first to be negatively impacted in a down economy. It can also be severely challenged by the availability of alternative sources for similar or related information or content being provided by the medium. This explains the disruptive effect of the internet where online sources have eliminated the exclusivity once enjoyed by the traditional media, not to mention digital platforms like websites, blogs, etc. that has turned this model on its head.


7. Aggregator: The aggregator business model has entered and disrupted almost every industry. Travel. Taxis. Hotels. Food. Groceries. Name it. The model runs on organising previously unorganised activities, and providing a service under a brand to an identified population. Airbnb for hotels and Uber for taxis are ready examples.

The aggregator assembles information about the providers of goods and services in particular industries, partners with the providers and markets their services under their own brand name, doing so with a uniform quality and prices. The providers of goods or services are not employees of the aggregator, and simply work with the aggregator under contract to continue to own the goods or services that they provide. Under agreement, the aggregator focuses on marketing and creating leads for the providers who, on their part, focus on providing quality products or services to the customers.

This win-win relationship provides a platform where the customer and the goods or services providers are both customers of the aggregator, albeit in differing ways. Meanwhile, the goods or services providers remain members of their original industries, and continue to compete among themselves as before.

The key challenge for the aggregator is finding the money to build the brand and ensuring delivery of a standardised quality for every user by different providers. The aggregator provides the goods or services provider with customers and, in return, charges a commission. Alternatively, the goods or services provider quotes a minimum price at which to operate, leaving room for the aggregator to add a take-up rate before quoting the final price to the consumer.

8. Buy Low, Sell High: If you plan to start a business based on buying products cheaply and reselling them for a profit, you can bet on the buy low, sell high model. Basically, your buying-and-selling business will run on purchasing items cheaply and re-selling them for more than their cost. Your profit will be the difference between what you paid for the product and what you sold it for.

Your mantra will be: Buy low, sell high. No more, no less!

This is about the easiest business an aspiring Small Business Owner can start. It is a low-budget enterprise and requires a minimal investment. There is limited financial risk as the money you spend to get started will go into buying inventory, which you can dispose if you decide to wind up. The profit potential is good as you can mark up your product for a reasonable margin. You can start and operate a buying and selling business without specialised skills. And, in the internet makes it easy to buy and sell as you can easily open an online store.

9. Value-Added Reseller: This is a model where a business produces a product or provides a service, for re-sale by other businesses. The difference is that the re-seller adds value by modifying the original product or service. Such industry-specific additions help the reseller to develop a distribution network for the product or service, and fast-tracts the generation of revenue. Value-added resale programmes are common in technology industries, particularly those in the software business.

While the foregoing does not exhaust the possible models available to a start-up, it provides a range of options, depending on the nature of the business. An aspiring or practising Small Business Owner would benefit from considering each model and deciding if one or more of them can birth their business. The bottom line is to pick a model that delivers the best value and highest revenue for the business.

Do you need help in finding the most viable revenue model for your small business? Contact us at https://smefinance.org/thesmelab.

When To Use A Loan To Grow Your Business

Small Business Owners, in the face of the Covid-19 pandemic, continue to grapple with the double challenge of how to survive the lockdown and thrive thereafter. There are also worries that some Small Business Owners may go out of business if they do not get help. Fortunately, there is a growing range of support for them, like the single-digit loans on offer by the Central Bank of Nigeria under its N50 billion stimulus package for Micro, Small and Medium Enterprises (MSME).

While Small Business Owners scramble for this loan and similar credit facilities, they should stop and think. They should answer the question: Why should they use a loan to grow their business? Every business seeks to grow and rank above its competitors. Similarly, every business needs cash to grow. It takes money to make money.

Simply defined, a loan is money that is borrowed, to be repaid with interest. For a Small Business Owner, a loan is usually the last resort, after exhausting other options. Thus, before settling for a loan, the Small Business Owner must know the type of loan the business needs, as determined by the purpose of the loan. He or she must also have a deliberate plan of how to utilise the funds. And, most important, after considering the amount, duration, interest rate and repayment terms, he or she must have a clear and viable plan of how to repay the loan. With these in mind, here are some ways a Small Business Owner can put a loan to good use:

1. Purchase Of Equipment: When a business needs a machine or tool to work or the one in use is outdated or has exhausted its lifespan, the options are severely limited. It must be replaced since the business needs it to work. If the item is costly and cannot be replaced from the daily cash flow of the business, financing its purchase with an affordable loan becomes a ready recourse. Such a purchase repays itself by delivering a better product or service for its customers, and helping the business turn a profit.

2. Purchase Of Inventory: Inventory can be a major expense item for a small business. Ensuring adequate inventory at all times can be a stretch on cash flow. It is a constant struggle for a small business to maintain a balance between its cash flow and the need to keep relevant stock, which sometimes requires large purchases. In the end, it makes business sense to take a loan to purchase inventory, make profit and get a return on investment.

Before getting a loan for the purchase of inventory, the Small Business Owner must be guided by the sales history and sales projections of the business, and the cost of the loan against the total projected sales of the business. This analysis must show that the projected return will be cover the total cost of the loan and leave a surplus; meaning that the loan can be turned into profit.

3. Marketing: Not much happens in a business until it sells its product or service. One sure-fire way of growing a business is by running marketing campaigns, with a view to acquiring new customers while retaining old ones. However, customer acquisition is an expensive enterprise. A marketing campaign, traditional or digital, requires funding. Where the business cannot finance its marketing plan from its regular trading activities, a loan for this purpose is a wise decision if it will increase sales volumes and revenues that can be re-invested in the business.

4. Capacity-Building: A business is as good as the people who run it. As often happens in a start-up, the entire business might not be more than the owner, a one-man band working in multiple capacities. As the business grows, the business will need to acquire new hands with differing and complementing competencies. This is the time to boost the capacity of the business, by investing in the human capital that will keep the business innovative and competitive. This can also apply to an old business seeking to expand its trading activity. Using a loan to hire fresh talent, which translates to additional executive capacity, is a worthy step towards enhancing productivity and increasing the revenue base of the business.

5. Building A Credit Profile: The average small business does not have a credit history, simply because it does not have a record of past borrowings. Reason is that the big lenders don’t consider small businesses as credit-worthy. How does a Small Business Owner get out of the chicken and egg quagmire? To break this jinx, a small business with its eyes on big loans in the near future must start preparing now. It must begin to build its creditworthiness by procuring small, short-term business loans and making regular and timely payments on them. This way, the small business will build a track record, have cordial relationship with lenders and ready itself for a big loan when it needs it.

All said, contracting a small business loan is not a casual affair. A Small Business Owner must contract a loan only when it is the right thing to do. A properly utilised loan can energise a business for long-term growth.

Do you need help in getting a loan your small business? Contact us at https://smefinance.org/thesmelab

Covid-19 Crisis: What’s Your Business Continuity Plan?

How does a Small Business Owner keep the business running in the face of the on-going ravage of the Covid-19 pandemic? Our Guest Writer, Segun McMedal, outlines a business continuity plan for your consideration and action. Read on:

The first quarter of the year 2020 was very unusual – it was the period the world stood still; one, we can never forget, no thanks to Covid-19. The impact of the virus is unprecedented in world history. To ensure containment, development partners and governments directed that all social and economic activities should be locked down in all the affected nation-states including Nigeria. The current restrictions mean that the business environment is very tough, altering business models for almost all the industry and professions. While some industries (tourism, aviation, and financial services) are already on a life support, it is a boom period for others (telecoms, healthcare and medical supply, retail and food processing). So, how best should businesses respond to survive the onslaught?

There are three kinds of people as are companies: Those who make things happen; those who watch things happen; and those who wonder what happened. This challenging time opens a window of opportunity for people who are ready to make things happen to remain in business. This is one of the best times for businesses to step up to the plate and help their customers in navigating this crisis. This is the time to deepen your business’ positioning in the minds of stakeholders to be relevant during and after the Covid-19 crisis. Below are simple ways of ensuring business continuity in this period:

1. Work Remotely:  This is part of putting peoples’ safety first. This style allows workers to execute their duties outside of the traditional office environment. Instead of commuting to the office each morning of weekdays to work from a designated desk, remote employees can perform their assignments wherever they please. All you need is a computer or smartphone plus access to the internet to become a remote worker. The internet gives you access to cloud-based applications which allows you to do everything in or outside the office. Virtual employees can work anytime of the day as they wish to stay in touch with their stakeholders all over the world thanks to the internet. Working remotely help you to complete your duties on your own schedules which can result in higher engagement rates and increased productivity levels as well, if well managed, according to Harvard Business Review. But you must learn a new approach to adapt to working remotely. Here’s how, courtesy of CMC Connect Limited:

a. Create a dedicated workspace, away from distractions.
b. Start your day early. Waking up late will disorganise your day.
c. Prepare for work. Take a shower, change your clothes.
d. Create a to-do-list. Write down the task to be achieved for the day.
e. Stay Focused. Avoid distractions by setting boundaries, help your loved ones understand that you’re not on holidays.
f. Take breaks. Stretch your legs.
g. Communicate. Respond to calls, emails, messaging apps, video calls, etc.
h. Celebrate your wins. Go over the day’s tasks and tick off those you were able to deliver.
i. Review the day’s achievements with your line manager and teammates.
j. Working from home (WFH) is only effective when you are in constant communication with line managers and teammates.

2. Embrace Collaborative Business. In collaborative business, companies co-ordinate with other companies to maximise their efficiency and profitability. Collaborative business is used by companies to team up with competitors and suppliers for efficiency. It can also be used as a sales strategy to capture more market share. A food vendor and transporter can partner to deliver provisions to homes. Technology consulting firms can partner with professional bodies to deliver webinars to their members.

3. Maintain/Increase Your Marketing Budget. In challenging times, many businesses cut down their marketing budget, to the detriment of the business. Lean periods are the times businesses need to market more because consumers are restless and looking to make changes in their buying decisions. You need to help them find your products and services easily. This is also the best time to increase your investment in public relations. Almost all industries and professions have something to say about navigating the Covid-19 era. According to Nielsen, credential experts in medicine, law, finance, human resources, technology, media, supply chain management etc. can leverage radio and television news talk programmes to position their brands, and reach more people than they have in years. This is a time when knowledge or professionalism counts to provide relevant information to customers to manage the crisis. Furthermore, brands should constantly update their online profiles — websites and social media handles — as authentic sources of information. Hotlines should be activated as well. Efforts in social listening, media scanning and keyword monitoring should be doubled to quickly respond to untoward rumours.

4. Protect Business Cash Flow. Cash is the lifeblood that every business needs to take care of overheads and keep business healthy. But the harder times get, the harder it can be to keep the cash flowing in. Free cash flow, equity and debt financing are the best sources of working capital. These options may not be available for all businesses in challenging times. In such cases, there are alternative cash flow management strategies that businesses can use to ease the strain on their working capital, such as requesting for a deposit, cutting or delaying expenses, financing purchase orders and discounting invoices.

5. Communication. Maintain on-going engagement and support, by creating and sustaining an open line of communication relevant to your employees, customers, suppliers, creditors, regulators and other stakeholders. These stakeholders require different messaging and media that are essential to keep them informed.

6. Maximise Government Financial Support Policies.  The Central Bank of Nigeria announced several financial intervention policies to support households and companies in mitigating the negative impact of the Covid-19 pandemic on families and enterprises nationwide. These include:

a. Credit relief of $136.6 million and additional N50 billion facility through the NIRSAL Microfinance Bank for households, small and medium-sized enterprises, airline service providers, hotels, and health care merchants affected by the Covid-19 pandemic.
b. Reduction of interest rates on its intervention funds from nine percent to five percent per annum for one year, effective March 1, 2020.
c. Unspecified credit support for pharmaceutical companies intending to expand or establish their own drug manufacturing plants in Nigeria as well as to hospital and health care practitioners who intend to build or expand to world class standards.
d. Forbearance to big businesses by granting banks leave to consider the temporary restructuring of the tenure and loan terms for businesses and households most affected by the outbreak, particularly the oil and gas, agriculture and manufacturing.

Your organisation must step up to the plate and adapt to the current realities. This is the time for businesses to demonstrate their nimbleness by quickly and effectively responding to the demands of change while continually delivering high performance.

* Segun Mcmedal, a business communications and public affairs expert, is Chairman of Nigerian Institute of Public Relations, Lagos Chapter.

CBN, NIRSAL And Covid-19 Loans: Keep It Simple, Stupid!

The phrase, Keep It Simple, Stupid (KISS), comes from the world of design. Its underlying principle recommends that designs and/or systems should be kept simple. This requires that as far as practical, a design or system should be made simple rather than complex because simplicity remains the fast lane to securing the acceptance of its users.

The KISS principle readily comes to mind in the face of frustrations being experienced by potential beneficiaries trying to access the stimulus package introduced by the Central Bank of Nigeria (CBN) amid the Covid-19 pandemic, and being midwifed by NIRSAL Microfinance Bank (NMFB).

First, a brief recap of the scheme.

Small Business Owners, with going concerns interested in accessing the N50 billion CBN loans for Micro, Small and Medium Enterprises (MSMEs) affected by the Covid-19 pandemic, must do so with bankable plans that outline their capacity to utilise the fund profitably and repay the loans according to terms. The businesses must be active in agriculture, hospitality, health, airline service, manufacturing, trading or any other income generating activity as may be prescribed by the CBN. The facility extends a loan amount up to N25 million at an interest rate of Five percent per annum, all inclusive, up to February 28, 2021.

The collateral shall be as may be acceptable by NIRSAL MFB, and may include any one or more of the following: Moveable asset(s) duly registered on the National Collateral Registry (NCR); Simple deposit of title documents, in perfectible state; Deed of Debenture (for stocks), in perfectible state; Irrevocable domiciliation of proceeds; Two acceptable Guarantors; Personal Guarantee of the promoter of the business; Life Insurance of the Key-Man, with NMFB noted as the First Loss Payee; and Comprehensive Insurance over the asset.

The loan requests are submitted to NIRSAL Microfinance Bank with Bank Verification Number (BVN), business registration (where applicable) and business plan that includes evidence of the opportunity or adverse impact as a result of Covid-19 pandemic. NIRSAL Microfinance Bank appraises and conducts due diligence on the application and, upon satisfaction, forward it to the CBN which reviews and gives final approval for disbursement from the CBN’s Micro, Small and Medium Enterprises Development Fund (MSMEDF), to NMFB for on-lending to the end user.

The foregoing requirements are tough at the best of times. For a Small Business Owner whose business is eligible for the stimulus package, and can meet the terms and conditions of the loan, and proves that the business has been adversely affected by the Covid-19 pandemic, the application process can become complex at the point of interaction with NIRSAL Microfinance Bank.

The loan application process begins online. More than a few applicants desiring to sign up were unable to do so for long periods, a fact acknowledged in NIRSAL’s apology on its website, saying: ‘‘We are experiencing a downtime due to traffic on the nmfb.com.ng. Kindly use these links as alternative to accessing your application forms; tinyurl.com/r6yefgf (SME), tinyurl.com/sobmj7f (HOUSEHOLD).’’

While this alternative may have brought some relief, the real complexity (and frustration) in the loan application process comes with the opening of the NIRSAL website. It opens with the following sign-up options:

Click here for Mini SME Category

Click here for SME and SME Plus Category

For non-automated users, send Business Plan to TCF-busplan@nmfb.com.ng

In welcoming applicants to the optional Mini Business Plan development portal for access to the Covid-19 Relief Fund, it notes that the link should only be used by SMEs seeking funding of between N3 million and N10 million. It advises SMEs seeking funding between N10.1 million and N25 million to access Covid-19-Plus.

The Mini Business Plan offers the following support:

  • Evaluating the feasibility and sustainability of your business.
  • Access of micro and small enterprises to professional business development services at low costs.
  • Structure your operations, marketing and pricing appropriately towards sustainability and growth.

This basic plan, which is said to be a free option, is offered for ₦5,000!

The other plans add post-credit monitoring, management finance, etc. to the basic plan, with price ranges of N25,000 for a start-up and N45,000 for up to five businesses. Seamlessly, the sign-up moves from the NIRSAL website to www.simplifiedcredit.net. It is not clear if Simplified Credit is a subsidiary of NIRSAL or an independent service provider. This is confusing to a visitor.

More important, the website appears incomplete and dotted with missing links. Some of its cells are blank, without content, suggesting that the website is still under construction. The designer, seemingly aware of this, asks and answers the question: ‘‘Not sure which plan is right for you? Just pick up the phone and give us a call (+234 706 5000 835). We’ll help you choose the perfect plan to suit your needs.’’

It is worrying that small businesses are looking to get the help they sorely need from a set up that doesn’t seem to be executing a clearly-thought plan. Small businesses are most vulnerable to the Covid-19 stay-at-home order. They are struggling to keep staff and stay afloat at a time they don’t have customers that bring income. The CBN has done well to initiate the stimulus package of loans at below-market rates. Businesses applying for the loans should not be getting a hard time in accessing the funds. NIRSAL Microfinance Bank, charged with processing applications, deciding who meets the requirements and handing out the loans, must up its game and deliver on its assignment.

As it now stands, the chance of a Small Business Owner passing through the eye of a needle is about the same as that of signing up for the Covid-19 loan on the NIRSAL portal, which is the first step for accessing it. This should not be so. The CBN and NIRSAL must simplify the loan application process, to enable the stimulus package reach Small Business Owners in good time. Keep It Simple, Stupid!

If you are a Small Business Owner experiencing a challenge in accessing the Central Bank of Nigeria-funded and NIRSAL Microfinance Bank-managed Covid-19 loans, contact us at https://smefinance.org/thesmelab