Ease of doing business in Nigeria: CAC extends business name registration discount

THE NEWSGHOST, NIGERIA – Last year October, Nigeria’s Corporate Affairs Commission (CAC), the government agency responsible for registration and regulation of businesses in the country, announced a 50% reduction in the fee for registration of business names till the end of the year.

Instead of paying a registration fee of ₦10,000, you can now pay a fee of ₦5,000 for a business name registration with CAC.

In a tweet on October 3, 2018, the commission announced that this rebate will be open between October 1 to December 31, 2018.

But just as year 2018 came to an end and the window for the initial concession elapsed on December 31, 2018, CAC declared again in a tweet on January 3, 2019, that it was extending it till March 31, 2019. It had published this notice earlier on its website too.

In its statement, the commission explained that:

‘The Business Incentive Strategy is aimed at creating a window for Micro, Small and Medium Enterprises (MSMEs) to formalize their businesses, which will enable them own corporate account with Banks, have access to Loans, grants and other government interventions.

Members of the public are enjoined to take advantage of this window, to register their Business Names at the reduced cost of ₦5,000 after the Name Reservation of ₦500.’

Last five years, Nigeria was cited in several news reports as one of the worst places in Africa to start business.

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Nigeria advised to seek economic growth through innovation

THE NEWSGHOST, NIGERIA – On August 23, 2017, while presenting a research paper at the WorldStage Economic Summit in Lagos, Dr Ayodele Shittu, an expert in Entrepreneurship and Business Innovation Economics from the University of Lagos, says Nigeria’s business environment is yearning for innovation in order to fulfill its potential of stimulating economic prosperity.

The paper was based on the theme of the summit ‘Transforming business and economy through innovation’.

In the paper, according to report, Shittu insisted that, as a nation, Nigeria must promote collaborative relationships between Nigerian universities and local industries.

He says the nation must also develop SMART (specific, measurable, acceptable, realistic, time-based) focus (or goals) for specific economic sectors, promote knowledge-sharing between the enterprises in both formal and informal sectors, put in place physical centres such as business incubator, accelerators, etc, encourage innovative supply of infrastructure and utilities, as well as prioritise innovative financing options to both existing and new businesses.

The research paper assessed Nigeria’s business environment based on three indicators: ease of doing business, business confidence and capacity utilisation.

On ease of doing business, even though an increasing trend is displayed in the last eight years, the performance has been woeful with Nigeria ranking 169th among 190 countries.

Shittu considers this ranking embarrassing and advises the federal government (FG) to setup the Presidential Enabling Business Environment Council to supervise the competitiveness and investment climate agenda at both federal and state levels in the country.

On business confidence index, he says there is a glooming perception of the business environment among leading businesses in selected sectors.

According to him, ‘While the level of pessimism is declining, common constraining factors cited among the firms surveyed include financial barriers, unfavourable political climate, competition, and insufficient local demand.’

Shittu also warns that Nigeria’s educational system, if not prioritised, may see reduction in future human capital. In this regard, the available evidence shows that the score of the future workforce is lower than the score of the current workforce by 10 percent or more.

With respect to capacity utilisation, he explained that ranked 108th out of 135 countries and 90th out of 135 countries on Business Dynamism and Innovation Capacity indicators respectively.

Shittu believes that the task of creating an enabling business environment remains a mirage and now is the time to take action.

‘We need to rethink our business culture and create innovative approaches to creating, nurturing and developing transformed local businesses with global outlook. But we must bear in mind that the process of transformation is not linear,’ he advises.



Now you have created a business, what next?

As a new entrepreneur who just launched a new business and operated it for a while, you soon get to the point where you start asking yourself, ‘What next?’

I can bet that if you go into entrepreneurship thinking it ends after you create a business, you will be disappointed. The entrepreneurship journey is an unending one.

One of the things I learnt from all my years at business school and work is that the process of building a business is a continuous one. Of which, this is often necessitated by the fact that businesses need to adapt to changes in their environment on an ongoing basis. So creating a business is never the end of the road.

Most successful businesses you see around today started small. If you look closely at each one, you will realise that what got them so far and big can just be coined in one simple word: improvement.

Dearest entrepreneur, what is next is improvement

The art of improvement has to do with making incremental development, making step-by-step transformations towards a state of better quality. As Ron Caroll, a business systems coach, puts it in his blog post12 principles of business improvement‘, ‘Improvement activities focus on providing the customer the best value by removing waste from the organization—defects, delay, and the resulting higher costs.’

Once you are done creating a business, my best advice for you is to start queueing up necessary improvement tasks. The best way to go about this is to start with tasks having the highest priority and significance to the immediate business concern. If you have little capital for your business, it would be better you also start with tasks that require less cost as well.

For example, you are a new entrepreneur who just created a food delivery business. From your little capital, you have managed to get a office space, a laptop, a desktop printer, a few pieces of office furniture, a power generating set and two delivery bikes. You have also employed an office assistant to assist with paperwork and office front desk. Your food delivery operations already started out four weeks ago, customers have been calling in gradually and revenue is beginning to stream in.

So, what next? Improvements of course. In this case, you could start with less costly, customer-facing aspects of your business, things like your business logo (and your business name, if your current business name does not fit your type of business well). You could seek expert advice or read blog articles about this, if you know only little about graphic design and business naming, to make sure you get this right once and for all and not end up wasting time, money and efforts.

Then, you could move on to your website. If you already have a website, you should improve your website SEO to ensure that people can easily find your business on the internet when they search. If you do not have one, you need to get one as quick as possible to enable your business to fully tap into the digital economy.

Now, your business logo and business name have been improved to top quality, and your website is also looking more compelling and responsive. You can now think of improving your marketing strategy. All your previous marketing efforts may have been traditional, outdated and non-interactive. This is the right time to improve your marketing strategy. It is time to seek out modern marketing strategies, to go digital. Go after your customers via social media, email, mobile phone. Offer new and existing customers a gift to take an action that is very likely to translate to more sales and revenue for your business in the long run. Develop products and services that satisfies and delights them.

Then you can go on at that pace into other important aspects of your business. Improve everything from staff capability, to product and service quality, overhead costs, etc.

After completing this improvement cycle, you should evaluate how all aspects are doing since improvement was made. If you ever find any aspect lacking again you should start another improvement cycle to fix it. There is no limit to improvement. When changes occur in the environment, remember you have to make improvements to your business too.

The advice I have laid in this example is tailored to the case I illustrated in it. If you are in a different kind of business or have large capital, the priorities and concerns may vary and the costs may not be a very significant constraint for decision making.

I hope you enjoyed reading this post. I would be happy to hear from you if you would like to share some remarks.



The alchemy of business: A recipe for cooking up good business

The task of building a business is the task of building the component systems of a business: the people, machines, processes.

Most people think that by going to business school and having adequate money they already have all it takes to build a good business. But after graduating from business school and investing lots of money in a new venture, they find out that they still lack what it really takes to make good business.

The problem is that there are no formulas for building a good business as most business education institutions often teach in their curriculum. There is just one recipe for cooking up a good business.

Do what businesses actually do and invent a better way to do it: Create and deliver value

The curriculum in many old business schools heavily concentrates on management education and blurs the line between business and management practice so much that both practices appear as the same. There is no dispute on how important management is for business, but it is not related to business in any way.

Businesses create and deliver value to paying customers, Josh Kaufman explains in his book The Personal MBA. In the same book, Kaufman noted that, ‘Management was thought of mostly as an exercise in getting people to work faster and do exactly what they’re told.’ While management skills are useful in business practice, it cannot replace business skills.

The most essential ingredients for cooking up a good business are business skills. Management skills inevitably fall within the set. But with management skills and no business skills, it is very possible to lead a business to wrong objectives.

Business skills are those vital capabilities that you will need to create a business that does what businesses actually do.

One of the flaws of business education, as Kaufman points out in the Personal MBA, is that, ‘Most business books (and business schools) assume that the student already knows what businesses are, what they do and how they work – as if it were the most obvious thing in the world.’

Kaufman annotates five processes that define a good business. He says a business is a repeatable process that:

1. Creates something of value…
2. That other people want or need…
3. At a price they’re willing to pay…
4. In a way that satisfies the customer’s needs and expectations…
5. So that the business brings in enough profit to make it worthwhile for the owners to continue.

And each one of these processes represents a unique and significant part of a good business, ‘each of which flows into the next’, as Kaufman explains:

‘1. Value Creation. Discovering what people need or want, then creating it.
2. Marketing. Attracting attention and building demand for what you’ve created.
3. Sales. Turning prospective customers into paying customers.
4. Value Delivery. Giving your customers what you’ve promised and ensuring that they’re satisfied.
5. Finance. Bringing in enough money to keep going and make your effort worthwhile.’

Take away any one of these five parts and you will never have a business. Kaufman sees these five parts as interdependent processes, of which without any one of them, ‘You don’t have a business – you have something else.’

‘A venture that doesn’t create value for others is a hobby. A venture that doesn’t attract attention is a flop. A venture that doesn’t sell the value it creates is a nonprofit. A venture that doesn’t deliver what it promises is a scam. A venture that doesn’t bring in enough money to keep operating will inevitably close,’ he writes.

To build a good business, an entrepreneur must have reasonable knowledge of these five interdependent parts of a typical business and understand how they work. Every business is made up of these five unique parts. The better you are able to define and manage these five parts of your business, the more likely it is that what you are building will turn out a good business.

*First published on www.ahmedhassan.com.ng

Ease of doing business in Nigeria worsens



Business environment in Nigeria is in a very poor state. In the latest World Economic Forum (WEF) rankings for global competitiveness in doing business, the country ranks at a very low point.

Nigeria ranks 127 out of 138 countries considered in the Global Competitiveness Index, according to report.

All the countries that rank below Nigeria in the index are war-torn and crisis ridden.

In 2015, Nigeria ranked 124 on the index. For some reasons, it was easier to do business in Nigeria in 2015 than it is now.

WEF blames the lack of competitiveness in doing business in Nigeria on poor infrastructure, poor health and primary education, and poor higher education and training.

wef-gci-2015
*(WEF global competitiveness chart for Nigeria 2015)

Nigeria’s strongest advantage on the index is its market size, according to the WEF report.

‘Although still relatively low, the government deficit has almost doubled since last year and national savings has significantly suffered, worsening the current account position,’ WEF said.

‘Banks are less solid, reducing the availability of credit. Despite the central bank ending its currency peg, financial authorities have retained restrictions on access to interbank market, meaning access to finance will remain difficult for many businesses.’

Four tips for growing a startup business fast

growth

Generally, businesses need to grow fast enough to recover or compensate their investments and become profitable, mostly within a certain timeline. Startup businesses are not exempted from this. In fact, they are the ones that are most vulnerable to lack of growth or slow growth. Startup businesses easily close down and come to an end when there is poor growth.

Rory O’Shea, at one time a visiting professor in innovation and entrepreneurship at MIT Sloan School of Management and a faculty member at the Smurfit Graduate School of Business of University College in Dublin, Ireland, says ‘slow growth isn’t an option’ for internet businesses especially.

With these ideas you can grow any kind of startup business fast enough:

Have what to sell
One of the biggest growth problems that startup businesses face is getting initial customers. Many startup business owners usually find it difficult to come up with something to sell and how to sell it. But this is not something that is avoidable.

It is best to face it. Build something you can sell and try selling it to a few people. Listen to feedbacks from the people you are targeting to sell to, some of these feedbacks can be useful for making what you are selling better or finding something else that would sell and learning how best to sell it. This is creating traction (inward pull) for your business to build and grow upon.

Equal priority
All the work needed to get a startup business running are equally important. Almost no aspect of the business is more important than the other. And even if there is, while you give more attention and resources to one the others might fall and the entire business is at the risk of breaking down.

Give the same level of priority to every task at hand. Although if there is a necessary sequence for tasks to be completed you should follow the order, but the priority for other tasks down that sequence should not drop.

Find a cofounder
Help can make work easier and faster. You must have heard about division of labour. It is based on the idea of getting help in work.

Many successful businesses known today had two or more founders. Like Facebook, Google, Twitter, LinkedIn. Of course, one person took the lead, but that person relied on the cofounders. The quality of skill and energy of cofounders can transfer to the founder and reinforce every member of the business team to perform better.

Be sure to agree on how much each cofounder would put into the business and what reward will go with it.

Build relationships
People are like the blood in the vein of businesses. It is simple, businesses are run by people and they serve people. On either side of the equation, you find people there. So, building relationships is very important for businesses.

It is not just relationship with anybody, the kind of relationships that will help your business grow are the ones that are relevant to it somehow, either on the running or serving side. Ability to build and manage these kind of relationships can help a business grow faster than the owners ever imagine.

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*This post was originally published on Haribita