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Friday, September 30, 2011

How to write an effective business proposal in Nigeria

Whenever you have a business idea you know will do great and provide the kind of results that will be profitable, naturally a business proposal comes in handy. But not every business proposal is worth the effort in the eyes of those who are in a position to approve it for various reasons. Sometimes the business proposal doesn’t do a good job of explaining the business opportunity. Sometimes it might just be that the idea is relatively new and so is considered risky. So it follows that a good business proposal, one that is well written may not be sufficient to convince a potential client on the merits or benefits of the proposed business idea or opportunity. Not everyone is swayed by words or pictures, some ideas may sound objectively good but not good enough for some other people. It really requires some depth and skill to properly provide a basis for the business proposal to be accepted.
So in order to get to the heart of the matter – writing an irresistible business proposal let us really get to the heart of what a business proposal is and should look like.

What is a business proposal?
It is a documented business deal that offers and explains a business opportunity or idea and set out the requirements and implications of such an offer. In another way it could simply be termed a piece of document that identifies and explains a business deal or idea and spells out the conditions for setting it up and the benefits and who gets what. We could also say a business proposal is a contract between two or more parties that will yield an expected reward for all those involved.

Why write a business Proposal?
Business proposals are written in order to exploit a business opportunity. The person proposing the business usually does not have all the means to successfully exploit the opportunity and so needs to partner or gain the support of someone else in order to realize the opportunity. Let’s assume that you have identified an opportunity to market a particular product in a new market you have identified but you do not have the means to exploit that opportunity perhaps you lack the mobility to deliver the products or the warehousing facility or may be the finance, then writing a proposal to someone who has what you lack is the link between the opportunity and the desired profit.

How to write a powerful business proposal
Business ideas that have been identified and agreed upon must be properly spelled out in order to have a workable guide. The how of business proposal writing is the plan and its details spelt out and the role and rewards everyone is expected to contribute and receive. The steps involved in writing out the documents could follow this format, please note that you don’t state these steps verbatim but they merely reflect the questions that must be answered before they become irresistible.

What’s in it for me?
Before approaching anyone for a business offer first check to know what they would really like, that now becomes the basis of what is in it for them. If I am offered a deal in which my skills are needed then I must first know what is in it for me in terms of profit before I agree to be part of it.

What is involved?
What are the requirements of setting up the deal? How much do I have to invest in the deal or what other things am I supposed to bring with me to the table? That is the second thing that needs to be spelt out in the business proposal.

Who gets what?
Who gets what in terms of profit sharing formula? How much of the expected profit will come to me and how much will go to others involved.

Provide the details of the business opportunity
What are the potential risks involved? What are some challenges that may be faced? The other partners should be informed on time so that they don’t feel tricked later on when things start going differently.

At this point the business deal should be attractive because the profit and costs have been clearly spelt out. The details of the deal should be the last thing that should come up and preferably after the profit or motive of the deal has been clearly stated.

Tips and Warnings about writing a business proposal
Just because the deal has been sealed doesn’t mean that all is well certain other things still need to be put in place such as;

Get the approval and Set the terms of the business deal
If the details are acceptable, then get the other parties to agree to set terms. There must be terms and conditions that apply to the deal although in order to set boundaries and resolve disputes that may arise in the course of the business deal. This should come after the deal has been accepted.

Sign an agreement
Ensure that when the proposal is accepted that all parties involved sign an agreement that they shall be bound by the terms of the deal.

Want to have a professionally written Business Proposal you can sell to potential partners, investors or Suppliers? Contact me to help you write one: 0803 206 4106 or paulonwueme@gmail.com

Wednesday, September 28, 2011

Car Wash Service as Profitable Business idea

Have you ever considered that a car wash service may be a profitable business idea? Well ask a few who are smiling to the bank, car wash service can be a very lucrative business venture. In Abuja for instance, it is not unusual to find car wash services that generate more than N 10,000 daily. For as little as N 200 (depending on location and type of vehicle) per vehicle there is so much opportunity to make money.
There is really no entry barrier to this business and a few unemployed graduates are already doing something useful with themselves by running car wash businesses. It is a simple business to start and requires minimum capital.
Anyone with a car is a potential customer. Most car owners may not actually want to patronize car wash service probably because they have children or relations who may be willing to do it for them for free but some others would rather not for other reasons. Maybe they live alone and don’t like washing their cars or don’t have the time to do so they therefore rely on car wash services to do justice to their cars.
Ideal locations
A car wash service is best suited in locations where there are many cars such as in large estates with many car owners as residents, on busy roads or close to filling stations. Sometimes a place close to an auto mechanic or car dealer is not a bad idea either. Just keep in mind that you will need to be close to busy spots where car owners often times have to park or drop their cars from time to time.
Getting people to trust you to leave their cars in your custody may be a challenge at the beginning. But that doesn’t mean you don’t stand a chance. With time as you gain regular customers and build credibility that challenge will be overcome. There is also the problem of environmental inspectors charging out on you for using a spot that may be termed ‘not suitable’.  You also need to be on the lookout for touts.
Start up Information
If you are diligent and have washed cars before, then you are good to go. However, you still need to have some resources to enable you function effectively such as simple cleaning tools (brushes, rags, sponges, wipers etc), car liquid soaps, buckets and water. All these shouldn’t cost more than N 5000 to purchase. But as time goes by and you begin to expand your operations, you may consider using more advanced cleaning devices such as automatic sprayers, pumps, steam wash and so on.
Profit Potential
The profit potential is very encouraging. With as little as N 5000 invested, daily sales could be in the region of N 5000 at a going rate of N 500 that means 10 cars a day or if say N 250, then 20 cars a day. You could recover your initial investment within 1 or 2 days or at most a week. From then on you are in profit.
Other Incentives
Car wash service can be combined with other related businesses such as selling car accessories e.g car locks, seat belts, car seat covers, steering covers, wipers, car wash detergents and so on.
Very easy and straight forward business that just requires a little patience and devotion, it is also very profitable on the long run.

Related Articles

How to make money selling clothes

How to start a drycleaning business

Monday, September 26, 2011

How to start an Online Business Directory

One of the really nice ways of making money online is by the use of internet based business directory which can be financially rewarding for its owners. A business directory though is not a child’s play unlike some other online business ideas such as blogging. With a business directory there is active supervision and monitoring of the website or portal by a human being who is qualified and to manage the content posted on the directory.
What is a business Directory?
A business directory is a listing of businesses and their contact information with the relevant categories or industry they fall into. Usually this listing is done in alphabetical order and could also be done regionally. For instance there is the famous online business directory in www.nigeriagalleria.com which is Nigeria’s largest online source of listing information. A business directory can sometimes take the form of a listing service in which case rather than supplying the contact information of the businesses involved only their services or classified adverts are mentioned or listed. In this kind of directory we have www.nairalist.com and www.dealfish.com.ng both of which offer free online advertisement services.
How to make money from an online business directory
There are several ways to make money with an online business directory. The most common way is by Google Adsense program in which relevant advertisements to the contents on the directory are displayed to visitors. There is also paid premium listing service in which the online directory can list businesses in each category with preferential treatment given to the subscriber. The paying customer gets to have a rather bold display of his/her business or services in his/her industry thereby receiving more exposure. There is a third way of making money with an online directory which is by selling advertising space at strategic locations within the website such as at the very top, by written text and even within the texts.  Additionally there is also leads generation in which businesses can promote their products and services to generate sales. This fourth method is called affiliate marketing and is best suited for businesses that have an online market place.
Examples of Business Directories
The following are successful online business directories. These businesses are making some cool cash by listing businesses and/or their services
1.       www.ezinearticles.com
This by far the world’s largest articles directory, it is a website that works on the premise that businesses and organizations can market their products and services to a global audience by using informative articles that have links pointing back to the website of the article author’s website. Ezine articles is suitable for both product promotions and public relations.
2.       www.nigeriagalleria.com
Nigeria galleria is a purely business listing service. All it does is to list the contact information of businesses according to sectors, regions and industry.
3.       www.craigslist.com
This is a listing service that focuses on services rather than on providing contact information of the service providers themselves.
4.       www.nairalist.com
This is Nigeria’s own craigslist but with focus on jobs, dating service, apartments and houses and autos.
5.       www.dealfish.com.ng
A free listing service that focuses on mainly jobs, property, electronics and autos
This business requires time and commitment but can be very rewarding on the long run.

Friday, September 23, 2011

How to start a Paper Pencil Making Factory: SME Business Idea in Nigeria

Paper pencil production is a viable business venture which is capable of returning over 100% on your investment within 12 months and break even by 9th month with N147,000 daily sales.

How Feasible is Paper Pencil Production in Nigeria?
Recycled Paper Pencil Production is viable in Nigeria because the six success factors have been found to make it viable all exist in Nigeria namely; a sizeable population of school age children, target market locations within the same city and that city has a large population of corporate organisations and urban city dwellers and four other success factors. See end of article for more details.

What is the Market size for Paper Pencils in Nigeria?
Most of the pencils used in Nigeria is consumed by school children mostly those in primary school, also teachers, students in higher institutions, carpenters and even in many offices. With a massive population of school children running nearly 40 million, there is so much money to be made from this business. In Nigeria, according to a federal government report monitored on Daily Trust Newspaper Nigeria spent N750 billion in 2009 on the importation of pencils which we are capable of starting and running on our own if we so desire. The actual market demand is hard to estimate but with over 40 million school children consuming over 2 billion pencils per year we can safely assume at least N30 billion market gross sales for primary school children alone.

Opportunities in Paper Pencil Production in Nigeria
There are only four companies involved in Paper pencil production in Nigeria as of March 2017 and they are located in Abuja, Enugu, Akure and Lagos respectively. None of them produces more than 20,000 units of pencils per day but Nigerians consume over 4.8 billion pencils per annum meaning these 4 companies combined which only produce 24 million pencils - less than 1% of the total market demand – have huge growth potentials. Secondly there are other opportunities along the product range such as production of eye pencils, coloured pencils which can replace crayons and very hard pencil types such as 9h or very dark pencils like 4B etc which we also import. Thirdly production cost for paper pencils is very low at just below 65% and minimal labour costs the profit margin is larger than average manufacturing

What are some of the threats and Challenges of Paper Pencil Production in Nigeria?
  •  Power supply: production must not be interrupted so a minimum of 10 hour daily fueling costs for generator set must be in place this doesn’t come cheap
  • Distribution expenses can be high but there are effective strategies that can help minimize these expenses so that the business can reach its target market inexpensively
  •  Cheap, imported imitations from Asia especially China
  • Foreign Exchange scarcity and value fluctuations: the main raw materials which are imported for now are not under serious threat from dollar scarcity and price fluctuation
Financial Projections for first year Paper Pencil Production Factory in Nigeria
The cost of paper pencils per unit based on production cost analysis is N 5.73 each and at factory price of N7 per unit first year profit of over N 5,635,000 naira can be realized if sales of N 44,100,000 is achieved within 12 months based on 21,000 pencils produced daily for 300 working days in a year.  The total startup costs is N5,305,000 implies payback period is in the 12th month while breakeven should occur either in the 9th or 10th month.

Production Details per day
  •  Total output per day at full capacity: 21,000 units
  •  Total Number per set – 12
  •  Total packaged sets – 1,750
  •  Total sets per carton – 25
  •  Total number of Cartons per day – 70
  •  Factory Price per Carton – N 2,100
  • Total sales per day – N 147,000

First Year Income statement
Assumption: 21,000 produced pencils per day and 300 full production days a year
  • Total Sales – N 44,100,000
  • Cost of Sales – N 28,649,600
  • Gross Profit – N 15,450,400
  • Estimated Annual Expenses – N 7,400,400
  • Net Profit before Tax – N 8,050,000
  •  Taxation – N 2,415,000
  •  Net profit After Tax – N 5,635,000

Projected Returns on Investment
Net profit after tax/Total outlay X 100 = 5,635,000/5,305,000 X 100 = 106.2%

Start-up capital
The amount needed to set up a pencil making factory varies depending on your intended capacity. Here is a breakdown of the start-up capital;
·         Machinery – N 960,000
·         1 year Rent (a single room for a start is sufficient) – N 330,000
·         Generator set – N400,000
·         Delivery Van – N900,000
·         Raw Materials – N 200,000
·         Working Capital - N 300,000 (6 months)
·         Salaries – N 555,000 (3 months)
·         Contingency – N 300,000
·         Others – N 1,360,000
·         Total – N 5,305,000

Concluding Summary on Paper Pencil Production in Nigeria
A relatively simple and small manufacturing business to set up with very few and not so threatening challenges but the potential is quite huge.

You can order for the complete feasibility study report which contains an effective sales strategy, organizational setup and implementation plan, success factors for paper pencil production with complete production cost analysis, income statements and other financial projections by simply calling: 0803 206 4106 or email me: paulonwueme@gmail.com

Saturday, September 17, 2011

Top Business Ideas for High School and College Students

What are some of the best business ideas that students working at home or wherever may be school - for those in college – can pursue and do without much stress to them or their studies? Personally I would recommend a business idea that rhymes perfectly well with their hobbies or is in line with their studies. For instance an accounting student who loves to write can make money from a freelancing business. On the other hand he can pursue a business like selling accounting software or holding accounting or book keeping classes for small businesses that would need them. Another suggestion would be for them to pick a sustainable business that is easy to set up and costs little to set up or maintain but which has potential. In that case the following business ideas are suitable for students and I consider them to be the top business ideas for students.
1.       Posting You Tube Videos
Easily one of the fun filled and easiest ways to make money, posting videos on You Tube is a very rewarding experience well at least for those that have been successful with it. With a camcorder or digital camera or mobile phone, there is no limit to making amateur videos which can be posted on YouTube. You Tube has a partnership program enables people to make money from their uploaded videos through contextual advertising.
2.       Blogging
Blogging is becoming an increasingly popular way by which people especially students can make money online. In this era of facebook, twitter and other social networking online communities that offer users a WYSIWYG platform, you can make money blogging about your favorite topic. There are so many topics to start with that just picking one to write about is a sure way to earning passive income for yourself as a student.
3.       Selling electronic Hand-outs
You can carry out an extensive research into a very difficult academic subject or topic and then compile your handout into an easy to read and understand report or manual sell it to fellow students. This can be done online or in offline as well. Imagine if you can sell 1000 globally handouts on may be C++ programming guide to fellow students who want to learn it via a website or blog within a year, you can make some cool money for yourself as well. Of course if you so wish the hand-outs don’t have to be in electronic formats only.
4.       Driving Lessons
Do you have a car and don’t know what to do with it? I’ll suggest you teach others who don’t know how to drive for a small fee, less than what they would pay if they attend driving lessons from an accredited driving school. How do you get your customers? By simply placing classified adverts in local newspapers or even online.
5.       Teaching fellow Students
You can also hold private lessons why you teach fellow students in school. If you are an accounting major and have sound knowledge of accounting, then why not teach others who don’t? Making money this way is really cool and easy and it also falls with your academic pursuits. You don’t get distracted while you make money since what you are doing falls naturally with your studies.
6.       Ebay Auctions
You could also do what some people do on ebay. They look for products to buy directly from wholesalers and resell these same items for a profit. What I mean is, as you browse through ebay, find an item you believe is very cheap, buy it then at a later date try and resell it for a slightly higher amount than you bought it. This especially tends to happen with second hand goods especially electronics and computers.
7.       Affiliate Marketing
This is the process of selling another person’s product by promoting it with articles either on your own blog or website or on an articles website. Affiliate marketing just involves talking about the benefits of a product and its relative competitive value over substitutes. The idea is to give a detailed presentation of the product in order to convince readers to buy it. You the person promoting it makes money from commissions you earn on every successful lead you convert. Many businesses have affiliate programs such as; Amazon, ebay, Google, Alexa and a host of others.
8.       Write Product Reviews
This is similar affiliate marketing except that with writing product reviews, you are not necessarily trying to sell a product, what you are merely doing is providing a guide to assist buyers in making the right decision for whatever product you are reviewing. For instance the popular website www.carbuyingtips.com is a review website. They don’t promote any particular vehicles but merely inform buyers about the various options available to them. They then monetize their website using Adsense and sometimes sell advertising space to car dealers.
9.       Freelance writing
Freelance writing also offers students a way to make money. Some websites are wholly devoted to the idea of encouraging writers to sign up with them and post as many articles as possible. Such websites are called article revenue sharing websites and they include; www.hubpages.com, www.squidoo.com, www.suite101.com and even Google Knol. Every member is his own editor and publisher so you earn ‘royalties’ in the form of residual income from adsense on your articles over time. Another method of freelancing involves writing on a contractual basis for freelance websites such as; www.elance.com, www.odesk.com and www.guru.com. After signing up with them, you can then bid for contracts and if successful get paid a fee for every completed project.
10.   Arts and Crafts business
This is especially for people who are talented in arts and crafts business. Imagine if you can sell your paintings, sculpted works, drawings, poems, even handmade toys. What about doing tattoos, graffiti or writing inspiring love quotes or messages. Some people are good at designing greeting cards, while some can do other forms of graphical designs. The list is endless.