There are so many songs, so many proverbs about money. Everybody knows that ‘owo ni koko’ (meaning: money is key to everything). Yes, salvation is free, but ‘owo ni keke iyin rere’ (meaning: the gospel is free but it requires money to spread around). This goes to show how important funding is in every human endeavor. One of the most stubborn obstacles to running a business in Nigeria today is funding.
Many of us have great ideas running through our heads but suffer lack of funds. I bet if you have access to N10m today, you will get plenty business ideas before tomorrow morning. But then, talk is cheap.
Hope you find this useful. Let’s get the party started!
Bootstrapping is the first option of every startup. While you are still working full-time for someone or on a freelance gig, you save more and work extra hours to make some Naira. Before others start believing in your vision, you must have done more than mere wishing or thinking about your business ideas. It is your money that serves as seed funding. And when you finally float the small business, aim at bootstrapping so you don’t start running after investors way too early.
Africa’s richest man today, Alhaji Aliko Dangote, said that from the early stage of his business till now, he has been re-investing his profit into the Damgote group. This tells you how effectively bootstrapping can help grow your business with less dependence on outside support. He got loans or funds mostly when had plans to expand or venture into new line of business.
The risk in bootstrapping is minimal as the fund is yours. You are under less pressure for turnover with bootstrapping compared to other sources of funding. This doesn’t mean you should plateau when your startup starts growing steadily. To succeed using this method, you have to be very frugal with your business spending and develop a good bargaining power to get as many good deals as possible.
When your startup is warming up to launch, instead of borrowing, you could offer discounted products or provide special offers for for early registration. Marketing and creating awareness creation both online and offline could create financial burden, a temporary solution to this is to adopt one-on-one conversations to canvass for your early set of customers.
People enjoy feeling very important, take your product to your target audience. Give them mouth-watering offers. You get a lot of positive from this if you can coin out benefits that will make your early adopters stand-out among competition.
If your offer makes life easier for them or makes them beat opposition to milestone, you already earn yourself referrals. This pool of early adopters will provide funds as well as feedback needed to streamline your product or services.
How do you feel when you are offered exclusive access to service you badly need or unbelievable discount for something really nice?
This is similar to the early adopters approach but quite different. This way you outsource significant amount funds from customers who can pay you in advance for products you are bringing to the market. They fund your production, project or business activities in exchange for the products. They are investors kind of but all they get back is the actual product or service you offer at the end of the day.
Trust and your track record in things you have done before are the determinant factors in crowdfunding. You will need to visualize your idea for crowd-funders to buy into it and pay in advance.
Startup incubators or accelerators are companies that provide startups and small businesses with access to seed funding, mentorship, networking, business support tools and follow-on funding. There are several incubator programs currently running in Nigeria. Here is a list of few of them: Startup Incubators in Nigeria.
Incubators are a blessing to the nation’s economy. In the government effort to encourage entrepreneurship in the country, startup incubators, co-creation hubs should get due attention. These are companies who fuel the growth of startups in the country. They encourage job creation.
They serve as big brothers to startups. With their wealth of experience and connection, they help startups materialize their dreams. Your product may not even be market-fit yet. Accelerators will help you with necessary knowledge to make your ventures profitable.
This provides funding for high-risk startups and small businesses in return for a certain percentage of the company’s worth.
Startups who are cash-strapped but are not qualified for bank loans can get funds from venture capitalists.
Here are some venture capitalists in Nigeria.
You really need all the preparation you can get before approaching VCs for funds. They are not perfect though as they have turned down lots of business ideas that have turned out great successes. But in their own right, they are very good and blunt at shredding business ideas into pieces if your business idea or opportunity is not excellently put together. Have the mind to learn from this application whether you get the fund or not.
VCs could serve as great sounding board for business, new marketing or expansion idea regardless of whether you secure their funds or not. They want you to develop a tough skin because they know that their harsh response to you will be nothing compared to what your potential competitors will do to your business.
Having found possible sources of funds to start your business, now is the time to start your own business, no matter how small. Fear of how to raise fund kill great ideas right in people’s head most time. But, the idea is more important than money. Facebook is one of those billion dollar companies that started as a mere idea. ‘thefacebook’ was the an idea of a Stanford hacker who just wanted a page to display faces of dormitory colleagues and poke fun at them. Needless to say it has become an household name worldwide now.
When Mark invited eighteen of his colleagues for a meeting back then, only two showed up. Your idea might seem great only in your head today. Others, even your closest relatives, may not see the goldmine in your business idea yet. Do not be discouraged. Run with your idea, get patent, and protect it. Avoid fire fighters also. These are people who all they know is why your idea will not work out or how your business will derail if you eventually start.
VoguePay offers far more than making and receiving payment. We a have a whole lot of business support tools that can help you smoothly run your business. When you think of a payment processor, VoguePay is the best option for you as a startup. This not blowing one’s trumpet. The reality is that we do not charge you until you start receiving via our platform.
Creating your merchant account is easy, prompt and FREE. With as low as N1,500, you could verify your business account and start transactions earnestly.
Integration of your business into our platform is a simple so-it-yourself routine.
With little assistance from our always ready and friendly customer support team, you are payment processing platform is up and run effortlessly.