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Category: Business Idea

Do Startups Really Need Auditors?

April 29, 2019

The dream of every startup is to start off the project first, and then make profit. Having in-house or external auditors for the startups is not usually part of the game. Auditors are, however, usually there to review the accounts of companies and organizations to ensure the financial records of the company are accurate and rid of any illegality. They can also act in an advisory role to recommend possible risk aversion measures and cost savings that could be made by the business. An auditor can simply spill the beans about how you go about your expenses or how to go on borrowing. Here we discuss whether your startup business really needs an auditor in the first years of its doing business.

Auditing Gives You A Chance To Know More About How Well You Keep Your Records 

Auditing is important for your startup because it will help review the procedures your business uses to create and store records. The auditor reviews an inventory or listing — digital or physical — of the records your company keeps. The listing provides the auditor with an understanding of the volume and type of records your business manages. Auditing is incredibly important as bad accounting could lead to allegation of fraud and negligence, which may give rise to other serious issues in the future.

Once business owners know that their accounting process is up to date, it would offer them the opportunity to make key financial decisions for the growth of the business. They would also learn that for the business to be successful, they have to all work towards delivering the best results.

Auditing Will Give You A Chance To Fix Certain Errors Early

Businesses often slide into bigger problems because some minor issues were not detected and resolved at the outset of the business. What auditing does is to forestall this problem, including resolving any legal or tax issues immediately as they occur.

The risk here is that since most startups may lack the technical skills to detect some game-changing errors, errors can usually find their ways into the business and remain there, even for a long time. An auditor can set the records straight and also educate the business owner on how to effectively manage the accounting process and make sure everything is up to standards for the future of the business.


Auditing Is The Best Strategy For Tracking Your Finance and Making Adjustment

The best way to always track your finance and expenditure is to go by auditing. Auditing will make it possible for business owners to make more effective decisions, and channel their investment appropriately. Any accounting errors would usually be bad for the future of the company. 

Auditing Would also Be Required When You Are Seeking Equity Investors, or Looking For Lenders, Or Before Going On Your IPO or Simply Selling Off Your Business

Auditing is required most times, when you are looking for equity investors for your business— usually after a Series B or a Series C funding stage . In these cases, a lower level self-auditing may not be enough. However, before your business starts making profit, you may still be able to negotiate away from a full audit, even when it has been required. This may not be the case when the company matures. Again, auditing may be required if you are scouting for a lender by way of venture capital, or other types of bank loans. Audits of your business may also be required if you are thinking about selling off your business, finally.

Thinking about going public also?Audit is usually a must. 

Where Traditional Auditing Proves Costly, You Can Carry Out Self-Auditing

Getting a traditional external auditor to do the auditing may be like squeezing life out of your new business. The cost may be shooting through the roof. The best deal is to go the way of self-auditing. This would mean assigning a member of your business to look through the books and find the faults. Of course, nobody expects that this effort would generate information as accurate as that provided by a professional. It would, however, give deep insights about the startup’s finances. In all, although internal auditing may have its own set backs, it could be a good option for startups with very little money to spare.

Moira Vetter, Founder & CEO of Modo Modo Agency, a strategic marketing firm, that was recognized as a 2018 & 2017 Inc. 5000 company and a 2017 Best Places To Work, advises startups to adopt the following simple strategies towards a more effective self-auditing.

Formalize monthly financial statement review with your team — Awareness is the first step to managing budgets frugally. When the person charged with keeping the books closes the books each month, schedule a meeting to sit down and review the financial statement as a group. Ask questions about line items that are going up. Look for line items that are larger than you imagined and ask questions about why.

Review credit card statements as a group for recurring expenses & CUT THEM — For this to be efficient you need the team using the company credit card for all expenses rather than buying things on personal cards and expensing them. This is particularly important for recurring expenses so the group can see how seemingly small monthly items add up. Before you know it, lists of $5 to $25 monthly amounts are a serious monthly expense. My firm recently did such an audit and uncovered an analytics account that we are no longer using. These are the items to ensure you are still using, and take the time to cancel accounts if you’re not using them. Among these hosted items are:

Email Hosting — if you’re growing, the number of people with email accounts can grow quickly and a change in hosting can help optimize expenses. Change your hosting agreement if you need to.

Social Accounts — LinkedIn LNKD +0% and Job promotions, Facebook FB +0% and page boosts, Hootsuite or Buffer distribution services, Follower management apps like Unfollowers. Are you getting a return on these expenditures? If you don’t know, find out before you keep spending blindly.

Web Hosting — How much space and how much functionality do you need from your Web host? Could you be spending less for your website host.

Memberships — some startups belong to business clubs or Regus office locations. It can be a point of pride to invite people to a business club. If you haven’t been more than a couple of times in the last year, see if you can pay as you go versus carrying the cost of memberships you are not using.

Planning for Computer Expenditures — As a part of our year-end audit we assess the current operating condition of our computers and any anticipated expenses. New computers are like going to an office supply store, you want everything you see and all the shiny new stuff is fantastic. The extra step you should take as a startup up is not simply adding new computers, but determining who can use a computer hand me down. People that aren’t power users can use the current system of someone you are buying a new machine for to help maximize your investment.

Staffing Planning & Associated Expenses — If your startup engages recruiters, temporary staffing firms or advertises for a lot of positions, these expenses can add up quickly. Take time to assess all the positions you feel you’ll need. Only advertise when referrals aren’t a good source of candidates. If you have to use temporary staffing, pick a firm that does contingent placement and discounts fees based on the amount you have spent with the to temporarily staff a position.

Meal Expenses — As an early business you may be inclined to treat all the people you know to lunch or drinks on your card. You may also get in the habit of providing lunch on a regular basis for the staff. Remember that only a portion of these expenses can be written off on your taxes and think about when you really should be paying the tab. Food costs a lot, adds up quickly and is NOT an essential business expense.

Office Rental Expenses — Fight the urge to rent class A office space until you’re well along in terms of profitability. If you’re not using your space, consider a non-competitive sub-tenant. You could reduce your costs by hundreds or thousands of dollars a month.

Bottom Line:

Auditing can provide serious lifelines for startups plotting to go far. It starts from the first day to keep your business on focus and on the right track. It gives you deep insights on the errors of the business, including ways through which you lose money and how to move away from them. Even though it can be expensive, it could end up saving the day for startups if it can prevent costly errors.

You can check out a list of auditing firms for small businesses in your country’s business directories. Nigeria |South Africa | Egypt |Kenya

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world

Five Proven Ways To Retain Your Customers

April 28, 2019

You may be wondering why customers or clients are moving away from you in search of your competitors or other substitute products.In fact, according to Bain and Company, it will cost a company 6-7 times more to find a customer than retaining an existing one. A mere 5% increase in customer retention can increase a company’s profitability by 75%. Below, we discuss five proven ways to ensure that your customers always come back,or even bring in more customers.

1. Have Loyalty Programs In Place

While your true customers will do business with you, whether they are rewarded or not, most times customers who are rewarded may go the extra length of doing the real marketing on your behalf. In fact, a 2016 survey done by Facebook found that 77 percent of people say they repeatedly buy from their favorite brands. 40 percent tend to be repeat buyers but would choose another brand that offered a better experience. 37 percent, meanwhile, say they make purchase decisions rooted in their emotions. 

The Case of Dollar Shave Club:

The American Dollar Shave Club’s example is one of cultivating loyalty. The company has built a base of more than 3 million repeat customers in five years by ensuring its members feel like they are valued. After you sign up as a Dollar Shave Club member, you receive a welcome email that explains how to make the most of the service. 

Clothing and shoe ecommerce site Zappos is also well-known for its excellent customer service — including its efforts to show customers how much they care by saying thank you and sending gifts.

Zappos also has an office-wide tally of how many gifts and surprises have been sent to customers during the previous month to make sure the whole team is doing their part to show customers how much they are appreciated.

Referral programs like those in use at Stitch Fix, reward users who refer their friends to the business. These users earn discounts, products, or credits if successful sales are made based on their referral.

In a recent survey, when asked what would make them more satisfied with their purchase, 61 percent of consumers said “a simple thank you.”

Also See: Five Ways Investor Pitch Efforts Are Not Successful For Startups

2. Have A Culture of Excellent Customer Service

Businesses planned for service are apt to succeed. Businesses planned for profit are apt to fail, wrote Nicholas Murray Butler. The market is full of competitors who can offer the same products or services as you do. Customer service is therefore the big difference that sets the players apart. Customers are willing to come back a hundred times to brands that prove to be loyal to them.

Amazon.com as a Case Study:

Amazon.com is an example that customer experience is not only a physical thing alone, but could also be extended to online user experience. Customer experience begins from the website. Describing the customer experience of online market, Executive Editor Rick Ayre said: 

“If you spend a lot of time on the site, I hope you get a sense of the independent, literate voice. And that behind it all, you’re interacting with people, and it’s people who care about you and not people who are trying to sell you these things.”

To stress the importance of excellent customer service, Jeff Bezos took a flight to Boston in 1999, stopping at a construction site, to personally present a set of golf clubs to a construction worker, who the company claimed was the 10-millionth customer.

3. Track and Personalize Each Customer Experience

Tracking and personalizing each customer experience helps you to maintain long-lasting relationships with all your customers.

Businesses now use Customer Relations Management (CRM) tools to make this happen. The software can help you to track every interaction you have with every client. These tools show you every message a customer has sent to you when you view their profiles. CRM software makes it easier for you to see your customer as a person and not just a number.

Lidiane Mocko,a small business CRM coach, advises that:

“If you have a CRM system that supports automation, then you can configure an automated sequence that sends them a request, followed by reminders.”

The effects of personalization can be seen in this research by Econsultancy in which it found that personalization based on purchase history, user preferences and other relevant information typically found in CRM software delivers a high Return On Investment.

4. Send Engaging Emails Or Newsletters to Your Customers

If the number of time a customer makes purchases determines the level of customer retention, then email marketing determines the level of customer engagement and retention.

Emails present an opportunity to build more on the relationship with your customers, especially before and after their initial purchases. Email messaging is so critical that every sent message adds value to your customer’s experience.

The Case of Shopify:

Shopify data from Black Friday Cyber Monday indicated that, compared with other sources, email has the highest conversion rate at 4.29%, followed by search in second. It is clear therefore that email is a channel that converts customers to the company. 

Shopify.com

According to Shopify, one effective strategy is to use follow-up emails.

“ A week after a customer’s first purchase, send them an email that acknowledges and thanks them for buying from. This type of acknowledgement helps customers feel good about their decision to buy from you, and makes your brand more approachable.

You can make this initial email even more impactful by recommending products that complement their initial purchase. Finally, you can even start including customer reviews as well. These endorsements will increase both the value of each recommended product and the customer’s desire to buy.”

5. Widen The Gap Between You and Your Competitors.

This looks like the safest way to retain customers, because in the first place, there is not much competition, and customers have smaller range of products or services to choose from.

The Case of Apple:

If you want your customers to see you as the obvious choice over your competitors, then widen the competition gap so much that the customers would have to take notice of Apple’s strategy, demonstrated by their “Mac vs. PC” ad campaign.

The campaign starring John Hodgman as the inept PC and Justin Long as the cool, collected Mac saw the two humorously quipping over what made the Mac a better choice than a PC in a really entertaining manner.

The “Mac vs. PC” campaign was very tongue-in-cheek — and it generated a lot of dispute. Not only that, it divided the market and set Apple apart from their competitors by identifying the kind of consumers who should buy Apple products.

Bottom Line:

Finding the right marketing strategy is something you may have to give a serious thought because without it, the business is as good as not existing at all.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Five Ways Investor Pitch Efforts Are Not Successful For Startups.

April 26, 2019

Pitching your ideas as a Startup to investors is one of the hardest things to do. David Rose, founder of New York Angels and Gust explained that, “[Each year] roughly 1,500 startups get funded by venture capitalists (investors) in the US, and 50,000 by angel investors. VCs look at around 400 companies for every one in which they invest; angels look at 40.” So this means that of the 400 startups, for example, 399 others get their pitches rejected.

Searching for the right investors and convincing them through your investor pitch can be an intensive experience as a startup. There is no doubt about it. DocSend’s studies reveal that companies needed an average of 40 investor pitches over 12 weeks to close a funding round. Twelve weeks might seem a big deal especially when your startup relies on funding to move to the next level. While being rejected after the investor pitch can be depressing for most startups, the following are the reasons why investor pitch efforts by most startups do not turn out successful.

1. Bad delivery

Eric Ries, a founder of IMVU and an advisor to Kleiner Perkins, and the Author of the Lean Startup says startup investor pitches fail because of bad delivery, and particularly because startup owners answer the wrong questions during pitch events. He advised that:

“I have come to believe that there is a hierarchy of pitches, and that understanding where your pitch falls in this hierarchy can assist in making decisions about what information to highlight. Pitches that sit higher in the hierarchy tend to be more successful, and if you can fit your company into one of those categories, you can get better results or better terms. It’s not always about what is being said; how it’s being said is equally as important. It doesn’t matter that you have a great business model with incredible traction and the ability to scale if you can’t properly convey those qualities in your elevator pitch.” Eric Ries proceeds to advise on the best ways to pitch deals, by answering questions, to avoid bad delivery.

On Printing money. 

Key questions: Are those numbers real? How big is the market? Can your team execute the growth plan?

Most important slide: Valuation ( However, wait for the investor to begin the discussion of valuation and pricing.)

Also See: Business Schools: Flights To Success For Entrepreneurs?

On Micro-scale Results. 

Key questions: Who is the customer, and how do you know? What is the potential market size? What are the business economics? 

Most important slide: Lessons learned. 

Practice your investor pitch. Make sure it is well organized, and that you have done enough research to know who you’re pitching to. If you have been successful in the elevator pitch, and are using the PowerPoint presentation style, you have to present a slide presentation in about 15 minutes, then leave time to answer questions within another 15 minutes

2. Traction Is Not Just Enough

Again, many times, startups get turned down after their investor pitch because they simply have not proven themselves enough. Almost no investor will fund a startup that has not demonstrated some initial success — meaning sales or users. Eric Ries further offers the following set of questions and answers to help your pitch get traction:

On Working Product. 

Key questions: What does the product do? What’s the launch plan? Who’s on the marketing team? 

Most important slide: Live demo.

On Prototype Product. 

Key questions: What will it take to ship a working product? How do you know anyone would want it? Who’s on the engineering team?

Most important slide: Demo (if the product solves an obvious problem), engineering resumes 

On Breakthrough Technology. 

Key questions: Who owns the patents? Can we make a product out of this technology? Are there any good substitutes? 

Most important slide: Barriers to entry.

On All-star Team.

 Key questions: Has the team made money for their investors in the past? Are they domain experts? Are they committed to an idea in their domain of expertise? 

Most important slide: Problem we are trying to solve.

On Good Product Idea. 

Key questions: What kind of risk does this company need to mitigate (technology risk, market risk, team risk, funding risk)? Is it a revolutionary and novel idea? Is this team the one to back? Can the team bring the product to market? Who is the customer? Who is the competition? Will they fail fast?


Most important slide: About the founders.

You may believe in your startup, but investors believe in the numbers behind the startup. Although your funding resources may be small today, investors want to know that you were able to use those limited resources wisely to prove your concept and secure initial customers.

3. You May Be Dealing With The Wrong Investor 

All investors are not the same; the same with their investment strategies. While some firms and angels prefer to invest in startups in the very early stages, others prefer to invest later funding rounds. 

Ryan Westwood Co-Founder and CEO at Simplus, says:

“An investor with millions of dollars to spare usually requires a different level of oversight than an investor who’s dropped his entire life savings into your startup and needs it back in time to pay his kid’s tuition for college next year. It is also helpful to bring on investors who can make follow-up investments as you grow so you don’t convolute your capitalization table with more investors.”

Again, the choice of investment depends on the interest of the particular investor. While some may only invest in tech startups, others may only partner with hardware startups. The bulk of the work would be done by you, however, in finding out the best investors that fit your portfolio. You can also evaluate the investor’s personal business history before pitching the deals.

4. Your Investor Pitch Is Below Standards

Investors are interested in having best returns on their money. They like to put their money into something promising, and the best time to win their enthusiasm is during the initial investor pitch. An exceptional startup investor pitch is unforgettable. Even if an investor heard 50 investor pitches that day, only a few great ones will stand a chance for a deal. The keys to powerful investor pitch that get startups funded include that the investor pitch deck must be:

  • Clear and simple
  • Compelling
  • Easy to act on

Standard slides should contain the following: Problem; Solution; Market; Product; Traction; Team; Competition; Financials; Amount being raised.

According to some researches done by DocSend, potential investors spend on average 3 minutes and 44 seconds per investor pitch deck. The studies in about 200 investor pitch decks were analyzed, investors spent the most amount of time reviewing the contents concerning financials, team, and competition.

5. Very Bad or Inexperienced Team

Having a very a bad or inexperienced team may rub off on your investor pitch efforts. Bad or inexperienced team members may have hard times getting the interests of potential investors.

Your team members need to leave their pride at the door when making an investment presentation and be open to the investors’ suggestions. The fundraising process can be grueling because experienced investors tend to ask numerous questions that are likely to have been posed to your team before. These questions test your business model and technology platform so all parties might realize the best way of structuring an investment.

Rick Frasch, a partner in venture fund KLM Capital Group has this to say:


“Most of the time, these questions are offered in the spirit of openness to justify the investment of such a large sum of money. But rather than viewing the questioning process as an exploration of alternatives by an investor who is obviously interested in the startup (otherwise why else would the investor have met with the entrepreneur in the first place?), some people reactively resist suggestions to consider changes to their business model or technology platform. Such a reaction is likely to cause a thoughtful investor to move on. You should instead take the time to consider the investor’s questions and suggestions, and view the process as useful insight into his or her thinking.”

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Business Schools: Flights To Success For Entrepreneurs?

April 24, 2019

With over 20 business schools in Nigeria alone, and more than 15 in Ghana and nearly 30 registered business schools in South Africa, 3000 in India and indeed 13,000 business schools on Earth, it does appear that business school is becoming quite such a must-do for many. You would ask: but Bill Gates and Mark Zuckerberg never finished colleges not to talk of attending business schools? How about Richard Branson, Dangote or Oprah Winfrey? In fact,there is a staggering three-year low in the number of applications to full-time MBA programs. Critics of business school now use such jokes that MBA — Master of Business Administration — really stands for: “Mediocre But Arrogant”, “Management by Accident”, “More Bad Advice”, “Master Bullshit Artist” among others. Below, we discuss a few points about why we think Business School is or is not a hoax.

Enlarging Your Network

The six degrees of separation means that you are five persons away from meeting the most influential persons in town. You may argue that running a successful business would put you in a vantage point to meet more resourceful acquaintances without attending a business school, but building a successful business may be quicker because of current acquaintances. Jeff Bezos, the world’s richest man, had no extra certifications apart from his 1986 Princeton degree in electrical engineering and computer science, but e-commerce was a business that would require sound knowledge of programming, warehousing, book-keeping and a host of other sophisticated disciplines. There was no way Bezos’s dream of revolutionizing America’s book industry would fully materialize without him first understanding how folks in the American book industry think and work. Just a four-day course session on book-selling at the Benson Hotel, Portland, Oregon took care of that. That four day session would turn out to be one of the most useful study sessions he had ever been to, because he learned new things about customer service in the bookselling business and built a life-changing network of business associates and acquaintances, including top leaders in the highly influential American Book Sellers Association. Although, this is not a good case for attending business schools, it does however appear that meeting the right people in similar industries can go along way. Alumni associations also endure beyond business school days.

A Third Of World’s Best Performing CEOs Have Been To Business Schools.

Don’t get me wrong, the founders of top successful brands in the World: Facebook, Microsoft, Apple, Dangote, did not attend any business school before starting out there companies, yet their brands are some of the most valuable in the world. But here is this report from Harvard Business Review: Only 32 of the 100 top-performing CEOs have an MBA. That is about 32% of the number. So then, you may ask again what happens to the remaining 68% of the number? Definitely, the odds are that you don’t always need an MBA to achieve any significant business success. On the other hand, you don’t have to also go very far down the list to find a CEO with an MBA. Francois-Henri Pinault of Kering is the highest-ranked CEO with an MBA. The HEC alumnus is 4th on the list. Others are Shantanu Narayen (#12) of Adobe Systems; Brad Smith (#16) of Intuit, and Hamid Moghadam (#17) of Prologis; Stanford’s Carlos Brito of Anheuser-Busch InBev; UCLA’s Laurence Fink of Blackrock, Harvard’s Jaime Dimon of JPMorgan Chase; IESE’s Luis Maroto Amadeus IT; Columbia’s Nancy McKinstry of Wolters Kluwer.

Get Paid More Before You Become An Entrepreneur Or In Case Your Startup Fails

Although business schools in America do not represent what happens around the world, they may however give an inkling about the value attached to business schools all around the world. The above picture shows that people who atttended business schools, for instance, at Yale SOM, have 77% percent chance of getting jobs immediately after graduation, and could take home salaries as high as $149, 964 per annum. Again, a 2016 study has shown that graduate business school alumni earn a median base salary of $2.5 million over 20 years post-graduation — $1 million more than if they had not attended business school. However, even this fact is not entirely reliable because how much you are paid sometimes depend on which business school you attended -the one in New Jersey or the other one in Milwaukee- and what companies you are working for. Again, this does not extend to other countries in the world. In Nigeria for instance, the basic salary for managers in one of the big fours is $35,000 per annum. This includes, of course whether there is an MBA certificate or not. Bigger corporations may pay more than that anyway. It is safe to argue therefore that in developing countries, business schools may serve the need to make CVs more attractive. However, while you can still get a better job with it, please do.

Business Schools Concentrate Courses Useful to Running A Successful Business

Unarguably, the idea of a business school is to bring together topics useful for running successful business such as accounting, administration, strategy, economics, entrepreneurship, finance, human resource management, management science, management information systems, international business, logistics, marketing, organizational psychology, organizational behavior, public relations, research methods and real estate among others. While this is perhaps the only business-related discipline that does that, much is still left unsaid about how all of that works in reality. It cannot be denied however that apart from adopting some intensive methods of teaching such as case method or skills-based approach, most business schools also go to the extent of using the business games approach which sometimes lead to the training of players in business skills (hard and/or soft). Consider Matthew Prince and Michelle Zatlyn, alumni of Harvard Business School, who used their five-day immersion trip to Silicon Valley while they were at Havard Business School to fine-tune their vision of starting an internet company, CloudFlare, which is now valued at over a billion dollars.

Most Business Schools Run Business Plan Competitions; You Can Test -Run Your Business Plans or Ideas One More Time

Although good business plans may work whether tested in business plans competitions in all business schools or not, you may have one more time to test whether it can objectively work before starting off your business. All top business schools have a business plan competition. The competitions may offer you the opportunity to get feedback on your startup and to identify any gaps in your business model. In essence, it may be a rehearsal ground of some sorts where you get to practice your business pitch and develop yourself before major pitch events. Most of the times, price money may be won which can go a long way in helping you get your business off the ground.

Most Business School Are After Your Pockets And Give You Nothing

In 2013 alone, top 20 US MBA programmes already charged at least $100,000 (£72,000). London Business School once advertised a tuition fee of £84,500 for its MBA. While most business schools exist to rip you off, some however offer some form of financial support and incentives through loan forgiveness programs. Recently, support is being extended to entrepreneurs who are forfeiting high-paying positions to launch businesses. Harvard Business School’s Loan Reduction Program is one such example. Again, being part of a business school many expose you to different avenues of finance than other entrepreneurs. Some business schools may actually go as far as investing their resources or funds into student ventures or may link you up with venture capitalists, angel investors or business incubator programs. However, these may be true in some jurisdictions, but very false in most. You are left to do the research yourself.

You May Find Co-founders At Business School

This is not the reason you are going to a business school anyway, but there is a probability that you may just find a person who shares in your dreams and business idea. Many entrepreneurs have met their co-founders in their business school classes. In business schools, you are surrounded by other individuals who aspire to become entrepreneurs like you. Business school also presents many opportunities for you to work together on projects with the proposed co-founder before jumping into your venture together. You may learn one more thing about him before joining hands to co-found a business. Matthew Prince and Michelle Zatlyn, alumni of Harvard Business School crystalized their vision to start an internet company, CloudFlare, which is now valued at over a billion dollars while at the Harvard Business School.

Mentorship and guidance. 

You may get mentorship and guidance from the vast array of networks you have. Again, being part of a business school community may also allow you access to some inner circles of networks of successful and experienced entrepreneurs who may volunteer their their time to mentor you. 

Bottom Line

Attending a business school is one thing, but to actually succeed in a business is a combination of factors beyond the parameters of a business school. At the end, you are always left to steer the course of your life. Whether a business school is actually a hoax or not is left for you to decide.

Cahrles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Lifting the Veil Behind Marketing For Startups: Reasons Much of Your Budget Should Go Into Marketing.

Even with limited funds, startups can hardly survive without intense, aggressive marketing. According to a 2018–2019 Gartner Research study, companies are now spending roughly 11% of their annual budget on overall marketing. The study concluded that “The largest companies…those with more than $10 billion in annual revenue — have the largest appetite for digital advertising, averaging 11.6% of the marketing budget,” while those “with annual revenues of $500 million to $1 billion allocated 8.5% of their marketing budget to digital advertising.” Percent of revenue by different industries on marketing include: Education: 18.5%;Consumer services: 10.7%; Transportation: 4.1%; Consumer Packaged Goods: 8.1%; Service Consulting: 3.4%; Tech/Software/Biotech: 9.7%;Communications/Media: 17.8%; Healthcare: 9.5%; Banking/Finance/Insurance: 5.3%;Retail/Wholesale: 4.7%; Energy: 0.5%; Mining/Construction: 1%. With these in mind, here are the reasons where marketing is inevitable for your startups.

Gradually Building a Customer Base

Consistent quality advertising increases consumer loyalty for your product, service or idea. Advertising seeks to maintain the current customer base by reinforcing purchasing behavior with additional information about the benefits of brands. The goal of advertising is to build and reinforce relationships with customers, prospects, retailers and important stakeholders.

Promotion of Your Products or Services

George Felton, author of “Advertising: Concept and Copy’’, believes that without marketing, you have got nothing to offer. Promoting your business could take the shape of flyers, media commercials, billboards or handbills, and the content adheres to the rules of journalism by identifying who, what, when, where and why of your products or services.

You Can Get A Fair Test Of How Your Products or Services Compare with Competitors’

Gerard Tellis, the author of “Effective Advertising: Understanding When, How, and Why Advertising Works,’’ says that marketing offers your target audience the chance to evaluate whether your product or service measures up against your competitors’. Marketing in this area would help you to consider possible areas of improvement on your products or services, and adjust accordingly.

See Also: 6 Reasons Every Startup Must Read Daily

You Get A Chance To Know How Effective Your Pricing Strategy Is.

With marketing, you get to expose your goods and their prices to the public. Marketing lets you know what your competitors are doing, when the next sale is, and how you can receive the latest pay which is the best value for your money.

Marketing Is All About Generating Leads For Startups

The demand generated by advertising, public relations, and sales promotion “pulls” the goods or services through channels of distribution, notes “Reference for Business.” One of the powerful functions of marketing is to arouse consumers to demand specific products, services and ideas through ad campaigns that target the audiences that are most likely to buy them.” Products, services and concepts are sold in volume, if consumers actually need them.

Brand Building 

With good marketing you build brands and develop goodwill with time. But that is never really going to happen if brand identity is not communicated to the public via advertising. Consistent, result-oriented marketing builds on your brand identity and develops good or bad will for you with time.

You Offer One More New Trend

Previewing new trends is a technique employed by advertisers that capitalizes on consumers’ desires to “keep up with the Jones” by owning the latest and greatest product, service or idea. Yours may be the next trend in town, who knows?

Customer Awareness

The more people know your products, the better. With targeted marketing, you can raise the awareness of your customers at target demographics about issues they may be ignorant about. The health industry is often a case in point. Billboards are everywhere about flu and disease outbreak.

Charles Rapulu Udoh

Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

6 Reasons Every Startup Must Read Daily

April 23, 2019

Startups are newly founded companies that are just beginning to develop, just as toddlers need six classes of food to develop strong immune systems so do startups with reading as one of the nutrients required for their necessary growth.

Reading is always attributed to students and academia but rarely attributed to startups. Reading is referred to as one of the basic tools of success in life because it increases your confidence and makes you fit for the tasks ahead. An average startup needs to read at least once a week to survive challenges of life.

The importance of reading cannot be overemphasized especially for the
growth of startups; reading gives startups the wings to fly and necessary techniques to have a soft landing.

An average startup needs to read at least once a week to survive challenges of life.

Often, as easy as reading sounds, it is one of the most difficult tasks to carry out but it becomes quite easy when the reasons for reading are valid and the reasons include:

  1. Constant learning
  2. New Ideas
  3. Business Skills
  4. Global Competition
  5. Inspiration and Motivation
  6. Building Relationships

Constant Learning

Learning is a daily activity that can be achieved through reading. Reading frequently enables startups to learn how to solve problems and think critically in the most dynamic way. Learning via reading helps startups to learn from the experience of others most especially experiences from businesses which have grown from being startups to successful business empires. Reading gives startups blueprints of businesses they aspire to go into.

New Ideas

Reading helps to connect more ideas on what you already know to some ideas on your mind to give birth (bring to reality) new products or services. Reading helps to validate most ideas of startups; many ideas startups develop aside from some original seed ideas give startups abilities to climb the ladder of success and growth speedily. 

Business Skills

The ability for startups to open their gates to business is good; the acquiring of business skills and improvement of previous business skills are more important and they can mostly be gotten through reading. The acquisition of these skills increase the longevity of startups.

Global Competition

Given that startups start operating from their local markets, most startups have the vision to operate in the global market and become global competitors.

Startups can do investigations about the feasibility of conquering a foreign market without going over themselves.  

Inspiration and Motivation

Starting and running startups daily is not a walk in the park. The trials, difficulties, and mistakes a startup goes through are huge; only a startup that reads daily can overcome.

Reading gives you an insight into what other startups went through and what they are still going through. It inspires startups to wield through the storm and motivates them to do exploits even with their present challenges.

Building Relationships

 Hard work, dedication and long hours are good traits in startups but the ability for startups to build and sustain relationships with different human resources that contribute positively to them is key for the survival of any business and this can be achieved through reading.

Reading is wealth. No doubt, different challenges of business could be solved through reading. Constant reading keeps startups steps away from liquidation.

See also: 7 Reasons Africa Is A Fertile Ground For Startups
Chisom Okeke

Chisom Okeke, popularly known as “Somly” is a graduate of Accounting from the University of Benin, Benin City. She is a phenomenal writer and an “Agripreneur” whose focus is to change the narrative of the agricultural sector by providing timely agricultural information and opportunities available in the agricultural sector. She is also a virtual assistant and the anchor of Somly Writes. You can connect with her via Social Media, Facebook – Okeke Chisom; Instagram – okeke_somly; Twitter – somly

These Businesses Are Currently Free From Tax In Nigeria

April 22, 2019


You can’t consider the heavy job of having to fulfill numerous tax and levy obligations within the first year of being in business, at the same time struggling to raise more capital or manage the fast depleting funds within your disposal. Nigerian government has a lot of tax incentives, one of which is the incentive of Pioneer Status to help you reduce the burden of the first few years of being in business. The incentive of Pioneer Status is a tax strategy used by government across the world to encourage investments in industries that were either non-existent at all, or the country did not have sufficient presence for its economic development.

The Nigerian federal government has expanded the range of industries that would benefit from the Pioneer Status tax incentive under the Nigerian Industrial Revolution Plan, NIRP, and the Economic Recovery and Growth Plan, ERGP, by promoting the 27 industries and products in the approved status document.


The pioneer status applies to companies or startups in their first year of business or operations. Consequently, companies or businesses older than a year would not benefit from the pioneer status incentive. Again, businesses that have existed for several years in a particular sector may not enjoy the pioneer status, except such companies or startups branch into a new line of business covered under the list of 27 or more new industries and products.

Clearly, established companies such as Payporte, Konga or Jumia who are already leaders in the e-commerce business sector as well as those in the music industry would not enjoy tax exemption by the government under the new regime.

The Industries Covered By The Regime Include:

Agriculture:

Startups or new businesses under Nigerian agricultural sector, who are within the first one year of their business can get tax break for a period of three years or more. The areas covered under the agricultural sector include:

  • Processing and preservation of meat and poultry
  • Production of meat/poultry products
  • Processing of cocoa
  • Marine and Freshwater fishing and aquaculture.
  • Growing of all crops.

Manufacturing:

This is where Nigeria hopes to diversify its oil-dependent economy to. Areas covered under the manufacturing sector include:

  • Manufacture of starches and starch products
  • Manufacture of animal feeds
  • Tanning and dressing of leather
  • Manufacture of leather footwear, luggage and handbags
  • Manufacture of household and personal hygiene paper products, like tissue papers etc.
  • Manufacture of paints, vanishes and printing ink.
  • Manufacture of plastic products (builders’ plastic ware) and moulds
  • Manufacture of batteries and accumulators
  • Manufacture of steam generators
  • Manufacture of railway locomotives, wagons and rolling stock
  • Manufacture of metal-forming machinery and machine tools
  • Manufacture of machinery for metallurgy
  • Manufacture of machinery for food and beverage processing
  • Manufacture of machinery for textile, apparel and leather production;
  • Manufacture of machinery for paper paperboard production.
  • Manufacture of plastics and rubber machinery

Information Technology And Communication:

  • E-commerce services
  • Software development and publishing
  • Publishing of Books.
  • Telecommunication apart from GSM telecommunication

Entertainment:

  • Motion picture, video and television programme production, distribution, exhibition and photography;
  • Music production, publishing and distribution, such as Record Labels etc.

Environment:

Waste treatment, disposal and material recovery, such as recycling.

Also check: Practical Guides On How You Can Register A Business Name In Nigeria Yourself

Real Estate:

  • Real estate investment vehicles under the Investments and Securities Act, such as Real Estate Investment Trusts,REICs etc.
  • Construction and operation of non-residential buildings (Shopping malls, hotels;Office buildings; building for industrial production;warehouses; low and middle-income housing estates of single and multi-family buildings,etc)

Business :

  • Business Process Outsourcing 

Securities: 

  • Mortgage backed securities under the Investments and Securities Act

Mining:

  • Mining and processing of coal

Construction:

  • Construction and operation of water projects
  • Construction and operation of roads, railways and airports
  • Electric power generation,transmission and distribution, among other.
  • Construction of utilities generally.

Steps To Take To Obtain Pioneer Status Certification:

  1. Make sure you apply within the first one year of doing business and that you fall within the categories described above.
  3. Get your documents ready. Documents in this case include financial statements, certificate of incorporation and other incorporation forms, project documents such as Land Documents, Building drawings, Construction agreements, trademark certificate, title documents and invoices of assets of the company, Tax Identification Number, Tax Clearance Certificate, Bill of quantities and any other document pertaining to your projects.
  4.  Choose a date to make presentation to the Nigerian Investment Promotion Commission about your project. Furnish the Commission about your company as well as your financial statements.
  5. Once presentation of your project has been made to the Commission, and NIPC is satisfied, you would then be requested to make payment of the application and due diligence fees. Make payment to the Commission.
  6. At this stage, you would now make application to the Commission, attaching both the soft and hard copies of the relevant supporting documents. NIPC will review your application and conduct intense legal and compliance checks on your project, after which it fixes a date for a verification visit to your facility.
  7. At this stage, once the NIPC declares your application successful, you will then be requested to make payment of the service charge. NIPC, thereafter, issues you with an Approval In Principle (AIP) once payment has been made, which you may collect in person, or have sent to you by courier. A copy of the AIP is forwarded by the Commission to the tax office and the Industrial Inspectorate Division.
  8. The next stage is to complete an application form for Production Day Certificate (PDC) and submit same to the Industrial Inspectorate Division (IID) under the Federal Ministry of Trade and Investment alongside the soft and the hard copies of the necessary documents. IID will review the application and schedule an inspection visit to the site of the project for the purpose of determining the production day of the project.
  9. Satisfied, the IID will send you a mail to that effect,as well as a copy of the Production Day Certificate, at the same time notifying the NIPC.
  10. Once notified, the NIPC will issue you a Pioneer Status Incentive Certificate and send copies of the PSI Certificate to both the tax office (FIRS) and the IID 
  11. The whole process takes a minimum period of 25 weeks (approximately 6 months) to be completed.
  12. You may however get yourself a tax consultant or a lawyer who does the work for you while you run your business.
Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Practical Guides On How You Can Register A Business Name In Nigeria Yourself


Between June 2016 and July 2017, Nigerian Corporate Affairs Commission (CAC) registered about 91,609 business names. While basic legal advice may be sought on the best form of business to register in Nigeria –whether as a company, business names, incorporated trustees or otherwise– here are quick practical guides on how you can register your business name in Nigeria without seeking for any assistance.

Step 1

Go to the CAC Portal and Sign Up:

On the CAC Portal (you may click here), sign up by creating an account. There are two types of account: ordinary accounts, which is accessible to everybody or accounts for accredited agents (accredited agents are professionals who are accredited to register business names and other categories of business on behalf of the Commission). Open an ordinary account or account for an accredited agent as the case may be. 

  • Now here is the danger: type in your name correctly, in the order you would want it to appear officially if you are an ordinary account holder. Make sure you are not entering the wrong name or another person’s name, who is not the owner of the business name. Doing so would mean that the name would automatically appear as the owner of the business on the registration forms. 

STEP 2:

Once You Are Logged On To The Portal, Choose and Reserve a Name.

This stage begins with reserving your business name and one other alternative name. Alternative names are necessary in case your preferred name is returned unavailable by the CAC. Once the CAC conducts a search in its database to ensure that the name is not already in use or that there is no similar name already in use and returns the name as approved, the approved name would be available for a 60-day period, at the end of which it expires and returns to the CAC database. Nothing prevents the name from being reserved by another person and registered by him unless you reserve the name again after paying a search fee to the Commission. Once the name has been reserved, you must begin the registration of your business name within the sixty days reservation period. The name search usually takes up to one hour or more.

NB: All payments to the Commission are made online; however any tax obligation is to be assessed at the tax office. 

Step 2

Fill In the Business Name Registration Forms Correctly

Still on the same online portal, click on ‘New Registration’, which could be accessed from the ‘Company Registration’ Button. Then enter the ‘Availability Code’, which is usually an 11 digit number found by clicking and opening the ‘Approval Note’ opposite the new business name you have reserved. Once a fresh page shows up, begin immediately the process of filling in the online forms. Make sure that all the bits of information you provide are clear enough and are accurate. To avoid queries on your registration, do not enter fictitious or unbelievable details or address. The information required to be completed includes:

  • Approved Name of the Business
  • General Nature of the Business
  • Address of the Business
  • Name, Address, Occupation and other details of the Proprietor(s) of the Business
  • Signature of the Proprietors

Step 3

Once the Forms Having Been Correctly Filled, Proceed To Payment By Clicking on The Payment Button

Payment: The payment of all the fees may be made online or completed at a bank branch. Where the payment is made at a bank branch, make sure you generate a Remita Code with which you would confirm payment of the fees once you get home and log back to your CAC account. 

Step 4

Submit Your Correctly Filled Forms Online

Once the payment has been approved, the filled documents would now be available for download. Once downloaded, handle with care and avoid any stain on the documents. Affix your passport photographs on the relevant places and append your clear signatures on the signature brackets. Notarise the documents before a Notary Public or a Commissioner for Oaths. Once you are sure that all the needful has been done, scan the documents and upload them here. On the new platform, enter the Availability Code of the business name and the branch office of the CAC where you would want to pick the Certified Trues Copies of the documents up from. Scroll down, choose from a range of documents you would want to upload and upload all the documents. Once you’re done, click on submit. Once the process is marked ‘documents submitted successfully’, then you’re done with whole the registration process. Within 5 working days, CAC either approves or returns queries on the application you submitted. Where queries are returned, treat them accordingly. Where approved, the CAC would notify you that the application has been approved. At this point, your Business Name Certificate is now ready for collection.

Step 5:

Collection of Certificate and Certified True Copies of Other Registration Documents.

Once approved, pick up all the documents you scanned and your ID card and proceed to the branch office of the CAC where you registered to pick the documents up from. No payment is made to collect the documents at the CAC office.

Related: Best Ways To Carry Out Market Research As A Startup

The registration process may last longer than 5 working days depending on the workload of the CAC at the time and the number of queries that were returned on your application for registration.

DISCLAIMER:

This advice does not displace the sound legal advice you may get from your legal counsel. Your legal counsel may offer you good advice on what type of business best suits your dreams and aspiration and which may prevent any legal issues, arising from the composition of your business or otherwise, in the future.

Good luck on your new journey!

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Best Ways To Carry Out Market Research As A Startup

April 20, 2019

Without aggressive research and market survey efforts before starting your business, you may be wading through unclear waters. Jeff Bezos’ confidence in succeeding came from a little research on internet business possibilities at D.E Shaw & Co. The research showed that web usage was growing at a staggering rate of 2,300 percent a year, as result of the growing availability of Internet browsers then.

According to Jeff, something that is growing 2,300 percent a year ‘is invisible today and ubiquitous tomorrow.’ He was further surprised that of all products that could be sold on the Web (including computer softwares, office supplies, clothing and apparel, music, among other 20 possibilities), books moved from being the bottom of the list to the very top, with music following in second place. Books stayed because of their wide availability, logistics and a host of other factors. Without such research, Amazon.com would not have found its mission, and would probably have been strangulated by stiff competitions in the long-run. It was able to innovate because it knew all along where it was going to. Here are a few things to note about the best ways to carry your market research as a startup.

Research Your Industry and Obtain Key Market data

  • Choose your specific industry, mining, sales, retailing, ecommerce
  • Carry out extensive market research yourself or through a professional. Sometimes, the use of trained professional researchers is recommended since they are often skilled and know all the techniques of research that would adequately cover all the fields of your research. They can also explain the collated data to you, in ways that are both dispassionate and objective.
  • Deplore the Internet Use the Internet to search for already collated data in your industry within your locality. You may consider using the following tricks. Enter words on search engines, such as, “X market size pdf”; “X market outlook pdf”; or “X market trends pdf”. Using ‘pdf’ allows you to gain useful industry knowledge, insights and reports. This may be useful but most times may not remotely represent your needs.

Research And Study Your Market Segments, Customers or Clients Purchasing Patterns or Psychology.

  • At this stage, you are a bit closer to what you are looking for. Industries target this method because most times, it accurately captures their interests.
  • This would also help you gain clearer insights about the purchasing pattern of your customers.
  • There are so many research firms that may help you do this more precisely. Where you can’t afford any, you can resort to already published reports online.
  • Research companies such NPD Group or Nielsen sometimes publishes periodic survey data online.
  • To research online, simply type in keywords like “survey”, year “2018”, “pdf”, customer info “small business owners”.
Research About  Your Competitors
  • There persons or companies that are already in business like you. Most of them have assumed comfortable market shares.
  • Turning blind eyes to your competitors could be very deadly because they would often give you a clearer view about the nature of the market you are going into, the concentration of competitors in your locality and the type of services or products they produce.
  • Here, you need to find more about your competitors’ market share, including their marketing and pricing strategies.
  • The best and the easiest ways to do so would be research online.
  • You can Google your competitors online. Try using keywords such as: market shares, market players, market leaders, industry leaders, market share, revenue statistics, loss statistics, why company x succeeds more company x vs company x.
  • You may obtain data from the Stock Exchange or any trading point, especially if the company is a public company because it has much of its data in the public domain.
  • To find more information about the revenue of companies on Google, you can use Yahoo Finance or other platforms especially if the company is a public company. Use the Company’s symbol or logo to conduct the search.
  • Where the company is not a public company but a big one, you can Go to Google and search for “Company X revenues”, “Company X annual revenue”. Or search for “X market companies’ revenue streams”.
  • For medium or small sized business, you may use Hoovers. However, you can use this name if you know the real name of the companies. You can find the registered names at the foot of their companies’ websites, if they have.  Companies usually go by such names as XYZ LLC , or XYY LTD. When this is not possible, you can try and find out who owns the website. You can proceed with Hoovers after you have obtained the name.
Research about Competitor Market Share
  • You can calculate market shares if you find top 100 companies on this market and its revenues. Most times, information about market shares is not always available or satisfactory.
Related: 5 Best Ways Any Startup Can Use To Attract Investors
Competitor Pricing Research
  • Information about pricing can always be found on the companies’ website.
  • You can try out on a few consumer websites where they are not available. Consumer websites such as https://www.toptenreviews.com/ include pricing for each product they compare. For software company pricing use https://www.capterra.com.
  • You may also rely on groups or the social media to solicit for different pricing from consumers in your industry.
Competitor Marketing Strategy Research
  • You can find information on case studies and articles in the media as sometimes founders share their marketing secrets.
  • You can also collate data by attending events or shareholders’ meeting of competitor companies and asking a few insiders.
Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Discover 5 Obvious Reasons Startups Fail In Africa

April 19, 2019

The rate at which startups are built in Africa is amazing, especially startups that are innovative or startups that meet a dire need. In recent times, Africa has been blessed with great startups, most of which are successful and have created lots of opportunities not only for its population but also added to the economic growth of the continent.

Some successful startups which are making waves and waxing stronger daily include Jumia, Dropfi, Saya, Ushahidi amongst a host of others.

Just as startups spring up daily, the rate at which they disappear from the face of the earth is quite alarming. According to Statistics brain, 25% of startups fail after the first year, 36% fail after the second year, 44% fail after the third year while 78% of startups disappear after year 10.

One may begin to wonder the reasons startups fail so that other startups can avoid them in order to exist longer than the tenth year. Every startup that fails has a different reason why it went under but there are major reasons why startups keep failing and they include:

. Product

.Planning

.Marketing

.Followup capital

.Money

Product

The idea or a physical product of a startup is one factor that keeps entrepreneurs highly optimistic and enthusiastic, so much that they fail to do the needful concerning their proposed product. Granted that this product has passed all theoretical tests but what about realistic tests?


Often times, startups develop products for themselves instead of the market.

Most startups fail to do a thorough market survey about a potential product. They fail to check if the product is friendly if the market is ready for this product, they also fail to take into cognizance the voice of their potential customers and go ahead to launch products that are not ready.

Planning

The planning of a business can be seen as the organizing or designing of a business framework in other to achieve great success and this includes the setting of goals, schedules, task, and objectives.
A startup without detailed planning is qualified as a failed candidate. For a startup to succeed, the appropriate structure needs to be put in place.

In Africa, some entrepreneurs start up a business with the idea of employing staffs and checking the books at a given time.
Knowing when to cut your losses and reroute your efforts is highly important and it can only be done when adequate planning has been made.

Marketing

Most startups bask in the euphoria of the awesomeness of their product that they fail to do adequate marketing of their product/services expecting the market to grant them a soft landing.
Marketing in the life of startups cannot be overemphasized and the earlier startups come to terms with it the better for them. No matter how old a startup is, marketing is needed to remind your customers of the importance of using your products/services.

Follow-on funding

Follow-on funds are funds that are used at the later stage of a business or company. Startups make provision for seed funds but fail to make provision for follow-on funds.
Many startups need continual financing for periods longer than they predicted as the rate of launching out is done at a loss and funds are needed to cover the operating cost of the startup to prevent going under.

Money

One of the cogent reasons for the failure of startups is money. Most entrepreneurs are so comfortable with their new status that they relax and go overboard with expenses forgetting that a startup is one that needs a constant influx of money.
They tend to employ staffs that are not needed, rent a bigger space and live a life worthy of a CEO.

Gary Vaynerchuk explained in his book of how he spent money that was important in solving his needs and never thought of acquiring the latest car model even when his business was raking in millions of Dollars, he never saw himself as a millionaire and this is the kind of attitude that most African entrepreneurs should emulate.

As much as we try to be optimistic in our daily dealings especially when starting out in business, the success of a startup rests on the shoulders of knowledge of what will and what will not seek the ship of a startup.

Related: 7 Reasons Africa Is A Fertile Ground For Startups

How To Invest In Startups And Make Gains

Okeke Chisom

Chisom Okeke, popularly known as “Somly” is a graduate of Accounting from the University of Benin, Benin City. She is a phenomenal writer and an “Agripreneur” whose focus is to change the narrative of the agricultural sector by providing timely agricultural information and opportunities available in the agricultural sector. She is also a virtual assistant and the anchor of Somly Writes. You can connect with her via Social Media, Facebook – Okeke Chisom; Instagram – okeke_somly; Twitter – somly

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