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Wednesday, December 9, 2009

How to Set up a cyber café business in Lagos Nigeria

A cyber café business is a sort of a rental business that involves the letting out of airtime (slots of minutes or hours to customers) for use in accessing the internet.
In Lagos Nigeria, there is a countless number of cafes with many of them rendering very unsatisfactory services. They often times are crowded places with many slow and not so functional computers and servers that render anything but satisfactory service delivery. This has led some people to prefer dedicated internet home services from reputable ISPs and Telecommunication companies with the result that many cyber cafes have lost many of their customers over time.

Why cyber café

We have cyber cafes for many reasons chief of which include;
1. The high demand for people to interact with friends over long distances. In that regard we find many internet users seeking to access the services of social networking media such as facebook, hi5, myspace and so on.

2. Also cyber cafes, provide ample opportunities for people to carry out research services as a result many internet users use search engines such as google to access information contained in various web pages on the World Wide Web.

3. People patronize cyber cafes to access opportunities faster than what conventional media (radio, television and newspapers can offer). In this regard, job seekers use the internet to access job vacancies, employment opportunities and so on. In this group of internet users are people who also want to be informed about other opportunities in real estate, travel and tour and so on.

Requirements

Setting up a cyber café is no mean feat. You have to overcome certain circumstances such as;

1. Registration with the corporate affairs commission.

2. Registration with Association of cyber café operators of Nigeria

3. Also registration with law enforcement agencies such as EFCC, NDLEA and ICPC

4. An account with a reputable internet service provider

5. A small or large (depending on the scale of operation) room

6. Computers

7. Servers and other internet devices

All this cost money, but with as little as N 350,000 one could set up a mini cyber café. Of course this cost does not include contingency just a rough estimate of acquiring computers and may be one year subscription.

Opportunities

Many small scale entrepreneurs have identified the need for people to surf the web and realize that location is a very critical factor that must not be overlooked. In areas with predominantly large student population, cyber cafes tend to have a large and steady stream of customers. Also in commercially active areas close to corporate bodies, there is also that tendency however with the growing popularity of internet users patronizing ISPs directly especially now that connection fees are relatively competitive, many cyber cafes may not be around for long.

Challenges

Like most businesses in Lagos Nigeria, there is a problem with electricity supply. Cyber cafes cannot operate without power and yet with epileptic power supply from PHCN, they must as a rule supply their own power using generating sets and also have to cater to other expenses that are incumbent to the business.

Conclusion

In this business, there is a limit in terms of profitability and growth as many factors work against those possibilities. Cyber cafes are good as businesses that provide side income as a result it favours small scale entrepreneurs. However, opportunities abound for exceptional cases.

Saturday, September 26, 2009

How to set up a Dry cleaning Business

Dry cleaning is the business of providing laundry and other cleaning services bordering janitorial, upholstery and other domestic cleaning including of rugs, walls (especially tiles) and windows. Also included sometimes are services rendered to corporate and commercial entities. The business of dry cleaning is a highly specialized venture requiring a great deal of expertise and efficiency. A variation of dry cleaning business is the laudro-mart which is very common in western countries.

In Nigeria there is only one well known laudro-mart at Lekki. However a large number of dry cleaning businesses exist providing mainly services for individuals’ clothing. A business like this requires a number of specialized equipments for use.

The business thrives on the premise that busy executives and socialites want to have their expensive clothing properly cleaned and maintained. Some of the methods used by dry cleaners include; starching, dying, warm rinsing and use of chemicals to remove dirt and stains from clothes and adding fragrance to them as well. Dry cleaning just like selling cars in Lagos Nigeria is a location dependent and back end business, meaning where you site the business and how well you satisfy your existing customers are major factors affecting sales.

Opportunities

The market for this business cuts across all age groups but is typically patronized by upper middle class and upper class folks. Most people who patronize professional dry cleaning businesses do not want to leave their clothes in the hands of people who will not do a good job or who might contract it to other dry cleaners thus charging a higher than normal fee. So being efficient and cost effective at the same time is tantamount to getting a pass mark from customers and the possibility of referrals. Remember the post about efficient service delivery? It could also be of help to you as you try to uncover the opportunities this business offers.

Challenges

Electricity supply is highly unreliable meaning that all your machines will have to be powered mostly by diesel generators. The location is another important factor. A good dry cleaning business should be located in an easily accessible place in a high brow area. Places like Allen Avenue, Adeniyi Jones, Victoria Island, Isaac John Street in Ikeja GRA, Ikoyi, Lekki and Ajah. Finding a suitable site in one of these places is a major challenge especially since the rents are very high.

Start up Summary

The cost of setting up a dry cleaning business is listed below;
• Rented space preferably measuring 50 sq metres or more =N= 800,000 for 2 years
• Machines and Equipment =N= 600,000
• Working capital =N= 900,000 for 6 months
• Generator =N= 200,000
• Others =N= 300,000
• Total =N= 2,800,000

Marketing and sales plan

To effectively market your services you will need to do a lot of marketing

1st year Projections
Sales projection


• Annual Sales =N= 4,400,000
• Expenses =N= 1,600,000
• Taxation =N= 980,000
• Net profit =N= 1,820,000

Investment and Returns analysis Projections

• Return on Investment = Net profit/Total Amount invested
= 1,820,000/2,800,000 or 65%
• Return on sales/margin = Net profit/ Total sales
= 1,820,000/4,400,000 or 41.3%