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Wednesday, October 28, 2009

How to make money as a Student in Nigeria

Ajele is (as at the time of writing this post) a chess instructor with Green springs Montessori school in Ajah were he teaches chess and gets paid at the end of every term. The parents of his pupils pay =N=8,000 per term for his services and 32 pupils were registered for chess which was given a club in order to make chess an extra curricular activity. He teaches chess only two hours a week on Thursdays. For 32 pupils his income was =N=256,000 per term or =N=85,000 per month. He is currently running his HND programme in Yabatech.

Kehinde, was a student of Estate management at Yabatech when he became an estate agent. He did not like the idea of people with no formal training as realtors dominating his field among the low income and middle income class home owners so he decided to also partake in the business. Using his uncle’s contacts and friends, he advertised his services using outdoor signs, word of mouth and classified Ads in local newspapers and on the internet. Weeks later his business became serious as he had people calling from Jos, Port Harcourt and Benin making enquiries about his services. His commission was 10% and some of his deals included helping his former Landlord sell his block of six flats at Ikeja for =N=36,000,000 and securing land deals at various other times.

Tunde Blogger (not real name), was introduced into blogging by his best friend who was into web development. He initially was into blogging for the fun of it writing articles on his favorite subjects which were football, religion and dating until he visited a weblog network at www.hubpages.com and discovered to his amazement that he could make cool money blogging and writing on these topics. It was at this point he learnt about the term writing for the web, which is a concept used by well established web based companies to enlighten internet users on different topics. He also signed up for google’s Adsense progamme and even though he wasn’t making much about $21 a month from this programme, he however made similar amounts for many weblog networks including his own free blog from blogger.com. His combined monthly income from these sources was averagely $219 per month not counting money he made from his freelance writing jobs he got from www.elance.com and www.helium.com and he achieved all this spending not more than four hours a week typing and writing on his favorite topics. He promised to set up a weblog network after his schooling as a way of fulfilling a yearning to be recognized on the internet.

Onwueme Paul (myself), I once ran a phone call centre during my Industrial Training (I.T) between 2005 and 2006. I started the business in April 2005 with my telephone and =N=17,000 which was my savings at the time. I employed a young girl to make phone calls and sell recharge cards while I was working. Her monthly salary at the time was =N= 4,000. My average monthly sales from this business from phone calls was =N= 70,000 per month with profit being =N= 13,000 and profit from selling cards being =N= 24,000 per month from sales of over =N= 200,000 per month. My average total profit per month was therefore =N= 37,000. But this was short lived as I later encountered stiff competition from many other people who saw how lucrative the business was. This made it difficult to run since I had to increase my worker’s salary, make do with declining sales, higher costs and cope with highly diminished profit margins. The cost of running the business was equal to or greater than income. But I had saved my profits from the good 8 months that my business boomed and that served as capital for further investments in stocks and Annuities.

Andy started his home tutoring business, specializing in teaching secondary school subjects to students preparing for GCE, NECO and WAEC in 2003 due to financial challenges. Initially his intention was just to make enough money to meet his basic needs and he went about it advertising his services using outdoor signs and word of mouth. He soon realized it was a lucrative business when he started receiving enquiries from many parents who had come to hear of him through word of mouth. His lessons were done four hours per day (after lectures at school) six days a week for all his clients at one hour per class per child so that he never taught more than 24 hours a week. His fee was =N= 3,000 per child per month on his trade and at one time had 28 people he was teaching.

Do you have a point you want to make? Say it here as a comment;

Friday, October 23, 2009

How to start reselling laptops in Lagos Nigeria

By Onwueme Paul

Laptop reseller ship is the buying and re-selling of laptops for profit or commission. A laptop reseller is one who typically buys laptops either in bulk or in units from wholesalers or major laptop dealers and resells in units to retailers or directly to users. The very nature of this business is such that prices are unstable thus making pricing of laptops especially in Ikeja computer village negotiable. The profit or loss margin depends largely on bargaining power and perceived value of the laptop in question.

Flexibility

The business of buying and selling laptops is both flexible and lucrative. One could add engineering services and digital download services with this business to maximize income or open up other avenues for making money.

Entry requirements

Without capital
Entry into the business starts with one being a middleman (marketer of some sort) trying to link prospective buyers with sellers. The middleman scouts for buyers by advertising his services using cardboard signs and other inscriptions or mouthing it to passersby in busy locations such as computer village. Such locations must be close by to the actual seller. Whenever a prospect signifies interest the middleman links the buyer with the seller and earns his commission in the process. Another option available is to become an agent of any laptop dealer. If you are trusted by them, you could enjoy the priviledge of taking some of their laptops about with you for marketing purposes. Of course this offers you the option of selling the laptop at a higher amount above the actual price if you have good bargaining power. The key thing about starting as a middleman is to be a good sales person.


With capital
With limited capital of say =N= 30,000 one could start the business by purchasing a refurbished laptop in good condition to resell for profit. The profit margin of each laptop could be as little as =N= 5,000 or as high as =N= 25,000 also depending on your bargaining power.

Major dealers of laptops are located in computer village in Ikeja and usually rent or own lock up shops or they could be scattered in different parts of the metropolis, whereas the smaller dealers are either roadside dealers or small retailers without shops of their own. Sometimes a laptop specialist providing repair services could also double as a reseller.

Advantages

• Easy to start
• Simple business with low overhead cost and high turnover thus making it lucrative.
• Fairly competitive

Disadvantages

• Low patronage is common with many dealers due to the wide gap between buyers and sellers
• High cost of advertising
• Many sub-quality laptops are in circulation making customer satisfaction and loyalty a difficult thing to achieve.

Recommendation and conclusion

If you venture into this business, make sure you familiarize yourself with the problems and challenges inherent in this business namely; exploitative tendencies of middlemen, unrealistic pricing of laptops by buyers and inadequate information of suppliers especially reliable suppliers. The business will work if you can safely buy from reputable suppliers or major dealers and locate willing buyers. The strategy you adopt will depend on you and your abilities. Also remember to only deal in fast moving product lines especially the major brands dell, Toshiba, hp and Acer which must be internet friendly as well.

Thursday, October 22, 2009

List of businesses one can start with N 50,000 or less

By Onwueme Paul

One of the questions I have noticed frequently asked is what kind of business can one start with N 50,000 or less. Some people especially young school leavers and students looking for a source of income ask questions like this in order to know what venture they can start with the little funds they have.

So I have decided to write this post as an answer to this question. I have taken time to select a list of businesses one can start with N 50,000 or less. Although this list is not exhaustive it still offers many options to would be entrepreneurs and self employment seekers.

List of businesses you can start in Lagos Nigeria for N 50,000 or less

1. Beads reseller ship
2. Ice block making
3. Recharge cards reseller ship
4. GSM products reseller ship
5. Block moulding
6. Call centre business
7. Cake baking
8. Outdoor catering
9. Fruit selling
10. Pure water reseller ship
11. Newspaper vending

Middleman businesses

12. Buyer/seller linking
13. Drop shipper

Agency services

14. Real Estate Agent
15. SME loan Consultant
16. Freelance marketing Executive
17. House keeping services

Skills/Talent based Businesses

18. Copy writer
19. Martial arts trainer
20. Ghost writer
21. Computer trainer
22. Talent hunter
23. Mobile tailor
24. Internet solutions
25. Researcher

Contract/self employment

26. Hawker/mobile super market
27. Event planner
28. Self publisher
29. Web publisher
30. Web designer
31. Chess instructor
32. Product/ service Marketer
33. Dance instructor
34. Computer instructor
35. Blogging

Knowledge based business

36. Consultant
37. Home tutor
38. Internet training

Rental services

39. Laptop rentals
40. Venture capital
41. Cab services

Special services

42. Day care/baby sitting
43. Errand services
44. Yoghourt making
45. Sandwich making
46. Customer services
47. Product promotions
48. Web content development
49. Digital photography
50. Sale of hand made crafts

There are still many more opportunities to look for just take time to observe and analyse your environment for solutions to people’s problems.


Related Articles


How to start and run a part time business in Lagos Nigeria


Starting a Web business in Nigeria

Saturday, October 17, 2009

How to start and run a part time business in Lagos Nigeria

By Onwueme Paul

A part time business is any commercial venture one undertakes usually as an alternative stream of income and during leisure time. Most part time businesses are leisure time activities like hobbies, interests, passions and exceptional skills or talents one might undertake for a fee. Examples of leisure time activities include baking, sewing, writing, reading, painting, playing (outdoor or indoor games), research activities, shopping and a lot more. Part time businesses could be run on weekends, during vacation or on holidays or anytime in which regular work is not done. In Lagos Nigeria, there abound many opportunities to start and run a part time business, it is just a matter of being observant and imaginative.

However some part time businesses could also be knowledge or experience related activities. Most people who engage in part time businesses are simply trying to insure themselves against the unexpected such as job loss, inflation, emergency, great opportunities for investment and situations requiring urgent use of substantial capital or funds.

Demola is a 33 year old accountant at an I.T firm in Ikeja. He makes over N 150,000 monthly from his retail store (which he runs during the weekends and on public holidays while his unemployed younger brother manages it for him during the week or while he is on assignment) but insists he would remain at his current job (despite being paid N 78,000 monthly). His reason for running his part time business is just to have a safety fund for himself and his wife if situation demands. As a result of his double income, Demola can afford to live above his ‘means’ while his colleagues who do not run any part time businesses cannot but in any case he is frugal and continues to live on the salary himself and his wife earn from their regular jobs.

How to start a part time business

Most part time businesses are usually as a result of a person identifying money making opportunities related to a past time. Let’s assume you love teaching and also love designing graphics, you could start a part time business teaching people how to design graphics or web pages. The principle is essentially the same, know your passion, know people’s needs and see how your passion can solve people’s problems or meet them at their point of need.

How to start you quest into the foray of part time businesses

Researching into the opportunity

Whenever you decide to start a part time business, ensure that you carry out an extensive research into the opportunity as it presents itself to you. The areas you should cover include finding the right niche, knowing the amount and quality of competition to face and the procedures you will adopt to stand out of the competition among other considerations.

Plan your approach

In business, failure to plan effectively is a major cause of businesses winding up. If you must run a part time business especially as an alternative source of income to your regular job, then how, where, when and who is served by your venture must be predetermined of course after a thorough analysis has been done. Ensure that your business runs in such a way that there is no clash in your regular schedule with your business needs.

Raising funds to start

Some part time businesses do not require funds or financial outlay to take off. If you engage in reselling fast moving products like recharge cards, clothes, fashion accessories, consumables or may be electronics, then you will certainly need cash to fund your business. However, skill and knowledge based services such as writing, web design, teaching and a host of others only require your competence and

Act according to your planned approach

After coming up with a workable next thing is to follow the plan faithfully without flinching. Note that business requires a lot of persistence and daring to succeed. The first six months of any business are usually very challenging especially considering the fact that word of mouth is your best resource in getting new customers signed up for your product or service.

Evaluating your performance periodically

After running your part time business over a period of say 12 months it is wise to take stock of what you have done over the period and also what you can do better.

Conclusion

If you set out to start a part time business, do well to remember that you have to efficiently manage your time and make do with the proceeds of your business but only according to your intentions for the business. So if you have a part time business because you want to raise money for a major project that means you cannot embark on a spending spree with the excess funds from your business.

Wednesday, October 7, 2009

How to apply to banks and other lenders for Loans

By

Onwueme Paul


One of the greatest challenges faced by businessmen while trying to secure loans for expansion or other projects is how to properly present their applications so that banks will favourably attend to it. However, there is the need to prepare yourself adequately prior to making your application. That is the focus of this article.

What is a loan?

A loan is idle capital granted to a willing user to carry out a productive activity or meet a productive need which promises profit as reward. The one who grants a loan is called a lender while the one who receives it is called a borrower. There are different kinds of loans and they depend on the length of time and the nature of the agreement between the borrower and the lender. Every economy needs to operate a mechanism that manages and operates a loan system which provides capital to enterprising individuals to create wealth with and protect lenders against loss of capital as well as reward them for their efforts.

Classification of loans

With or without collateral

• Secured
• Unsecured

Purpose

• Personal/individual/consumer e.g student loans, employee loans etc
• Commercial e.g business loans for increasing working capital
• Industrial such as industrial bonds and debentures
• Government including treasury bills

Duration

• Short term include loans that last less than 5 years typically 2 or 3 year loans
• Medium term such as 5 to 10 year loans
• Long term loans over 10 years

How lenders expect borrowers to use loans

Lenders expect borrowers to invest loans in practical and profit making ventures, commercial activities that have a profound effect on the micro or macro economy such as manufacturing, construction, retailing and other viable commercial activities. At the very least they should be invested in interest bearing investments more like fixed income investments like deposits, bonds, treasury bills and other similar investments provided that the rate of return is greater than the interest payable.

Where and when should loans be obtained?

Ideally a bank (commercial) should be the best place to seek a loan. But a number of restrictions could prevent any enterprising individual to seek such loans. For instance it is not uncommon for loan applicants to be turned off by bank loan requirements such as collateral, high interest rates, and very short repayment period. Naturally one would want to seek alternatives that offer stability of returns and peace of mind to the borrower. Hence one should seek loans from the following alternative means;
• Co-operative societies
• Membership associations
• Personal savings and previous investments
• Loans and gifts from friends and associates
• Micro finance loans
• Angel investors
• Non governmental organisations
• Employee loans among others

The best time to seek a loan is when you have done the following things accordingly;

• You have been able to identify a business opportunity especially one that is largely untapped
• You have thoroughly investigated the opportunity and have found it viable and profitable. Having professional experience in related field or business will be an added advantage in your loan application
• You have a good business plan
• You have an exit strategy in the event of failure
• You have a very good loan repayment plan
• You have adequately made personal commitments to contribute to the success of such as opportunity
• You are willing to give up time, energy and other resources to tap into the opportunity
• You have been able to establish a productive relationship with your prospective lender
• You have established either creditworthiness or considered a not too risky borrower by your prospective lender (ability and willingness to repay the loan make you credit worthy and this can be deciphered by an experienced lender)

What are lenders looking out for in loan applications?

Whenever you seek loans, there are certain fundamentals you must not overlook. These fundamentals are the yardstick lenders use in deciding whether or not to grant your request for loans. Here are the fundamentals;

1. Security of borrowed capital. All lenders are interested in knowing whether or not they will ever recover their loaned money or asset (what they simply want is an assurance that their borrowed capital is at least intact). If this question cannot be sufficiently answered then the lenders would rather keep their money than take whatever profit or interest your venture promises. Hence they may consider your possession of collateral or guarantor/sortie as enough protection from the risk of loan loss. Besides this having a good reputation or integrity could also provide a measure of assurance to the lender.

2. Knowledge and/or experience of intending venture by the loan applicant. How well you know and understand your business will determine whether the lenders would consider your application a big risk, mild risk or no risk whatsoever. Your knowledge and experience in your intending business is viewed by lenders as capital in lieu of money.

3. Purpose for seeking loan. Why do you need the loan? What will you do with the borrowed capital? How will you effectively use the loan to accomplish your financial goal? The lender is very much interested in knowing why their capital is needed and how their capital will be used.

4. Repayment plan. How will you repay the loan? The lender will not suggest to you how you should pay back. After asking sufficient questions about your intending or existing business, he/she will be interested in knowing whether you have any plans to repay and when the plan will take effect. The reason this aspect matters to the lender is because it ultimately determines whether you are out to take him/her for a ride. Will you be so interested in seeking a loan to solve a ‘problem’ and not know how to repay it? A poor repayment plan is a slap in the face of any willing lender. Your entire application will be rejected on this sole oversight.

5. How committed are you to your venture? The lenders want to know if you are willing to take reasonable risks in your business in order to make it succeed. In addition they want to know whether you are willing to sacrifice some of your valued assets to make your venture a success. This commitment on your part tells them you consider the success of your venture very important and since the repayment of loan plus interest depends on the success of your business, the lenders will often feel convinced that you deserve the loan.

Tips on how to apply for loans

1. Get your business plan well written and packaged. If necessary consult a business plan expert to help you manage and present your business plan in the most organized and professionally written form
2. Make enquiries about loan requirements noting what the bank’s preferences are.
3. Prepare your application letter well ahead of your meeting.
4. Don’t apply for loans when you have a bad reputation for late payment
5. State the purpose and date of loan request and redemption
6. Have a credible guarantor or sortie ready to stand in for you
7. Assets like shares, bank accounts, insurance policies, and other financial assets and jewellery and landed properties are usually preferred as collateral to physical assets like cars,
8. Banks usually interview applicants to ascertain their credit worthiness (ability and willingness to repay loans), be prepared to demonstrate these
9. Research the background of the lender always ascertaining their profile towards loan applicants
10. SME focused banks are more likely to grant loans to SME entrepreneurs than other commercial banks so try and note the difference.
11. Wish yourself good luck