Tuesday, 23 April 2013

Diary of an Under 30 CEO: It is Easier to Make Money Here

makemoney“You can’t make an omelette without breaking a few eggs”. – Lenin

By Ola’ Jacob Ajayi

VENTURES AFRICA - I recently attended The Mobile Money West Africa Summit at Orientals Hotel, Lagos. While the summit was going on, I noticed a white chap in his late twenties replying mails and receiving calls on Samsung galaxy tab. He kept going in and out every 20 minutes with a big bag.

At the end of the summit, we exchange pleasantries and he went on to explain his mission to Nigeria. The dude is from Ukraine and works with a top Ukrainian company that focus on developing end user hardware for homes and businesses.

“In Nigeria, you people have the market, imagine 150,000,000 people? My CEO gave me a task to sell this product (pointing at his big bag) to just 1,000,000 Nigerians at N2400 each” – Please do the maths

Every day, we hear stories of foreign investors coming to the country to invest. They prefer to pump their money here. They see us an emerging consumer-economy that can cough out billions daily.
One sad thing about Nigeria is that the same masses that complain there is no money are the ones giving out the little they have due to our “all-consuming” habit.

Dangote recently emerged as the 76th richest man in the world with a net worth of $11.2 billion. What the heck does he do? He is into retailing. He sells consumables to every man on the street. Hmmmm, so Mr. Dangote feeds over 50 million Nigerians daily at an average cost of just N100. – Do the maths again! He makes billions daily.

Another good study are the telecom providers. Do you think they make larger chunk of their money from their postpaid subscribers? No! They make it from you and I, the prepaid customers.
About 90 million phone users, cheapest top up card is N100, average of 20 million users recharge their phones daily. Another business scooping billions from Nigeria, right?

As it is with every profit-oriented venture, making money is like breaking bricks with your head. Nobody wants to do it but everybody wants the reward. You don’t expect to cash in if you are not able to make the sacrifices. Dangote didn’t start as a billionaire; he started as a thousandnaire solving people’s need in the north. The need expanded to more people in the six geo-political zones of the federation.

A secret about Nigerians is that we so much love the Abraham Maslow’s theory of need in no particular order; we love self esteem, belongingness, safety and psychological needs. Just solve any of these and be on your way to scoop your own money.

I spent part of my last vacation in Ghana with a business mentor who told me two ways to dip your hand into the masses market to make your money. “Jacob, there are two ways to make money in this world. 1. Sell a million naira product to one person/company. 2) Sell a one naira product to a million people. Any which way, you become a millionaire but the best method is to have product that sells for N1.00 and sell to 1 million people. Through that everybody can afford your product without breaking a safe”.

I thought deeply about this and discovered it is the same weapon being used by the rich men in our nation and continent at large; masses foot their bill unconsciously. They keep spending kobo by kobo enriching some people. Since they can’t innovate, they keep paying to use innovations. No wonder the holy bible says we shall collect from the hand of the poor and give to the rich.

Apparently, you don’t just swing into action without having a thorough plan of how you are going to hit the market right and leverage on our population to make a fortune. These steps will be of great values in helping out;
  1. Take a deep breath and ask yourself if you are truly ready to go into a business – don’t deceive yourself.
  2. Identify your strength in terms of what can you do to help people out – a flash back on your past could help.
  3. Create a niche market out of your strength – don’t be a general merchant, at least for now.
  4. Research into the field; SWOT analysis – Strength, Weakness, Opportunity, Threat, Competitors etc of the business,
  5. Map out your strategy
  6. Gradually execute your action plan.
  7. Go into the market with the mind of rendering service, not making money. Late Steve Jobs once said and I quote; “we don’t sell gadgets, we sell comfort to people so they can live life easier”. Apple is presently the most valued company just by making lives easier.
  8. If you are going to bootstrap the project, start small. Pushing 10% of your savings into it won’t be a bad idea. Never inject all your life savings into a business.
  9. Start selling to friends, family, colleagues etc – charity begins from home
  10. Package your brand - 2 years ago, a friend requested for a logo design from a business center and a mini ad agency. They charged N500 and N760,000. The business center did a better job with N500. We could have paid him a million if only he knew how to package his ability.
  11. Don’t be scared to hurt your fingers – Yes, this is business. Some things would go wrong along the line, try to sort them out instead of quitting.
  12. Expand fast but slowly – starting a business means sharing ideas with competitors.
  13. Blue and red ocean - as it is in life, it is always good to be a trailblazer, get to the market before others, build loyal customers, enjoy monopoly for a period and get set for a stiffer environment
  14. Pump your profit back into the business – this helps for sustainability
  15. Measure your growth.
Let’s get started now because the land is greener here than there. What do you think? Feel free to drop your comments below.

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