(Biz tool Kits)
BY BRIDGET OLOTU
LAST week, we started with reasons for business failures; this week, we are concluding the series. We discovered last week that Asokoro and Maitama in Abuja (preferred locations of our client) did not meet any of these criteria.
This is because Microfinance Bank business as you know is a “mass market” business. It is not to serve the interests of the elite; it is designed to meet the needs of micro fund users and micro-credit needs of the poor, micro and small businesses and low income groups. This is the spirit of the microfinance initiative.
Abuja is a modern city with all the trappings and appellations of elitism, modernity, upper class and highbrow neighbourhoods.
Locating an MFB in this city comes with an expensive capital outlay, is not close to the target market as more than 60 per cent of the workers in the FCT, from our findings, live outside the city in places like Yanyan, Maraba in Karo LGA, Masaka, etc.
Even the residents in the estates within the city are not the target market or right market for microfinance services. They are the elite and do not need microlending and microfinance services.
Furthermore, getting workers that would run the bank would also be a Herculean and an expensive task as most of the professionals drive into the city every morning to work and leave in the evening for their homes.
We concluded that if our client was to site his bank in Abuja, it would have to be based on the following reasons: Establish the head office in Abuja and have cash centres around the markets and suburbs, especially in Masaka and Maraba, and a few other places within the city, etc, where the target market is; Establish the bank as a social or political project.
On the other hand, our research in Lagos favoured some areas in the city as meeting the criteria we had set for choosing the right location.
At the end of the research, our client was saved the pain, stress and economic losses this kind of investment in the wrong location could have brought on him. He then began to look at how to start an MFB in Lagos.
If not for this market survey/feasibility study, our client could have probably lost the N50 million he had wanted to invest in the project.
By spending about 1 per cent of that amount on the market survey and business plan we later prepared for him, we saved him from losing his capital to bad business decision and furnished him with adequate information on how to successfully and profitably operate his microfinance business.
What does this teach SMEs? Don’t start a new business, launch a new product/service, change into a new line of business without carrying out a market survey or doing your due diligence regarding the said business or product.
This is because whatever product you are going into will not be consumed by you or by the members of your family.
So, it is important you look at what the market needs, how the market sees or will see this product/service, examine the capital outlay for the product and the expected income, examine how long it would take for you to recoup your investment or break even, examine the challenges and threats your new product will face in its desired location, look at what the competition is doing, and what the reaction of your competitors will be and the impact of this reaction on the success or otherwise of your product, etc.
This is why we encourage start-ups to get a business plan before launching their businesses.
No matter how little the effort is, getting adequate information regarding your business, your target market, your marketing strategy, business structure, investment dynamics and other imperatives will make your foray into business a success while helping you escape failure in the marketplace.
Business is both an art and a science. The art aspect deals with how the human elements are successfully fused in a marriage of common goal and destiny, while the science aspect means that you can actually research, observe, gather facts and analyse same to arrive at an objective conclusion regarding the business or develop some predictability in your results or outcomes. Businesses therefore fail because of the lack of or inadequate information and due diligence carried out before the launch and during the life of such enterprises.
Olotu is the CEO/Lead Consultant, DEAIM Innovative Resources Ltd., email@example.com
(Strictly for the young)
SO once again, here I am being totally random! And in my randomness, here I am with free advice.
How much of my own advice do I take? The answer friends, is blowing in the winds!
• Never take coffee in the morning and Power Horse at night. You will just bounce off the walls and miss school the next day.
Think about it! What is it we are constantly trying to stay awake for? Sometimes I wonder if we enjoy any of the things we indulge in.
You go for a random party where everyone has this smile on their faces, and you know, you just know they would all rather be home, but somehow, it would be un-cool to not be here! Okay o!
• Everything good for you is bad for you, and everything bad for you is good for you.
This is one of my most loved theories! People are always telling us what to eat, and what not to eat.
Do and not do. But no one has ever told me why agbo is bitter and coke is sweeter. Why it is easier to give in to temptation than to resist it, and why watching television is so much fun but apparently burns no calories. Leave me jo!
• The secret to losing weight is wearing bigger sized clothes.
This is self-explanatory.
• Never have friends that are prettier than you.
Nor smarter. Your friends should be shorter, so you always look tall, bigger, so you always look small, and pretty dumb, so you are easily, the sharpest tool in that friendship shed!
• Love is like walking under a bus, getting hit by a train, sinking at sea, crashing your car and going insane (Culled from Hey Mum by Bachelor Girls)
The real tragedy is... it feels so good that we get right up and do it all over again. And again.
• Love is pleasure, love is pain, love will simply drive you insane!
• The Road less travelled is less travelled for a reason
• There are no Wrong or Right decisions; just decisions that work in the moment. I once tried to make a decision and spent so much time trying to make the decision that I ended up worrying about making the decision that I never did make the decision. Look at me now?
There are times when the only way to solve an equation, is via the very simple, very apt, mini-mini-mani-mo!
• Maybe we reincarnate. Or maybe we live once. But if we live well and hard, then once is enough Abi?
So, stop waiting for that afterlife or other life before you fully live! If you can jump, jump! If you can swim, swim! If you can sing, sing! There is more to life than simply being alive!
• Whatever you are feeling right now has been felt before, is being felt somewhere else, and will be felt again.
You are truly not alone. Sometimes when you s.h.a.r.e with someone, you see that it really is not as bad as you think it is. Unless it is the stain on your wedding dress. But then again, who wants to focus on the wedding when the big picture is the marriage itself?
•. Meaningless. All is meaningless. And this is not meant to be gloomy. It’s just, after all is said and done, it is all hype. And you should not believe the hype!