There are safe and risk free ways to make extra cash from that money sitting in your bank account. Fixed deposits (FD) and Nigerian treasury bills (NTBs) are two good options to consider.
While the banks are trying to reduce the interests customers are supposed to earn using savings account with every possible medium by deducting for almost any account activity like email alerts, sms alerts, atm withdrawal, account maintenance and many more. You can opt into FD or NTBs and get a higher return over three times the interest that a regular savings account would give you if only you can keep the money intact in your account for a minimum of 90 days(3months) for NTBs or 30 days(1month) for FD.
Find details of Fixed Deposits and Nigerian Treasury Bills below if you decide to go for either of them.
FIXED DEPOSITS
Fixed deposits are shot term investments, usually for a 30, 60, 90, 180, or 365 day period.
Facts & Features of Fixed Deposits:
Interest on fixed deposits are subject to 10% withholding tax which is credited to the government.
In most Banks, if you are terminating the investment before maturity, on your accrued interest, a 20% penal charge is applied.
The bigger the amount and the longer the investment period should most likely earn one a more juicy rate, but irrespective of that, in most banks, 99% of the time, the banker you are interfacing with will never offer you the highest interest rate. Thus, your negotiating skill & ability matters, as well as your willingness to move your money to the next bank.
Unlike NTBs interest which is paid upfront, interest on fixed deposit are paid only at maturity.
In most banks, you can start fixed deposit investment with N100,000. In some other banks, it is lower.
While filling the fixes deposit request form, at maturity, you can chose to rollover principal only, rollover principal + interest or have both principal + interest credited back to your account.
Fixed deposit investment are risk free investment.

NIGERIAN TREASURY BILLS (NTBs)
Nigerian Treasury Bills are also short term investment but in government instruments. They are usually placed for either a 91 day period, 182 days or 364 days.
Facts & Features of NTBs, by Creditful:
Interest rates on NTBs are always higher than what any Bank would offer you on Fixed Deposit. Especially your NTBs investment is for a 364 day period.
Your negotiating skill is not needed as the determined rate on the auction date between the concerned parties (the CBN, Commercial Banks, investment houses, etc) applies to everyone’s investment irrespective of the bank or investment house through which the investment was placed. Thus, if on the auction date the bills for 91 days are offered at 12% per annum, across all banks & investment houses, 12 will apply.
Interest is paid up-front. For instance if you are investing #100,000 @ 12 per annum for 91 days, the interest figure, in this case which is about #2,991.78 will be credited to you immediately while only your principal will be returned at maturity.
NTBs interest is subject to N100 as handling charge & 0.25% commission both in favour of the processing bank or investment house.
While placing the investment, one can choose to rollover both principal + interest, principal only or have the principal returned to his/ her account at maturity.
One who wishes to terminate at maturity can also do so through the bank or the investment house where the investment was placed. The process is not hitch free and can be time consuming.
NTBs investments are absolutely risk free investments, and are the best forms of investment recommended for those who are risk conscious.

COMPANIES INCOME TAX
Under the Companies Income Tax Act (“CITA”), Cap C21, LFN 2004, (as amended by the Companies Income Tax Amendment Act No. 11 of 2007), a tax at the rate of thirty percent (30%) is imposed on the income of a company incorporated in Nigeria, after the deduction of all allowable expenses, losses and capital allowances.
Every company assessable to tax under the CITA must prepare and file on a self- assessment basis, with the FIRS, audited accounts and income tax computations within 6 months after the end of the accounting period. However, in the case of new companies, the returns are to be filed within 18 months, from the date of incorporation, or 6 months after its first accounting period, whichever occurs first.
EDUCATION TAX
Pursuant to the Education Tax Act Cap E4 LFN 2004, every company incorporated in
Nigeria is obliged to pay 2% of its assessable profit as Education Tax.
INDUSTRIAL TRAINING FUND (ITF)
The Industrial Training Fund Act CAP I9, LFN 2004 (the “IDTF Act”) (as amended by the Industrial Training Fund Amendment Act, 2011) establishes the Industrial Training Fund (the “Fund”). The purpose of the Fund is to promote the acquisition of relevant skills in industry or commerce with a view to generating a pool of indigenous manpower to satisfy the needs of the economy. Every employer that is liable under the ITF Act must contribute one (1) percent of the amount of its annual payroll to the Fund. Employers that are liable to make contributions under the Fund are:
Employers having five (5) or more employees in their establishment;
Employers who have less than five (5) employees but having a turnover of fifty N50 million and above per annum;
Suppliers, Contractors or Consultants who bid for contracts from any federal government agency or parastatals or private companies; and
Companies operating in the free trade zone which seeks for approval for Expatriate Quota or makes use of any custom services.
In the determination of the contributions to be made to the Fund, all employees including those who work part time and temporary employees are included in the assessment. Further, all the allowances and entitlements paid to such employees within or outside Nigeria are calculated when considering the total payroll of an employer.
The IDTF Act further imposes a duty on employers to provide training for their indigenous staff with a view to improving their job related skills. Furthermore, the IDTF Act provides that the Fund’s Council may make a refund of up to 50% of the amount paid by an employer where it is satisfied that its training program is adequate.
Failure to make contributions within the stipulated period in a calendar year attracts a penalty of five per cent (5%) of the amount unpaid for each month or part of a month after the date on which payments should have been made.
INFORMATION TECHNOLOGY TAX
Pursuant to the National Information Technology Development Agency Act No. 31 of 2007 a tax of 1% of profits before tax is chargeable on the income of the underlisted companies with a turnover of N100 million and above:
GSM service providers and all telecommunications companies;
Cyber companies and internet providers;
Pension managers and pension related companies;
Banks and other financial institutions, and
Insurance companies.
PERSONAL INCOME TAX
The income of employees is subject to tax levied at progressive rates as detailed in the table below. The Personal Income Tax Act (“PITA”) Cap P8, LFN 2004 establishes a Pay-As-You-Earn (PAYE) system whereby employers are required to act as agents of the tax authorities for the purpose of collecting and remitting taxes on salaries due to their employees. PAYE taxes are required to be remitted within fourteen (14) days after the month of deduction. At the end of every year, the employer is required to submit all the tax deduction cards and employer’s remittance card (Form G).
First N300,000
7%
Next N300,000
11%
Next N500,000
15%
Next N500,000
19%
Next N1,600,000
21%
Above N3,200,000
24%
The summary of the tax deducted from each employee would be shown on the employer’s annual Declaration Form (Form H1) and submitted to the tax authority. This should be done on or before January 30 of the following year.
WITHHOLDING TAX
The Nigerian tax laws (CITA and PITA) provide that where any payment on which withholding tax should be deducted is due from one person to another, the person making the payment is expected to deduct tax at the applicable rate and remit the tax deducted to the relevant tax authority within a reasonable period, not later than 30 days after deduction. Some of the activities and services on which withholding taxes are deductible and the current applicable rates are as follows:
Transactions
Companies
Individuals
Dividend, interest & rent
10%
10%
Royalties
10%
5%
Hire of equipment, motor vehicles, plants, and machinery
10%
10%
Commission, consultancy, technical and management fees, legal fees, audit fees, and other professional fees
10%
5%
Construction
5%
5%
All types of contracts and agency arrangements, other than sales in the ordinary course of business
5%
5%
Directors’ fees
N/A
10%
The rate of withholding tax on dividend, interest and royalty is reduced to 7.5% when paid to a recipient resident in a country with which Nigeria has a double taxation treaty.
CAPITAL GAINS TAX
Capital gains tax is levied on capital gains accruing to a taxable person upon disposal of assets, irrespective of whether the asset is situated in Nigeria or not. The tax is applicable to all companies, including pioneer companies and all individuals and non- corporate bodies. The rate of tax is currently 10%.
The information contained here is based on relevant Nigerian laws, regulations and practices applicable to doing business in Nigeria, as of November 14 2018. This Manual only highlights legal issues, in general, and is not exhaustive. Also it does not, and it is not intended to, constitute legal advice and or opinion. If you have questions or require advice in respect of matters contained herein or any other specific issues, kindly contact us for such advice and we would be happy to assist you on an individual basis and walk with you on your journey to explore the limitless opportunities for investments in Nigeria.
AceConsulting does not accept liability for any action (or lack thereof) by you or anyone else as a result of reliance on, or any other use of, information contained herein. For the avoidance of doubt, under no circumstance shall AceConsulting be liable for any consequences resulting from reliance on or use of information contained in this Manual.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For some business owners, it is a nightmare scenario: You were counting on getting that small business loan, but the bank said no. What do you do next?
That depends on exactly why your loan application was rejected! Step one: find out the reason for the denial. Some bankers will be more specific while others won’t share details, but by law, banks must mail you a notice explaining the reason/reasons why your loan application was denied, according to fundbox.com.
If this has happened to you recently, you might be quite discouraged right about now. Don’t feel down! It happens to many successful owners, sometimes more than once. Understanding the reasons why is the first step to a successful future financing application.
Here are some of the most common reasons for a business loan rejection.
Your credit score
One of the most common reasons for loan rejection is if the lender deems your credit score to be “too low.” The magic score number will differ depending on the lender and situation. Your personal credit score does factor into a small business loan, even if your company has been in business for a while. If you can’t manage your personal credit, the logic goes, how reliable will you be when it comes to paying back a business loan?
If a low credit score is the reason you are turned down, review your score and take steps to repair it. It is a good idea to brush up on what goes in to your personal and business credit score, too, so you understand how you are being evaluated. If you have a successful business, but had to damage your personal credit to build it, you are not alone. Take heart: there are more options out there for you than ever before.
Not enough time in business
If your business is relatively new, you may not have built up enough of a business credit history to qualify for a small business loan. Note that vendors don’t always report your payments to the business credit agencies automatically. Whenever you set up an account with a new supplier or other vendor, make sure they report your payments so your business can build up a good credit history.
Of course, it is possible to have a very successful business and solid financials, even if you have not been operating very long—you just need to find the right lender for your situation. Some lenders require much more time in business than others, so take a look at your options when deciding where to apply for business credit.
Your industry is risky
Some industries are simply considered risky by traditional lenders. Restaurants are a good example because they have a high failure rate. If your business operates in certain vice industries, such as gambling, you may also face extra hurdles to getting a loan. If this is why you were rejected, investigate lenders who specialise in your industry—they are out there.
You don’t have enough collateral
Many traditional lenders require you put down collateral in order to obtain a business loan. If you don’t have enough collateral or lack the right type of collateral, you may get turned down. If this is your situation, look for alternative sources of financing such as unsecured loans.
Your debt utilisation is too high (or not high enough)
Typically, lenders want you to be using no more than 30 per cent of the total credit available to you. If you use too much, many lenders consider you to be overextended, and worry that you won’t be able to pay them back. For example, if you have a N100,000 line of credit, but have already used N90,000 of that line, you are considered a higher risk.
On the other hand, if you don’t have any debt, or lack a history of using credit responsibly, that can count against you, too. Make sure to keep track of your total credit limits, including business credit cards, personal credit cards, lines of credit, and other credit sources, and maintain a reasonable debt usage.
Not enough evidence of strong cash flow
Cash flow is one of the first things lenders look at when deciding whether to approve a small business loan. They want to know that you have enough cash flow to not only cover your business expenses, but also pay back the loan and still have a cushion. If your cash flow is spotty, or you regularly experience seasonal slumps, that can be a red flag.
Poor cash flow is a major cause of business failure, so if this is why your loan application was rejected, you might need to examine your cash management skills. Use accounting software that enables you to easily generate cash flow reports and projections; then, monitor your cash flow weekly to stay on top of it. Be diligent about collecting payments due from customers—don’t let invoices drag out to 60, 90, or 120 days past due.
You are not asking for enough money
It sounds counter-intuitive, but often, the more money you ask for, the more likely you are to obtain a bank loan. For banks, the cost of servicing small loans (under N100,000) is just not worth it, which is why you generally can’t get business loans for small amounts of money from a major bank.
Review your financial projections and business plan to make sure you are not underestimating the amount of capital you need. Perhaps you can apply again and ask for a larger sum. If you don’t need more than you already asked for, look for an alternative financing source, such as a micro-lender or invoice-based financing option that can make smaller loans. Consider options beyond loans, too, if you need funding but don’t need a large lump sum, like a small business line of credit.
Incomplete application/paperwork
Sadly, one of the most common reasons small business loan applications are denied is that the applicant did not complete the application correctly or did not provide all the necessary backup information. It is hard to blame you if this is the reason you were denied: business owners often spend 20, 30, or even more hours on a loan application!
Among the supporting documents most banks will ask for are a business plan, three to five years of business and personal tax returns, business bank account statements, financial statement/projections for the business, and your personal and business credit reports. They may also want to see legal documents related to your business such as contracts, leases, licenses, permits, and corporate documents. The fix for this problem is easy: Get your paperwork in order before applying again.
Getting rejected for a business loan when you need financing is one of the worst feelings ever. Remember, though, it is not personal, and you can try again. After you get past the initial frustration, though, it can be a learning experience, and prepare you for success next time.

What is PAYE?
You know those little deductions you see in your payslip, when you receive your salary, if you look closely, you will find that one of such deductions is the PAYE. For some of you, you have probably wondered, “What is PAYE?” Pay As You Earn (PAYE) is a form of tax deducted by an employer from the employee’s salaries and wages. This tax deduction is also known as Personal Income Tax, and is made based on the provisions of Section 81 of the Personal Income Tax Act (PITA) . PITA applies to every income that is received by an individual.
Remitting PAYE
Employers must begin deducting tax from the salaries and wages of their employees after 6 months of the company commencing business operations. The deducted taxes are remitted to the Lagos State Internal Revenue Service (LIRS), which is the tax regulatory body for Lagos State through any designated collecting bank. After payment, has been made to the collecting bank, the employer will take evidence of payment to its tax office. Your tax office should be the nearest tax office to your primary operating premises. Here’s a list of the location of the various LIRS tax offices in Lagos.
As an employer, you must ensure that PAYE is remitted to the LIRS before the 10th of the month following the month when the deductions were made. E.G January PAYE must be remitted on or before February 10th. Note that contract employees and interns are not exempted from PAYE deduction.
At the end of the year, employers are expected to file duly updated returns on all salaries and wages paid to the employees on their payroll within the preceding tax year. Returns must be filed at the employer’s tax office before January 31st for the preceding year. For instance, 2016 returns must be filed before January 31, 2017.
PAYE rates
If you have read this far, the question on your mind is probably, “how much exactly is this PAYE?” Well, it depends. Lagos operates a graduating scale PAYE system. The tax rates increases based on the employee’s annual taxable income The scale used by the LIRS is:
a. The first N300,000 will be charged at 7%;
b. The next N300,000 will be charged at 11%;
c. The next N500,000 will be charged at 15%;
d. The next N500,000 will be charged at 19%;
e. The next N1,600,000 will be charged at 21%;
and
f. Then above N3,200,000 will be charged at 24%.
Where an employee’s annual taxable income is below the N300,000 threshold, then the appropriate tax rate will be 1%.
So, for instance, where an employee makes N5 million a year, not all of the N5 million would be taxed at the maximum of 24%, but rather the first N300,000 of the N5 million would be taxed at 7%, the next N300,000 of the remaining N4.7 million will be taxed at 11%, the next N500,000 of the remaining N4.4 million will be taxed at 15% and so on until the maximum threshold is reached.
Failure to File Taxes
Not filing taxes is a criminal offence! Any employer who fails to make proper tax deduction or fails to account properly for deductions made is liable on conviction to a penalty of the total sum of taxes due. In addition, the employer will pay 10% annual interest for every year the taxes were not filed or improperly filed. Employers are also liable to penalty and interest for failure to remit and late remittance.

How to Start a Business in Nigeria: Step By Step Guide

These days you can find very useful information about entrepreneurship and starting a business. But often time you will need to separate the wheat from the chaff in order to get the right information.
Usually the process of starting a business begins with an idea. Once you think the idea is good enough to build a profitable business with then the next step is to develop your business idea in to a viable business plan.
A business plan is one of the most important ingredients when preparing the recipe for a successful business. Without a well written business plan, your investment in your business may just be akin to flushing money down the drain.
In this post, we’ve highlighted a series of easy-to-follow steps that you need to successfully start your business and execute that amazing business idea.
Step 1: Develop your business plan
Writing a business plan can be done by someone else on your behalf but it will be best for you to write it yourself.
The major aspects of an ideal business plan include:
The Executive Summary
Business Description
Market demand
Competitive analysis
Design and Development
Operation and Management
Resources
Financial forecast or projections
Executive Summary
The highlight of your business plan is found within the executive summary. Basically, the major points of the business are usually outlined in just this single page of the executive summary.
Business Description
In this chapter, you’ll discuss the industry you’re starting your business in, while taking a look at the present and future of the business in the industry.
Market Demand
This is based on the analysis of your market. After the evaluation of your market, you can then proceed to identify your target market. The identity of your target market is very important because this is what influences your market strategies.
You can easily formulate the right techniques on how to impart value to your target market as a means of generating sales and boosting your company’s profitablity.
Competitive analysis
Analysing your competitors’ strengths and weakness will help you identify the potential opportunitie and threats in your prospective business. In terms of the weakness, you can leverage on them to create your unique selling point.
Design and Development
This applies particularly to businesses that are into product development. This phase doesn’t necessarily apply to service based company.
In the design and development phase, it is essential you create a budget to cater for these aspects.
Operation and Management Plan
This is another important aspect of the business that many first time entrepreneur often neglect. Once you business starts running, you’ll need to have an operation and management schedule that should be strictly followed. This should be clearly explained in your business plan so that you can have an idea of your inflow and outflow.
Most times, there are a lot of expenses at the initial stage of starting a business and you’ll need to take this into consideration when planning your business.
Resources
You can’t start a business without resources and you ill need to ascertain your resources. The best way to do that is to write down what you have. Also, you may have received support from your family and friends. In this case, you should ensure that these sources are clearly noted in your plan.
Financial forecast
Although the written forecast for most businesses is often different from reality, it is still necessary that you write it down in your business plan.
Particularly, if you’re looking for funding, one of the things potential investors often look at is the forecast. It puts things in perspective and gives them an idea even if vague of what to expect from your business.
Step 2: Register your business
The next hurdle to scale after mapping out your business plan is to get your business registered with the Nigerian Corporate Affairs Commission commonly called the CAC.
The CAC is responsible for registering all business entities in the country.
But you’ll need to answer a couple of questions prior to getting your business registered.
First, what kind of business are you starting?
Basically, there are 3 types:
Sole proprietorship
Private Limited Liability Company
Public Limited Liabilty Company.
The ownership structure of your business will influence the type of business you should start.
Secondly, what is your business name?
You’d need to take your business name to the commission to get it verified. Sometimes, the name you intend to use may already be used by someone. So, you’ll need to get this sorted first before you can take the next step.
There are several CAC offices spread across the 36 states of the country. You should choose the one closest to you. You can do your registration online as the process can be done online.
Once your business name is verified, you’ll be given a form to fill. Input the necessary details and pay the prescribed fee. Then, your application will be processed. After a few weeks, your business registration should have been concluded and you can move to the next step.
Step 3: Tax registration
The next step is get your company registered at the tax office. Tax related issues are under the Federal Inland Revenue Service (FIRS).
This is where you’ll send the value added taxes, company income taxes and withholding taxes. It is extremely important that your get registered at the tax office closest to you.
Once you’re done with the process. You’ll be given a tax identification number (TIN) which you can use for your tax processes.
Step 4: Obtain the necessary permits
Most businesses are supervised by associations as a result, one of the things you need to do is to get your business properly registered with the related body. For instance, the Pharmacist Council of Nigeria is responsible for overseeing pharmacy businesses in the country.

You can make enquiries on the stipulated fees and the things you need to do before you open your business to the general public.
Failure to carry out due process can put you in trouble and you can end being fined. Remember ignorance is no excuse in the court of law. Often times, there are fees to be paid and guidelines to be followed and you need to know these things before you can carry business in any of the sectors you choose to.
Once you’ve sorted out the process of getting your permits and other necessary steps then you can move on to the next step.
Step 5: Acquire office space
The process of renting or leasing your office space can be done simultaneous with steps 2, 3 and 4.
Interestingly, these days there are some businesses that can be started from the comfort of your home. For instance, most internet based businesses don’t require an office space. You can seamlessly work remotely from home. But you may eventually need an office space on the long run. This will be necessary once your clientele base begins to expand and you need to employ more staff.
Also, some businesses are extremely location dependent. This is why it is necessary that you must have carried out market research prior to acquiring your office space.
One example is the fast food business. This line of business will do extremely well in a commercial area than it will in a residential environment.
After acquiring office premise, the next step is to furnish it to your taste. Also, the products you will be selling will be brought in at this stage. And if it’s a service based business, the equipments needed to execute your daily activity should also be brought in.
Step 6: Create a website
Almost every business is online these days. Your business should have a web presence at least. This makes it easy for potential clients to easily locate your business.
But, this goes beyond just finding a random web designer and telling him to create a web site for your business. Already, the internet has a lot of crappy websites and you shouldn’t your website to the long list.
You should pay particular attention to the user interface of your site. Also, it is important that your search engine is particularly optimized to search engines like Google.
These features can not be carried out by just anybody with the tag of website designer. If you really want your business to be exceptional then you should employ the services of a professional web designer that knows his onions.
For instance when people search for keywords relating to your business, they should be able to find your company as one of the top on the list and this is what will make the process of getting clients easy. Getting a good designer might need you to pay a reasonable amount of money. Well, by all means please do, because it will certainly help your business on the long run.
Step 7: Implement your marketing strategies
“Build it and they will come”
I’m sure you’ve heard that before. Well, that never works because nobody will come if you don’t tell them to come This is where your marketing team plays a prominent role.
Depending on what kind of business you operate, you need to actively advertise your services to your potential clients.
You should find where your prospective customers hang out and seek ways to meet them to advertise your products.
If you run an educational or tutorial centre, go to schools in your neighbourhood and tell the students about your service.
If you run a poultry business, go to the market or visit the retail stores around you and offer your eggs to them.
There are many ways to execute your marketing strategy and this is where the success of your business lies.
Many businesses have failed because they couldn’t generate enough customers and one major cause of this is poor marketing efforts.
Step 8: Develop a brand
It is easy to fall into the trap of thinking your business is successful due to stream of customers you have and your revenue generation.
But the truth is creating a sustainable business goes beyond that. You need to create a unique value by branding your company appropriately.
For instance, if you run an eatery or restaurant, you can build your value around your unique customer service. With many restaurants lacking in this aspect, you can easily stand out among your peers. Interestingly, it doesn’t cost you much apart from taking out time to train your staffs in customer service.
Branding also includes create a logo to signify what your company stands for. Also, your staff should have a business card or ID card showing where they work.
These simple tools are very powerful in helping you stand out among other companies in your niche.
As stated earlier, it’s easy to get stuck in the profit first mentality but a great business is all about value creation. And you can make the value you offer reverberate in your branding message.
Step 9: Promote your business
Once you’ve done all you need to do. You shouldn’t rest your oars. Promote your business and seek opportunities to showcase your business to your potential clients. Promotion of your business is something you should never tire of.
In a short while, you would see steady improvement in your business.
Wrapping up
Starting a business in Nigeria isn’t for the faint hearted. Although, we seem to have given you a step by step guide but it’s not really as smooth sailing as shown in this article. There are some frustrations along the way.
But the difference between the successful business person and the unsuccessful one is simply – persistence. Don’t give up in the face of adversity, keep at it. Seek advice when you’re stuck in a rut and again – don’t give up.

Now, it’s time to take the first step and execute that great business idea of yours -– Get Started!
[Below is the older version of the article. We purposely left it just in case you might still benefit from it in one way or the other.]
How to Start a Business in Nigeria: Step by Step Guide
Nigeria is blessed with vast resources and a very huge population. This makes it a great place to set up a business.
More and more expatriates are trooping into Nigeria to set up businesses, and that goes to show how favorable the business terrain in the country is.
However, achieving anything tangible from your Nigerian start-up requires a lot more than having the required capital. First, you would need a very solid business idea and then you would need to back it up with the proper research, planning and implementation.
To help you successfully launch your start-up in Nigeria; here are some of the steps you need to take:
1. Develop a business idea
First, you need to do a proper research to come up with a smart and unique business idea. I mentioned unique because one mistake most Nigerians make is that they ignore many of the vast business opportunities in Nigeria and instead decide to ‘copy’ other people’s ideas.
If selling GSM recharge cards looks like a very profitable business, before you know it, almost everyone is selling recharge cards. Nigeria is very large, and there are a lot of products and services that are still unavailable or could be better.
So, don’t copy other people’s ideas, instead, you should take time to brainstorm on the solutions you could proffer and the needs and yearnings you can help to satisfy.
2. Write a business plan
You cannot start a journey without having a destination in mind. Can you? Even Nomads usually have a destination in mind before they set out with their cows.
Your business plan is the blueprint of your business. It shows where you are going and guides you throughout the journey. Hence, it is important for you to take your time to write a business plan before moving to the next stage of starting your business.
Writing a business plan is quite easy, and there are even software packages that you can use to do it easily.
3. Register your business
The next step is to register your business with the Corporate Affairs Commission (CAC). There are three main types of business you can register in Nigeria:
Sole proprietorship.
Private Limited Liability Company.
Public Limited Liability Company.
To register your business in Nigeria, these are the steps you should take:
Decide on the ownership structure of your business.
Choose three preferred business names.
Visit the CAC office closest to you to find out if your preferred names are still available for registration or have already been taken by another company. Some business names may also be rejected if they are offensive or reserved.
Provide details of your new company such as your proposed business address, memorandum of association, articles of association, details of directors, share capital and allotment, and all other necessary information and forms required by the CAC.
Pay the necessary fees. For a sole proprietorship/business name as it is popularly called, you would need between N12,000 and N15,000 to register your business with the CAC, while other forms of ownership would require at least N30,000 for registration.
Upon verification and compliance, the certificate would be issued to you and then you are free to commence operation of your business.
4. Complete tax registration
The legal process of setting up your business isn’t complete until you have visited and registered with the Federal and State Inland Revenue services.
The Federal Inland Revenue Service (FIRS) is where you would send all the Value Added Taxes, Company Income Taxes and Withholding taxes, while the State Inland revenue would be in charge of collecting all PAYE taxes deducted on your employees as well as other necessary taxes and levies. You may also need to register with some local government agencies for payment of some taxes and levies.
5. Obtain necessary licenses and permits
This would depend on the nature of business you wish to operate. If you want to operate a transportation business for instance, you would need an inter-state transport permit.
There are a lot of licenses and permits specific to different businesses so it is important to find out which permits you need to apply for to run your kind of business.
6. Acquire office space
Next, you should seek out a suitable office space, which would be accessible to your clients and expose you to the type of clients you need to patronize your business.
7. Set up a website
More than 40% of Nigerians visit the internet daily. Therefore, you should look for a good web developer to help you create a user-friendly website that will give your business solid internet exposure.
8. Develop a marketing plan
Just like your business plan is important, your marketing plan is also extremely important. Many Nigerians business owners start a business without a marketing plan or an idea of how they intend to promote and sell their products. This is a mistake you should avoid. Have a clear plan on how you intend to penetrate the market and outsmart your competitors.
9. Work on branding
Lastly, you should work hard at creating a unique identity for your brand. Design your logo, business cards, company brochure and all necessary materials to help you promote your business.
With all of this in place, you would have completed all the legal requirements and would be ready to start your own business in Nigeria.

Even the most successful of businesses inevitably face a cash crunch or two during their lifetime during which paying bills, giving employee wages, handling operational costs, etc become a nightmare. Here’s how to avert such adverse events through cost-cutting strategies.

We’re not talking about laying off employees or cutting corners from an already tight budget. We’re talking about practical ways like the ones below to save your business a substantial sum of money every month.

Make friends with technology

Is that document submission process taking too long? Is accounting eating into your team’s valuable time? Use technology! Many companies feel that investing in such products is a waste of money but very few realise that time is money. Using products and services saves time and minimises instances of manual error, making work smooth and thereby, giving more room to creativity.

Test before you buy

Seasoned shoppers all have one mantra; “One needs to shop around before buying.” Similarly, companies too should not jump on a product and purchase it for the entire team. Most products offer free trials or discount offers for the first month which gives your team to test it out and then purchase it. In case the tool does not offer free trials, buy it for an individual before purchasing for the entire team. Make sure to compare different products available in the market, consider their pricing, read reviews by peers, etc before making a decision.

Buy in bulk

Buying in bulk is a money-saving principle used by businesses, big and small. Be it the retail shop owner across the street or designers who bulk buy fabrics to make profits, it is always cheaper to purchase in bulk. Buy essentials like office supplies, like paper, printer cartridges, etc or products like tissues, coffee, etc. in bulk. You may be able to save thousands this way.

Track every little expense

Keep a record of all miscellaneous expenses or buy tools to track every kind of expense no matter how small or insignificant they look. Small expenses often add up and create bottlenecks when claiming taxes. The best way to track these expenses is to save all the receipts and review credit card settlements at the end of the month. There are many apps and service products that can help with this.

Review expenses every quarter

Purchased a SaaS tool last quarter? Don’t forget to stop the subscription once you no longer require it! If you forget, you will find that your business is burdened by services you never use that simply weigh down the balance sheet.

Find creative alternatives to traditional vendors

Some services are required by every business irrespective of their size. If you are looking for HR and Recruitment services don’t just rely on conventional options but explore and then select the agency or services based on your requirements.

Apply credit card rewards points for gift card purchases

Use your credit card reward points to purchase gift cards to minimise business expenses like employee gifts, office supplies or travel. You can save thousands with these points.

Renegotiate your payment terms and timelines with clients

If yours is a B2B Business and your clients ask for payment terms of 30-90 days, offer them a discount on their next purchase in exchange of timely payment. Alternatively, you could also give a discount on current invoices in return for early payment that can boost your business growth and maintain a healthy cash flow through invoice discounting platforms.

Source by ezinearticles

Series #1: MICRO-FINANCE BUSINESS

Starting a Micro Finance Company With No Money – A Complete Guide.

Do you want to start a micro finance company? If YES, here is a complete guide to starting a micro finance business with NO money and no experience.

Okay, so we have provided you an in-depth sample micro finance business plan template. We also took it further by analyzing and drafting a sample micro finance marketing plan backed up by actionable guerrilla marketing ideas for micro finance businesses. In this article, we will be considering all the requirements for starting a micro finance business. So put on your entrepreneurial hat and let’s proceed.

Why Start a Micro Finance Company?
Loads of investors and entrepreneurs are interested in owning a bank but they find it difficult to meet the expected capitalization for a bank and also the requirements needed to obtain a banking license. If you are indeed interested in owning a bank but don’t have what it takes to own one, then you should focus on starting a micro finance bank; the capitalization and license requirements for a micro finance bank is far lower than a standard bank.

Starting a micro finance bank can be demanding and risky at the same time, but if you have done your due diligence before venturing into the business, you are likely not going to run at a loss. First and foremost, you are expected to have experience in the financial industry. It will pay you to study accountancy or banking and finance if indeed you want to venture into this line of business.

It is very needful that you analyze the existing micro finance banks in and outside of your area. Know how many there are. Also, you would be required to check the existing competition, as well as know their strength and weaknesses. Knowing the weaknesses of the existing micro finance banks around you means that you would be able to learn from their mistakes and in turn come up with a better and more preferred micro finance banking services devoid of the mistakes and weaknesses of others.

So, if you have done the required feasibility studies and market research, then you might want to venture into this business. If you have been tinkering with starting your own micro finance bank, but do not know how to go about it, then you should consider going through this article; it will sure give you the needed guide and direction.

Starting a Micro Finance Company With No Money – A Complete Guide
Industry Overview
Micro money lending (Microcredit or Microloans as it is also called) are small loans that are given by individuals rather than banks or other related financial institutions. These loans can be given by a single person or gathered across a number of persons who each contribute a portion of the total amount. The micro money lending business is a business that is part of the micro finance industry.

Micro money lenders basically give out loans of $50,000 or less to startups and other small-scale businesses or individuals. More often than not, micro loans are given to people in Third World countries, where traditional financing is not available, to help them start small businesses.

Micro lenders receive interest on their loans and repayment of principal once the loan has matured. Due to the fact that credit status of these borrowers may be quite low and the risk of default high, micro loans command above the average market interest rates making them attractive for investors to come in.

Statistics show that as at 2009, an estimated 74 million men and women held microloans that amounted to US$38 billion. Grameen Bank reports that repayment success rates are between 95 and 98 percent.

The Micro Money Lending cum Micro Finance industry is indeed a thriving and profitable industry especially in third world countries like Bangladesh (where it originated from), Botswana, South Africa, Kenya, Uganda, India and a host of other countries.

The Micro Money Lending cum Micro Finance industry will continue to blossom because people and small and medium scale businesses will always need financial services from micro finance banks. Despite the fact that the industry seems over-saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own micro finance banks.

Over and above, starting a micro finance bank requires professionalism and a good grasp of how micro finance banking works. Besides, you would need to get the required certifications and licenses and also meet the standard capitalization for such business before you can be allowed to start a micro finance bank in the United States. The industry is heavily regulated to guard against financial fraud, money laundry and criminality.

Starting a Micro Finance Company With No Money – Market Research and Feasibility Studies
Demographics and Psychographics
The demographic and psychographic composition of those who require the services of micro finance banks cut across people and start-ups who need a structured daily savings plan or access to quick loans but don’t have the requirements to access these loans from banks and other standard financial lending institutions.

So, if you are looking towards defining the demographics for your micro finance bank, then you should make it all encompassing. It should include start-ups, mom and pop business owners, artisans, aspiring entrepreneurs and workers within your area of operation.

List of Niche ideas Within the Micro Finance Industry That You Can Specialize in

There are no niche ideas within the micro finance banking industry; micro finance banks basically give out loans of $50,000 or less to startups and other small-scale businesses or individuals and also carry out micro finance banking activities such as daily savings/contributions. Some micro finance banks may also operate on the internet; that is, people can access their micro loans without physically residing within the locations where the micro finance bank is located.

The Level of Competition in the Micro Finance Banking Industry

The level of competition in the micro finance banking industry does not in any way depend on the location of the business since most micro finance banks and other micro money lending ventures can operate online and from any part of the world and still effectively compete in the micro money lending industry.

But over and above, there are several micro money lending ventures and micro finance banks scattered all around the United States and in the cyber space. So, if you choose to start your own micro finance bank in the United States, you will definitely meet stiff competition not only amongst micro finance banks and micro money lending ventures in the United States, but also all over the globe especially if you choose to also operate online. Besides, there are well- established micro finance banks and micro money lending firms that determine the trends in the industry and you should be ready to compete with them for clients.

List of Well – Known Brands in the Micro Finance Industry

In every industry, there are always brands who perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they conduct their businesses and the results they have achieved over the years.

These are some of the leading micro finance banks and micro money lending services firms in the globe;

ASA – Bangladesh
Bandhan (Society and NBFC) – India
Banco do Nordeste – Brazil
Fundación Mundial de la Mujer Bucaramanga – Colombia
FONDEP Micro-Crédit – Morocco
Amhara Credit and Savings Institution – Ethiopia
Banco Compartamos, S.A., Institución de Banca Múltiple – Mexico
Association Al Amana for the Promotion of Micro-Enterprises – Morocco
Fundación Mundo Mujer Popayán – Colombia
Fundación WWB Colombia – Cali – Colombia
Consumer Credit Union ‘Economic Partnership’ – Russia
Fondation Banque Populaire pour le Micro-Credit – Morocco
Microcredit Foundation of India – India
EKI – Bosnia and Herzegovina
Saadhana Microfin Society – India
Jagorani Chakra Foundation – Bangladesh
Grameen Bank – Bangladesh
Opportunity Fund
Accion New Mexico
CDC Small Business Finance Corp.
Economic Analysis

When it comes to starting micro money finance bank, you just have to get your feasibility studies and market research right before venturing into the business. It is good to mention that micro finance banking services is not for rookies; it is for professionals who have successfully gathered the required experience and expertise to handle such business. But an aspiring entrepreneur can learn ropes on the job. You just have to be careful so that you won’t get swindled.

Starting this kind of business definitely entails that you raise plenty of startup capital (pool cash from interested investors). If you are already a wealthy person, this might not be an issue. Conversely, if you cannot, you may want to consider pulling the resources from family and friends. Depending on the scale at which you want to start from, you might require as much as multiple thousands of dollars to take off.

If you get your economic and cost analysis right before launching the business, you may not have to stay long before you break even.

Starting Your Micro Finance Bank Venture from Scratch vs Buying a Franchise

When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful micro finance bank as against starting from the scratch. Even though it is relatively expensive buying the franchise of a micro finance bank, but it will definitely pay you in the long run.

But if you truly want to build your own brand after you must have proved your worth in the micro finance banking services industry or other related financial services industry, then you might just want to start your own micro finance bank from the scratch.

The truth is that it will pay you in the long run to start your micro finance bank from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.

Possible Threats and Challenges You Will Face When Starting a Micro Finance Bank

If you decide to start your own micro money lending services firm today, one of the major challenges you may face is the presence of well-established micro finance banks, micro money lending firms and also other related financial lending institutions (banks, mortgage banks and payday loan services firm et al) who are offering same services that you intend offering. The only way to avoid this challenge is to create your own market.

Some other threats that you are likely going to face as a micro finance bank operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn. There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.

Starting a Micro Finance Company With No Money – Legal Matters
Best legal entity to use for a finance business
When considering starting a micro finance bank, the legal entity you choose will go a long way to determine how big the business can grow.

You have the option of either choosing a general partnership or limited liability company which is commonly called an LLC for a business such as a micro finance bank. Ordinarily, general partnership should have been the ideal business structure for a small scale micro finance bank especially if you are just starting out with a moderate startup capital. But people prefer limited liability Company for obvious reasons.

As a matter of fact, if your intention is to grow the business and have clients both corporate and individual from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.

An LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your micro finance bank; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

Catchy Business Name Ideas Suitable for a Micro Finance Bank

Generally, when it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.

If you are considering starting your own micro finance bank, here are some catchy names that you can choose from;

Silver Bird Micro Finance Bank, LLC
Life Line Micro Finance Bank, Inc.
Trend Vibes Micro Finance Bank, LLC
Calyx Group Micro Finance Bank, Inc.
Santiago Anglican Community Micro Finance Bank, LLC
Fleming Hills Micro Finance Banks, LLC
James Capstone Micro Finance Bank, LLC
Beach Land Micro Finance Bank, Inc.
CPC Micro Finance Bank, Inc.
Gill Gates Micro Finance Bank, Inc.
Shannon Stevens Micro Finance Bank, Inc.
Range Hills Micro Finance Bank, Inc.
Insurance Policies

In the United States and in most countries of the world, you cannot operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your micro finance bank.

Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own micro finance bank in the United States of America;

General insurance
Risk Insurance
Credit insurance
Deposit insurance
Financial reinsurance
Lenders mortgage insurance
Health insurance
Liability insurance
Workers compensation
Overhead expense disability insurance
Business owner’s policy group insurance
Payment protection insurance
Intellectual Property Protection/Trademark

If you are considering starting your own micro finance bank, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

Is Professional Certification Needed to Run a Micro Finance Company?
Professional certification is one of the main reasons why most micro finance banks stand out. If you want to make impact in the micro finance banking services industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in the competitive market.

These are some of the certifications you can work towards achieving if you want to run your own micro finance bank;

Micro-Lending License
Certificate in Microfinance Banking Operations
Please note that you cannot successfully run a micro finance bank in the United States and in most countries of the world without acquiring professional certifications and business licenses, even if you have adequate experience cum background in the industry.

List of Legal Documents You Need to Run a Micro Finance Bank

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own micro finance bank in the United States of America;

Certificate of Incorporation
Business License and Certification/Micro Finance Banking License
Business Plan
Non – disclosure Agreement
Employment Agreement (offer letters)
Operating Agreement for LLCs
Insurance Policy
Consulting contract documents
Online Terms of Use
Online Privacy Policy Document
Apostille (for those who intend operating beyond the United States of America)
Company Bylaws
Insurance Policy
Memorandum of Understanding (MoU)
Financing Your Micro Finance Bank

Asides from the required capitalization and pool – funds to invest with, starting a micro finance bank can be cost effective. Securing a standard office in a good business district, equipping the office and paying your employees are part of what will consume a large chunk of your startup capital.

No doubt when it comes to financing a business, one of the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for startup capital for your micro finance bank;

Raising money from personal savings and sale of personal stocks and properties
Raising money from investors and business partners
Sell of shares to interested investors
Applying for loan from your bank
Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
Source for soft loans from your family members and your friends.
Choosing a Suitable Location for your Micro Finance Company

Micro finance banks and most financial services based type of businesses require that you see physically with your clients hence it must be located in good location; a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients and maximize profits from the business,

Most importantly, before choosing a location for your micro finance bank, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out. This is why it is very important to gather as much facts and figures before choosing a location to set up your own finance bank.

These are some of the key factors that you should consider before choosing a location for your delivery and courier Services Company;

The demography of the location
The demand for the services of micro finance banks in the location
The purchasing power and business activities in the location
Accessibility and road network of the location
The number of micro finance banks and micro money lending ventures in the location
The local laws and regulations in the community/state
Traffic, parking and security
Starting a Micro Finance Company With No Money – Technical & Manpower Details
On the average, there is no special technology or equipment needed to run this type of business except for customized micro finance banking software, social media management software applications and other financial related software apps.

But you will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables and shelves). Some of these items can be gotten as fairly used especially from organizations who are selling off or auctioning their office furniture, computers and equipment.

If you have enough capital to run a standard micro finance bank, then you should consider the option of leasing a facility for your office.

As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making this decision. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Head of Operations, Risk Manager, Operation Staff, Accountant, Business Development Executive/Marketing Executive, Loan Officers, Debt Collectors and Customer Service Officer.

Over and above, you would need a minimum of 10 to 20 key staff to effectively run a medium scale but standard micro finance bank. If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you which is why you should make plans to partner with other financial consultants/experts that operate as freelancers.

The Service Delivery Process of a Micro Finance Bank

On the average, the way micro finance banks work is similar, but ideally a micro finance bank is expected to first and foremost build a robust company profile before sourcing for working capital.

Basically, micro finance banks operate in the same way other banks and micro lending services firms do. They get people to invest with them and pay them interest, while lending out that money to people who ask for loans and charge interest on those loans.

The difference between micro finance banks/micro lenders and banks is that banks have a ceiling on the amount of interest they can charge, which is stipulated in the Usury Act. Micro lenders can charge any interest rate they like because of an exemption in the Usury Act.

It is important to state that a micro finance bank may decide to improvise or adopt any business process and structure that will guarantee them, good return on investment (ROI) efficiency and flexibility; the above stated business cum services process is not cast on stone.

Starting a Micro Finance Company With No Money – The Marketing Plan
Marketing ideas and strategies
As a micro finance bank, you would have to prove your worth over and over again before attracting investors and individuals to give you the needed liquid cash/working capital. So, if you have plans to start your own micro finance bank, it will pay you to first build a successful career in the financial services industry.

People and organizations will only commit their money under your care if they know that they are going to get good returns on their investment.

So, when you are drafting your marketing plans and strategies for your micro finance bank, make sure that you create a compelling personal and company profile. Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to the financial services industry and the organizations you have worked for. This will help boost your chances in the market place when sourcing for clients/investors.

Please note that in most cases, when sourcing for funds from banks and other financial institutions, you will be called upon to defend your proposal, and so you must be pretty good with presentations. Here are some of the platforms you can utilize to market your micro finance bank;

Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, households, mom and pop businesses, start-ups, small and medium scale businesses in the location you intend operating your business
Advertise your business in relevant financial magazines, radio and TV stations (make yourself available for micro finance banking services related talk shows and interactive sessions on TV and Radio)
List your business on local directories/yellow pages
Attend international micro finance and financial services expos, seminars and business fairs
Create different packages for different category of clients in order to work with their financial needs as it relates to savings, micro loan and interest rates
Leverage on the internet to promote your business
Join local chambers of commerce and industries around you with the aim of networking and marketing your services; you are likely going to get referrals from such networks.
Engage the services of marketing executives and business developers to carry out direct marketing
Strategies to Boost Your Micro Finance Brand Awareness and Create Your Corporate Identity

If your intention of starting a micro finance bank is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.

In promoting your brand and corporate identity, you should leverage on the print, electronic and social media (the internet). As a matter of fact, it is cost effective to use social media platforms to promote your brand, besides it is pretty much effective and wide reaching.

Below are the platforms you can leverage on to boost your brand and to promote and advertise your business;

Place adverts on financial magazines and related newspapers, radio and TV stations.
Encourage the use of word of mouth publicity from your loyal customers
Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms to promote your business.
Ensure that you position your banners and billboards in strategic positions all around your city
Distribute your fliers and handbills in target areas in and around our neighborhood
Contact corporate organizations, households, mom and pop businesses, start-ups, small and medium scale businesses in the United States et al by calling them up and informing them of your organization and the services you offer
Advertise your business in your official website and employ strategies that will help you pull traffic to the site
Brand all your official cars and ensure that all your staff members and management staff wears your branded shirt or cap at regular intervals.

The acting Executive Chairman of the Federal Inland Revenue Service (FIRS) in a press conference and meeting with stakeholders on resuming office disclosed the focal areas for his administration. Amongst the many areas stated was the enforcement of advance Companies’ income tax (CIT) on interim dividends.
Letters have now been issued to some affected companies and also a public notice issued to that effect (see attached). Download it here:

firs-public-notice-on-taxation-on-interim-dividends