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Monday, December 10, 2018

Sample Business Plan: Setting Up a Sports Bar in Nigeria

A sports bar should be a meeting point where sports enthusiasts can hangout to drink, socialize and discuss sports related issues. It’s like a regular bar where one can visit after work except with a sports theme. Nigeria is a fertile ground for a sports bar and hospitality arena because of the very strong interests displayed for football and occasionally other sports such as; big boxing fights, wrestling and other similar sports.
According to several market reports on the sale and consumption of alcoholic beverages in Nigeria, there has historically been on the rise year on year since independence. This is regardless of the economic situation and fact that prices of beers and spirits go up once or twice every 3 to 5 years. So in reality, whether the economy is doing well, inflation is biting hard and cost of beer and spirits keep going up it has no real effect on the level of demand and consumption of alcohol in Nigeria.

  • Nigeria is Africa’s largest beer market
  • Over 49 billion liters of beer alone is consumed by less than 70% of Nigerian men
  • Age group of consumers vary mostly from 17 to 60
  • Average Nigerian male between 17 and 60 consume 1 bottle of beer every 2 days
  • Average beer costs 200 naira
  • That makes Nigeria’s beer market to be worth over 9 trillion naira per annum in sales

Why there high demand for beer in Nigeria?
There are many reasons for this strong demand and all of them point to social and cultural factors rather than economic or political but I will only focus on 3 factors. First is the local and cultural significance of hosting and entertaining visitors and guests and alcohol is prominently on offer to guests and visitors alike regardless of the income level of the hosts. We see this at weddings, child naming ceremonies, burials, house warming, birthday parties and other social occasions. As long as there is a reason to celebrate and host others, there must always be beer to share. Secondly, the popularity of entertainment and hospitality among Nigerian employees as useful past times and stress releasers unlike in the west where hobbies and lifestyle engagements offer succor against stress. This causes the huge in sales of entertainment and hospitality providers such as; bars, hotels, nightclubs, sports bars etc - the average Nigerian gainfully employed and facing many stressors will seek escape through fun and fun usually means chilling with friends drinking, socializing and discussing all manner of issues after work or in the evenings at bars, night clubs, pepper soup joints and similar hangout spots. Thirdly is the rapid growth in population. Nigeria has one of the highest population growth rates in the world at 2.9% per annum which means out population will double almost every 20 - 25 years.   

Conclusion: Year on year more beer would have to be manufactured to meet the ever growing demand, there will always be increased sales

Sports and Entertainment Bar Markets in Nigeria
It is hard to quantify the number of bars and leisure centers that offer beer but within densely populated urban areas, there exist at least 1 major bar or beer parlor serving at least 200 to 500 or more customers. That brings us to an estimated 120,000 to 400,000 beer parlors not including bars. Note a beer parlor only serves drinks and sometimes food but a sports bar is a level higher - offering customers live sports entertainment in addition to beer.

There are numerous but let’s look at only 4 namely; Rowdiness, Insecurity, power supply and Environmental Nuisance. When major football live events are being hosted, there is a tendency to pool crowds - more crowd means more noise and disorderliness which might mean more sales but temporarily costs business efficiency. Secondly, criminals (fraudsters, kidnappers and armed robbers) occasionally come to bars to look for potential victims. Besides the bar itself could become a potential target if security lapses are not identified and resolved. Thirdly, the noise produced from sports bars could disturb neighbours, people of questionable character often think of a sports bar as a place to meet and engage people for untoward advances which might harm the reputation of your business. Another is power supply which must be stable during peak periods and this doesn’t come cheap. But these are minor challenges since a well-managed sports bar can often resolve these challenges.

NB: There are at least 15 challenges I have identified but only 4 are mentioned in this post.

Success Factors to Consider
  • #1 Suitable Location
  • #2 Entertainment focused service
  • #3 Relaxing Ambiance
  • #4 Excellent Customer Service
  • #5 Consistent Service delivery 

Basic Startup Requirements for Setting up a Mini Sports Bar
  • 6 Plastic Tables – 60,000
  • 28 plastic chairs – 140,000
  • 2 Fridges – 260,000
  • 1 deep Freezer – 95,000
  • Bar Counter – 250,000
  • 8 bar stools – 60,000
  • Generator Set – 120,000
  • Rent – 480,000
  • 6 months salaries – 450,000
  • Other Startup Costs – 960,000
  • Total – 2,875,000
First Year Financial Projections
  • Gross Sales: 6,960,000
  • Margin on Sales: 4,820,000
  • Operating Expenses: 1,680,000
  • Profit Before Tax: 1,560,000
  • Taxation: 520,000
  • Profit After Tax: 1,040,000
  • Breakeven month: 3rd or 4th month
  • Payback: 2 to 3 years
This is a very simplified version of the kind business plans I write. Want more details on how to setup a proper sports bar need a good business plan with detailed analysis, the right market considerations and operational plan? Give me a call: 0803 206 4106 or email: paulonwueme@gmail.com

Sunday, December 2, 2018

Nigerian Business Plan Writers and their Malpractices Exposed

This post is not meant to be controversial nor is it bad mouthing the so called competition. This more or less is an expose of quack business plan writers with no verifiable competence engaging in malpractice to make a sale. This is the second article I am writing on a similar topic, here I wrote this article in 2017 how to spot a real business plan writer in Nigeria because a few quacks were trying to make a quick buck using ridiculous claims and their shady acts could put a dent on industry standards and authentic business plan writers with proven track record. So these is my attempt at saving the client headaches from patronizing quacks and dishonest people – take note there are many authentic business plan writers who won’t make you regret using their service but certainly not quacks. I will expose these quacks claiming to be business plan writers for their dishonesty in lifting contents from my blog posts and other reputable websites and trying to deceive unsuspecting people into taking them seriously as business plan writers.

  • Definition of bad mouthing – speaking ill of a person behind their back especially unjustifiably. Doesn’t apply when what is being said is true and the person being spoken of can easily become aware of it – these guys visit my blog from time to time
  • Definition of malpractice – engaging in unfair and dishonest professional behavior for personal gain. There is a level playing field in business for the competition and it does not involve underhand tactics, illegality and malpractice
  • Plagiarism – claiming other written works without due credit to source. A true test of credibility is how you acknowledge the source of published information on your website if you want to lift otherwise get permission from the author
You are now left with two choices after reading this post – do your homework well before patronizing a business plan writer or be swept off your feet by spurious, false and ridiculous claims from a quack.

Plagiarising Other Website Contents to Make a Sale – a low blow to your Credibility
This is an illegal activity and can result in law suits and extra legal battles. Think of it this way, if you steal another person’s work and present it as yours in a school project or engage in exam malpractice – you will definitely be expelled at least at University level if caught for academic dishonesty. To prove how shallow and lazy these folks are, any website content published on a website is the property of the owner of that website unless it is not the original source in which case express permission from the actual owner must have been sought with approval. But here are three examples of so called professional business plan writers lifting website contents;

#1 Stolen from my blog post here Poultry Business Plan and pasted word for word with minimal editing here (there are still more but only highlighted this paragraph)
  • Nigerians consume about 1.2 million tons of poultry meat annually according to Poultry Association of Nigeria whereas all the poultry farms in Nigeria produce 300,000 tons per annum leaving the outstanding 900,000 tons to smuggling since officially there is a ban on importation of poultry products in Nigeria since 2004.
#2 Stolen from my blog post here Creche Business Plan and pasted word for word with minimal editing here (this one is even worse, he lifted an entire blog post only adding table of contents and a request for you to buy his business plan)

  • A day care or crèche is a place where babies, toddlers and young children are kept during the daytime while their parents are busy with work. It’s a sort of playground/classroom setting where these younglings hang out, play, rest and are taking care of by trained handlers so that later in the day after work the parents can come pick them up.
My Verdict: Patronize these business plan writers at your own risk

Monday, November 26, 2018

Why it is More Profitable to start your Next Business Small

This article is written in response to an obvious trend I have noticed about many startup businesses in Nigeria. There seems to be this absurd belief among many newbie business owners that starting big or well will make a huge difference in attracting and retaining customers. In the case of a fashion house that started in 2014 with so much noise, 2 years later they are on the brink of closure. They had everything going at first – heavy marketing and advertisement, bought branded cars to showcase their business, rented a well-positioned store in an expensive part of Abuja, but they are now struggling with paying salaries, have not been able to maintain the hype they started with and in a few months’ time things will definitely get bad when their loan repayment will be due. This should be contrasted with the business environment in Nigeria which is very costly for businesses to operate in.

Why am I being so harsh in my criticism you may ask, it’s because these business owners don’t realize business is not a popularity contest nor is it a show of force – as the military will often do to intimidate criminals and terrorists. When you are in business, you have only one mission, to make profit whether that means starting with very little expenses and growing organically or starting with massive sales and working to reduce costs overtime, you still have a duty to make your running expenses less than your total business revenue.

To buttress this point, I am recommending starting your next business small with as little capital as possible and I will explain why doing this and growing your business patiently and profitably overtime is the best approach for making long term growth possible.

5 Reasons to start your Next Business in Nigeria as small as possible instead of big
As you make that entry into your next business venture, keep this at the back of your mind, while it makes sense to start with very little capital sometimes it may not be reasonable, but these are exceptions. If I have 1 million naira to open a restaurant but I discover I can still achieve this with less than 400,000 naira, then why would I want to start with 1 million naira when I am not so sure I will breakeven in time? So that brings us to reasons below;

Quicker Breakeven
The number one reason to start a business as small as possible is to achieve breakeven as quickly as possible. Breakeven is the point at which your business starts making profit and the smaller the startup capital, the quicker the breakeven meaning the less capital outlay you have the faster your business can actually start making profit.

Increase your Payback period
Payback period is how long it takes for your business to recoup the total invested capital. Assuming you invested N10 million into a car wash whereas your competitor invested N300,000 into his car wash, it is possible for your competitor to recoup his investment in less than 3 months while it will take you 4 years or even more to recoup your investment which is risky and less sustainable for an SME service based business.

New SME Businesses usually have Low Incomes for first Year
Almost all new businesses experience low income levels for the first 6 to 18 months as they struggle to make their presence felt in the market place and build a steady customer base. This means that the less money you had when you started, the less costs you would have to contend with. For instance, if I start a business with 300,000 naira my rent cost could be 60,000 naira per annum which is not too hard to achieve even when income is low whereas if my rent is 900,000 naira per annum and I experience low sales, that means I either have to borrow to pay my rent or I will have to deep my hands into company reserves to pay the rent which is a bad financial strategy because rent is an expense except where it can guarantee sales but certainly not for a new business that is unable to pay its first year’s rent.

New Businesses usually experience many mistakes
Most new businesses are faced with challenges they have never had nor are prepared to deal with. Some of these challenges when unresolved could cause the business to lose customers or spend more when they could have spent less. This means the more capital you spend while learning from your mistakes, the less likely you are to recover from it and vice versa – invest less and pay less for costly mistakes.

Race to build your brand
The world of starting and growing a new business is actually a race to build your brand. Businesses need to build a reputation within the market place and only a consistent effort will make this happen. Consistency comes from a business that can sustain itself and remain afloat which is more common with a business that has enough income to sustain its expenses – the less funded businesses at startup stage have a slight advantage in branding because of cost effectiveness however from an aggressive marketing standpoint, the larger your budget, the more capable you are.

The excuse of not having enough to start your next business can be traced to your unwillingness to start with what you have meaning sometimes the little you have is actually enough or even more than enough to start but you only just need to start to realize this. The proof of this is with the world’s richest man – Jeff Bezos. He started Amazon from his basement instead of a fancy office space and minimized operating cost even while not making profit in the early years of Amazon. Today his company has weathered the storm and is one of the most profitable companies in the world.

Looking to start a new business with limited capital but lack sufficient information or experience to do it? You need a professionally written business plan to do that for you and you can have one prepared for you when you reach me on: 0803 206 4106 or email me at: paulonwueme@gmail.com