Looking for more information? Search this blog

Friday, September 30, 2011

How to write an effective business proposal in Nigeria

A business proposal is a profitable business offer/opportunity which has been identified and is presented by one person to another in order to make a sale, seek collaboration, funding or technical support to the person the proposal is targeting. 

It sounds very simple doesn’t it? Whereas the reality is that presenting a business proposal it’s not that simple. So many people write business proposals day in, day out but very few are ever successful and that is because they are unable to capture the key ingredients and the very essence of what a business proposal is and isn’t and how it should be presented etc

Take for instance I have identified a very quick way to sell shoes through an extensive market research and my findings reveal that I need a well optimized website to target a particular market let’s say male corporate executives in Lagos, then I can create the opportunity to sell shoes fast to this market because I understand how it works but I don’t have the shoes to sell, What do I do?

The solution is to find a reliable shoe retail shop, then approach the owner of that shop with the business opportunity of how he can quickly sell his shoes through my well optimized website. How this would benefit him and his business, the costs and the terms of how to make this business opportunity would have to be well captured in a business proposal I must present to him to encourage him to sign up.  

Why is a business proposal needed?
There are three broad reasons we need business proposals and they can be summarized into the following classification;
  • To invite marketing/technical partners: here like in the example above we have a situation in which one person has one of the ingredients for success and the other has the missing ingredient, they both pull resources together to achieve their collective marketing/sales objectives
  • To raise funding for the identified business opportunity: if your identified business opportunity requires a certain amount of money but you lack the finance to fund it naturally you’ll need to invite someone who has the money and offer either interest on the loan or profit sharing as the terms of the contract would specify
  • To sell your product or service: this is especially common if you are rendering a service to a client and those clients belong to a particular niche

7 Steps to writing an effective business proposal
Then comes the hard part of writing a business proposal which is putting pen to paper, making sure that the business proposal turns out to be what you set out to make it which is the persuasive document. Here are my 7 step recommendations for anyone seeking to write an effective business proposal

Step #1 - Identify the needs of the intended target
You must know beforehand the peculiar needs of the person or Organisation you are targeting. Where you fail to know their needs it becomes very difficult to position the benefits of your offer which is the main thing that convinces people to accept your proposal.

Step #2 - Get the right proposal format
There are many proposal formats and it depends on whether you are targeting a government institution, a private sector company, a high net worth investor or perhaps a professional. There are several business proposal formats you can find online but a standard business plan format must also capture key aspects such as;
Section A. Executive Summary
Section B. The Background and Objectives of the Offer
Section C. Technical Requirements
Section D. Financial Summary
Section E. Terms and Conditions

Step #3 - Write concisely but persuasively stating the benefits
The best way to get attention to your offer and motivate the intended target is to state the benefits of your offer with proof that you can deliver. Let the benefits sell your offer but kindly note that any claims made in your proposal must be credible and readily verifiable. Once you start writing out the details of the proposal you must ensure that you write concisely using very official language and only making assertions based on indisputable facts.

Step #4 - State the requirements of the proposal clearly
There should be clearly stated requirements in the proposal which would tell the other party what is required of them and under what conditions the proposal can take off and work. Usually it is better to state the things which must be in place before the opportunity can work and what you lack and/or already have on ground.

Step #5 - State the terms and/or conditions of the contract/business opportunity
There should be clearly stated terms and conditions of the offer. What will be the legal basis of honouring an agreement? This is the condition whereas how can that legal basis be explained so that it is well understood by all parties are the terms. State both of them in the business proposal.

Step #6 - State the cost implications
How much should each party bring to the table or how much should the client pay in order to use the service. Sometimes the cost of the service is a selling point and may appear at the beginning of the proposal in the introduction but at other times the price shouldn’t come until after all the benefits have been explained and the prospect has made a decision.

Step #7 - Draw out the proposal contract agreement
This aspect of a business proposal is optional. In some cases a business opportunity doesn’t require signing a legally binding document whereas on other occasions it may require signing one and where this is the case don’t forget to include a contract agreement especially if you are rendering a service or require a partnership with your proposal in order to avoid conflict and to also protect you against any legal issues that may come up after the prospects has agreed to the agreement. The contract must state the names of the parties, their roles in the agreement, what will go to each party and the terms of terminating the contract/agreement.

Are you looking to write an effective business proposal that will motivate action from your prospect and want a professional touch to it? Give me a call or email and your wish will be my command. 0803 206 4106 or email: paulonwueme@gmail.com

Wednesday, September 28, 2011

Car Wash Service as Profitable Business idea

Have you ever considered that a car wash service may be a profitable business idea? Well ask a few who are smiling to the bank, car wash service can be a very lucrative business venture. In Abuja for instance, it is not unusual to find car wash services that generate more than N 10,000 daily. For as little as N 200 (depending on location and type of vehicle) per vehicle there is so much opportunity to make money.
There is really no entry barrier to this business and a few unemployed graduates are already doing something useful with themselves by running car wash businesses. It is a simple business to start and requires minimum capital.
Anyone with a car is a potential customer. Most car owners may not actually want to patronize car wash service probably because they have children or relations who may be willing to do it for them for free but some others would rather not for other reasons. Maybe they live alone and don’t like washing their cars or don’t have the time to do so they therefore rely on car wash services to do justice to their cars.
Ideal locations
A car wash service is best suited in locations where there are many cars such as in large estates with many car owners as residents, on busy roads or close to filling stations. Sometimes a place close to an auto mechanic or car dealer is not a bad idea either. Just keep in mind that you will need to be close to busy spots where car owners often times have to park or drop their cars from time to time.
Getting people to trust you to leave their cars in your custody may be a challenge at the beginning. But that doesn’t mean you don’t stand a chance. With time as you gain regular customers and build credibility that challenge will be overcome. There is also the problem of environmental inspectors charging out on you for using a spot that may be termed ‘not suitable’.  You also need to be on the lookout for touts.
Start up Information
If you are diligent and have washed cars before, then you are good to go. However, you still need to have some resources to enable you function effectively such as simple cleaning tools (brushes, rags, sponges, wipers etc), car liquid soaps, buckets and water. All these shouldn’t cost more than N 5000 to purchase. But as time goes by and you begin to expand your operations, you may consider using more advanced cleaning devices such as automatic sprayers, pumps, steam wash and so on.
Profit Potential
The profit potential is very encouraging. With as little as N 5000 invested, daily sales could be in the region of N 5000 at a going rate of N 500 that means 10 cars a day or if say N 250, then 20 cars a day. You could recover your initial investment within 1 or 2 days or at most a week. From then on you are in profit.
Other Incentives
Car wash service can be combined with other related businesses such as selling car accessories e.g car locks, seat belts, car seat covers, steering covers, wipers, car wash detergents and so on.
Very easy and straight forward business that just requires a little patience and devotion, it is also very profitable on the long run.

Related Articles

How to make money selling clothes

How to start a drycleaning business

Monday, September 26, 2011

How to start an Online Business Directory

One of the really nice ways of making money online is by the use of internet based business directory which can be financially rewarding for its owners. A business directory though is not a child’s play unlike some other online business ideas such as blogging. With a business directory there is active supervision and monitoring of the website or portal by a human being who is qualified and to manage the content posted on the directory.
What is a business Directory?
A business directory is a listing of businesses and their contact information with the relevant categories or industry they fall into. Usually this listing is done in alphabetical order and could also be done regionally. For instance there is the famous online business directory in www.nigeriagalleria.com which is Nigeria’s largest online source of listing information. A business directory can sometimes take the form of a listing service in which case rather than supplying the contact information of the businesses involved only their services or classified adverts are mentioned or listed. In this kind of directory we have www.nairalist.com and www.dealfish.com.ng both of which offer free online advertisement services.
How to make money from an online business directory
There are several ways to make money with an online business directory. The most common way is by Google Adsense program in which relevant advertisements to the contents on the directory are displayed to visitors. There is also paid premium listing service in which the online directory can list businesses in each category with preferential treatment given to the subscriber. The paying customer gets to have a rather bold display of his/her business or services in his/her industry thereby receiving more exposure. There is a third way of making money with an online directory which is by selling advertising space at strategic locations within the website such as at the very top, by written text and even within the texts.  Additionally there is also leads generation in which businesses can promote their products and services to generate sales. This fourth method is called affiliate marketing and is best suited for businesses that have an online market place.
Examples of Business Directories
The following are successful online business directories. These businesses are making some cool cash by listing businesses and/or their services
1.       www.ezinearticles.com
This by far the world’s largest articles directory, it is a website that works on the premise that businesses and organizations can market their products and services to a global audience by using informative articles that have links pointing back to the website of the article author’s website. Ezine articles is suitable for both product promotions and public relations.
2.       www.nigeriagalleria.com
Nigeria galleria is a purely business listing service. All it does is to list the contact information of businesses according to sectors, regions and industry.
3.       www.craigslist.com
This is a listing service that focuses on services rather than on providing contact information of the service providers themselves.
4.       www.nairalist.com
This is Nigeria’s own craigslist but with focus on jobs, dating service, apartments and houses and autos.
5.       www.dealfish.com.ng
A free listing service that focuses on mainly jobs, property, electronics and autos
This business requires time and commitment but can be very rewarding on the long run.

Friday, September 23, 2011

How to start a Paper Pencil Making Factory: SME Business Idea in Nigeria

Paper pencil production is a viable business venture which is capable of returning over 100% on your investment within 12 months and break even by 9th month with N147,000 daily sales.

How Feasible is Paper Pencil Production in Nigeria?
Recycled Paper Pencil Production is viable in Nigeria because the six success factors have been found to make it viable all exist in Nigeria namely; a sizeable population of school age children, target market locations within the same city and that city has a large population of corporate organisations and urban city dwellers and four other success factors. See end of article for more details.

What is the Market size for Paper Pencils in Nigeria?
Most of the pencils used in Nigeria is consumed by school children mostly those in primary school, also teachers, students in higher institutions, carpenters and even in many offices. With a massive population of school children running nearly 40 million, there is so much money to be made from this business. In Nigeria, according to a federal government report monitored on Daily Trust Newspaper Nigeria spent N750 billion in 2009 on the importation of pencils which we are capable of starting and running on our own if we so desire. The actual market demand is hard to estimate but with over 40 million school children consuming over 2 billion pencils per year we can safely assume at least N30 billion market gross sales for primary school children alone.

Opportunities in Paper Pencil Production in Nigeria
There are only four companies involved in Paper pencil production in Nigeria as of March 2017 and they are located in Abuja, Enugu, Akure and Lagos respectively. None of them produces more than 20,000 units of pencils per day but Nigerians consume over 4.8 billion pencils per annum meaning these 4 companies combined which only produce 24 million pencils - less than 1% of the total market demand – have huge growth potentials. Secondly there are other opportunities along the product range such as production of eye pencils, coloured pencils which can replace crayons and very hard pencil types such as 9h or very dark pencils like 4B etc which we also import. Thirdly production cost for paper pencils is very low at just below 65% and minimal labour costs the profit margin is larger than average manufacturing

What are some of the threats and Challenges of Paper Pencil Production in Nigeria?
  •  Power supply: production must not be interrupted so a minimum of 10 hour daily fueling costs for generator set must be in place this doesn’t come cheap
  • Distribution expenses can be high but there are effective strategies that can help minimize these expenses so that the business can reach its target market inexpensively
  •  Cheap, imported imitations from Asia especially China
  • Foreign Exchange scarcity and value fluctuations: the main raw materials which are imported for now are not under serious threat from dollar scarcity and price fluctuation
Financial Projections for first year Paper Pencil Production Factory in Nigeria
The cost of paper pencils per unit based on production cost analysis is N 5.73 each and at factory price of N7 per unit first year profit of over N 5,635,000 naira can be realized if sales of N 44,100,000 is achieved within 12 months based on 21,000 pencils produced daily for 300 working days in a year.  The total startup costs is N5,305,000 implies payback period is in the 12th month while breakeven should occur either in the 9th or 10th month.

Production Details per day
  •  Total output per day at full capacity: 21,000 units
  •  Total Number per set – 12
  •  Total packaged sets – 1,750
  •  Total sets per carton – 25
  •  Total number of Cartons per day – 70
  •  Factory Price per Carton – N 2,100
  • Total sales per day – N 147,000

First Year Income statement
Assumption: 21,000 produced pencils per day and 300 full production days a year
  • Total Sales – N 44,100,000
  • Cost of Sales – N 28,649,600
  • Gross Profit – N 15,450,400
  • Estimated Annual Expenses – N 7,400,400
  • Net Profit before Tax – N 8,050,000
  •  Taxation – N 2,415,000
  •  Net profit After Tax – N 5,635,000

Projected Returns on Investment
Net profit after tax/Total outlay X 100 = 5,635,000/5,305,000 X 100 = 106.2%

Start-up capital
The amount needed to set up a pencil making factory varies depending on your intended capacity. Here is a breakdown of the start-up capital;
·         Machinery – N 960,000
·         1 year Rent (a single room for a start is sufficient) – N 330,000
·         Generator set – N400,000
·         Delivery Van – N900,000
·         Raw Materials – N 200,000
·         Working Capital - N 300,000 (6 months)
·         Salaries – N 555,000 (3 months)
·         Contingency – N 300,000
·         Others – N 1,360,000
·         Total – N 5,305,000

Concluding Summary on Paper Pencil Production in Nigeria
A relatively simple and small manufacturing business to set up with very few and not so threatening challenges but the potential is quite huge.

You can order for the complete feasibility study report which contains an effective sales strategy, organizational setup and implementation plan, success factors for paper pencil production with complete production cost analysis, income statements and other financial projections by simply calling: 0803 206 4106 or email me: paulonwueme@gmail.com