Preparing for a Sure Business Plan

Before getting into business one should ask a warm up questions like:

1.      What is the type of business?

2.      How will I be classified?

3.      What is the purpose of this plan?

4.      Who are our target audience?

5.      How can we use the plan to advance?

6.      What market need are we satisfying?

7.      How is my approach better than existing products and services?

8.      My time table to get my offering to the marketplace.

TIPS

Be sure of these tips if you are writing a business projection/proposal.

1.      Approach to be market driven rather than products driven.

Investors are only interested on how the product will be received in the market.

2.      Quality is the competition.   

3.      Present your distribution plan to the targeted audience.

4.      Exploit you company uniqueness. (Like traded secret)

5.      Emphasis to be on management strength.

6.      Present attractive projections – be realistic in you market data.

7.      Show possible funding source because banks interest always lies on stability, security, cash flow coverage & fund return

8.      Close with a bang – drive home your points that you are offering a good deal.

“Until you are able to say where your money goes you are not qualified to handle money”

A MUST HAVE FOR ENTREPRENEURS

1.      Intelligent, brilliant and has potentials

2.      Has a forward looking disposition towards the market prospects

3.      Believe God is more or his side than with anyone else

4.      Is faced by the twin evil of poor basic infrastructures, small or no capital.

5.      Is not attuned to borrowing to leverage.

6.      May or may not keep adequate records

 

SCHEMES FOR THE ENTERPRENEURS

The scheme are mostly credit orientated a few offer capacity building/ training and infrastructure development for entrepreneurs. Some are for export while some are in form of tax incentives owned by state, federal government Private Sector foreign agencies, non governmental organization; schemes for groups, individuals, firms etc. Micro Credit approaches are adopted in certain cases a general problem of poor access to the schemes

INSTITUTIONS ESTIBLISHED TO FACILITE SCHEMES

The following establishments could go a long way to help out.

1.      The Country’s Central Bank

2.      Bank of Industry (BOI)

3.      Export and Import Banks

4.      Agric Coop and Rural Development Banks

5.      Export Promotion Council in your country

7.      National Directorate of Employment (NDE)

8.      Investment Promotion Council

9.      Small & Medium Enterprise Development Agency

10.    Deposit Money Banks (DMB) Microfinance Banks (MFBs) NGOs/MFIs

11.    International Development Agencies  

CREDIT ORIENTED SCHEMES INCLUDES:

a.       Agricultural Credit Guarantee Scheme Fund (ACGSF)

b.      Agricultural Credit Support Scheme (ACSS)

c.       Microfinance Programme/Micro Credit Fund

d.      Small & Medium Enterprises Equity Investment Scheme (SMEEIS)

e.      Small Scale Industries Credit Scheme

f.       Sundry Refinancing & Re discounting Facility

g.      Sundry Credit facilities

ACCESSING THE SCHEME       

1.      Engage in a discernible legal/Legitimate business activity

2.      Possession of a recognizable identity

3.      Observance of applicable tax laws

4.      Some scheme may require

          -        Incorporation of business

          -        Membership of business organization e.g. NASSI, NASME,

                   Chambers of commerce/MAN and the like 

5.      For credit oriented scheme:-

          -        Clean credit history

          -        Relationship with a financial institution

          -        A good sense of record keeping

 

AGRICULTURAL CREDIT GUARATEE SCHEME FUND (ACGSF)

There are five here:

1.    Banks are guaranteed by the Central Banks up to a reasonable percentage balance on borrower’s account in the event of default less security realized.

2.    The target clientele is farmers, Individuals, groups, cooperative societies & Limited Companies

3.    Engage on any agricultural activity (Crop, Livestock, aquaculture, forestry etc) or agro-processing activity integrated with at least 50% of farm input.

4.    Must have an account with a deposit money bank or microfinance bank and be saving

5.    Accessing the facility qualifies a farmer/group/firm to at least 40% rebate or the interest paid on the loan if loan is repaid on time.

ACCESS TO FUND

1.    Access is through microfinance bank or microfinance subsidiaries of deposit money banks.

2.    Policy provides for either unit or state microfinance bank based on capitalization and geographical scale of operation.

3.    Loan of up to $2,000. 00 is considered micro credit.

4.    Entrepreneurs can obtain up to a reasonable amount to start up with and without collateral but with just third party or cross guarantee.

5.    Individuals and group can obtain a loan amount of up to 1% as 5% respectively of the shareholders fund of the microfinance bank unimpaired by losses.

6.    Collateral registration, financial statement of business or evidence of business registration shall not be required.

7.    The restriction prohibiting a bank from lending to someone who has co-signed or otherwise guaranteed a loan from the same bank shall not apply for a microfinance bank.

WHY IS ACCESS DIFFICULT?

1.    Entrepreneur generally has weak capacity for obtaining credit in adequate asset and low capital.

2.    High vulnerability of small business to market variability

3.    High mortality rate of small business

4.    Poor business plans/proposal

5.    Poor record keeping which makes pre-credit assessment difficult

6.    Dearth/unreliability of information from entrepreneurs

7.    High administrative/transaction cost for bank lending to entrepreneurs.

8.    High cost of doing business discourages them from assuming extra cost (of Borrowing)

9.    Ineffective Judicial administrative system

10.                       Poor repayment culture

11.                       Inconsistency in policy.

CONCLUSION

The spirit of enterprise guarantees wealth creation and that remains an ever flowing fountain from where everyone including generation next can draw from. Note and I quote “Your rewards will always be determined by your results while your wealth is the products of your contribution.”