We published our chat with Kehinde Oyeleke of Seedvest a while ago, where he talked about Nigeria’s recession and how it’s affecting small Nigerian businesses.
We also talked about how Nigerian small businesses can get funding, especially with the country’s recession. Investors confidence is expected to be dwindling. Add that to the fact that SMEs are naturally hard to fund.
Here, Kehinde reveals how small Nigerian businesses can best organize their processes so they can get funding. If you are doing any of the following, getting capital for your business might be more difficult than usual:
1. You don’t have a business plan
Oyeleke reckons that a business plan is an opportunity to answer core questions about the business. “You need to know what you are selling, who you are selling to. Does this thing even work? If you want to import a ton of umbrellas to sell during the dry season, and you want to sell within the month, how receptive will people be to that. You need to understand what you are selling, who you are selling to. why people will buy from you and how much will people pay you.”
2. You don’t have a team
“The next thing you need to look at is, who is managing the business with you?” he says. Small business owners have been known to run their business with themselves at the center.
“They don’t have a good structure around them, it’s just them. Sometimes a man and his wife, which is worse because domestic misunderstanding can flow over into the business. So you need to ask yourself, “where is my team?” Ensure that if are indisposed for a week or so, the business doesn’t crumble around you.”
3. You don’t know the laws of the work
Expertise is not enough. Understanding regulations is important for the small business owner. “You need to do is know if your business is under regulation. Basically, I can’t just go out there and start an insurance company, there are regulations. There is a minimum capital you need to have. There are also safety issues to be considered.”
4. You don’t know your competition and how to beat them
“Figure out who you are competing with in this business. Do you have the wherewithal to compete with them? Business is more than just the addressable market, you need to know what will make them vacate the person they are using now and come to you.”
5. You don’t know if yours is a profitable idea or not
That a business would solve real problems doesn’t mean it can make money. “At the end of the day, you need money to fund your idea and your processes. And you need to ask yourself, “does this idea even make money?”
“There are so many great ideas that can’t be operated profitably” he says.
Kehinde Oyeleke is the founder and group Managing Director at Seedvest, an SME investment and advisory company with operations in Lagos and Oyo state, Nigeria.
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