Latest / Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint / Don't Waste a Dime: Funding Your Startup for Maximum Returns

Transcript

Don't Waste a Dime: Funding Your Startup for Maximum Returns · Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint

• 0:01
  Hello and welcome. My name is Tavishma Aide.
• 0:04
  I saw sales and marketing challenges and I'm making
• 0:07
  today's recording at an undisclosed location in Abuja
• 0:10
  while waiting for a meeting. So expect to hear some
• 0:13
  interruptions in the background, you know, and music coming in
• 0:15
  through speakers and things like that.
• 0:17
  Anyway, the goal of the podcast is business education.
• 0:20
  I'm not here to tell you about my runs, so please spread the
• 0:23
  word when we're done so that friends and family members in
• 0:26
  Nigeria and abroad can benefit from the questions that we
• 0:29
  tackle. They can do that by subscribing
• 0:32
  on Spotify, YouTube, Apple or any player of their choice.
• 0:36
  And if you have any sales and marketing questions, you can
• 0:39
  bring them to me. You can call you, get an SMS or
• 0:41
  WhatsApp me on 08064662140. Now today on the podcast, I
• 0:48
  would like us to do another listener question and this one
• 0:52
  is from Mimi who called from Galademoa.
• 0:56
  And the question is going to touch on how to determine
• 0:59
  capital outlay when you're a start up.
• 1:01
  So let me repeat, how to determine your capital outlay as
• 1:05
  a start up. Now, when we say start up, I
• 1:07
  mean the older, much more traditional meaning of the word,
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  which just means that you want to start an enterprise,
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  therefore you're a start up and not necessarily that you have to
• 1:17
  be involved in tech or anything digital or you know, the fancy
• 1:21
  ideas that we are used to these days.
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  Then when we say capital, we just mean any amount of money
• 1:29
  that you have to allocate or you have to invest to get your
• 1:33
  business off the ground or that you need to keep your business
• 1:36
  running, you know, every day, every week, every month.
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  So we mean by capital and then of course I will say capital
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  outlay. By outlay, we mean how you're
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  going to distribute these resources.
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  Now the reason why we're tackling this question today and
• 1:54
  the reason why this these kinds of questions are important for
• 1:57
  most of us is because a lot of us are trying to start our
• 2:01
  businesses and we have limited capital.
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  We don't have tons of money. So we're often left to try and
• 2:09
  decide where is the best place to put this money to start the
• 2:12
  business. Should I put it here or should I
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  put it there? Should I pay for the shop or
• 2:16
  should I buy this equipment? Should I pay for marketing or
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  should I pay for staff? Should I pay for, should I
• 2:21
  subscribe to this or should I subscribe to that?
• 2:24
  So we're always having to make these kinds of choices and
• 2:27
  starting up our businesses because so excuse me, we're
• 2:32
  always having to make these choices because money is scarce.
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  And so we have to determine how we're going to allocate these
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  scarce resources. So now, like I said, this is a
• 2:44
  listener question from Mimi in Galadimawa.
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  She's a Baker, and she has limited funds.
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  And so when she called in on the radio show, the question was
• 2:52
  whether to spend the little capital she had to upgrade and
• 2:56
  buy a mobile phone so that they can help with content and social
• 3:00
  media. And of course, for those of us
• 3:02
  who came from the event space, because I used to be a wedding
• 3:04
  photographer, these sorts of things are very, very important.
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  So maybe if you own a brick making business, for instance,
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  you know, whether you're on social media or not might not be
• 3:14
  the, the, the deal breaker. But for those of us who used to
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  do photography, catering, excuse me, baking, all these sorts of
• 3:24
  things, then yeah, having a nice one would help just to make sure
• 3:29
  that you have content, you're available on social media and
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  those sorts of things. So for Mimi, the question was
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  should I buy the phone or should I buy new baking equipment?
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  Now of course, as usual, I wanted to chat some more in
• 3:43
  WhatsApp, but she didn't follow up the conversation.
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  So, and I can't remember what the answer I gave over on the
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  air. But I looked at the question,
• 3:53
  some of these questions that I've tackled in the past, and I
• 3:57
  realised that we can explore it some more and explore some
• 4:00
  principles that might help other people who are in a similar
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  situation. Now, after giving this thing
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  much more thought, you know, you are in business, you have
• 4:11
  limited funds, you're a Baker, you want to know whether you
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  should put the money in the phone or put it in baking
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  equipment. I decided to come up with a much
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  more principled approach for trying to solve this problem.
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  And the principle that we're going to look at today is
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  revenue generation, of course, which is absolutely essential to
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  those of us who look at ourselves as salespeople.
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  Because the whole point of being in business or the whole point
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  of being, yeah, the whole point of being in business or trying
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  to have a side hustle or whatever is we are trying to
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  produce something so that we can sell something and then get some
• 4:46
  revenue. So when it comes to determining
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  how you are going to spread this money and you're in a cash
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  crunch, you should be looking at putting the money where it is
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  going to allow you to produce something first that you can now
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  sell later on. Because if you can produce and
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  then you can sell and you can get revenue, then you can use
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  the revenue to reinvest in the business and then also use the
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  revenue to flex. So that's the whole idea.
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  Revenue generation is the first principle.
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  So now looking at that with this frame of mind, now how are we
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  going to tackle Mimi's question? There's an argument to be made
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  that you should buy new equipment because new equipment
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  is going to help you with production capacity.
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  Because people like Mimi who've been baking, you've been in the
• 5:30
  game for a while. It is not uncommon that you know
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  you started off with one oven that was a gift from Mumsy or
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  gift from your tutor or gift from a family member or gift
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  from a benefactor or whatever. But essentially you start off
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  with a small oven and you're trying to grow your sales, and
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  then after a while you're limited to production capacity
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  and it's something I've seen first hand by a family member
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  who also happens to be a Baker. So you start off with one oven
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  and in the beginning it's OK when you bake maybe 2 cakes a
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  day, but eventually business picks up, you start getting more
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  orders and maybe you need to start baking like 5 cakes a day.
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  But The thing is, your trusted oven is too small, so you're now
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  limited by production capacity. You might need to get new
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  equipment. Sometimes it's a matter of
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  quality and consistency because the old oven that you have is,
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  you know, you're all faithful. You've been using that oven for
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  like 6-7 years and is now beginning to get some problems.
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  So maybe in the middle of the oven, it bakes well, at the back
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  of the oven, it's too hot, at the front of the oven is not hot
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  enough. Now in that case, you cannot
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  guarantee a certain level of quality or consistency all
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  through when you're trying to bake multiple cakes at a time.
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  And so it might be necessary to upgrade and get new equipment.
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  Then of course, efficiency. Some of these things are gas
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  powered. I hear that the electric
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  electrical powered ovens, I have not seen any yet and I would
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  like to meet any Nigerian Baker who truly bakes off of
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  electrical ovens because you know now as per how never can
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  be, I would really be curious to see how that works.
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  So for the gas powered ones, you know, not all of them have the
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  same level of efficiency and of course newer and newer models
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  come out every year and they are much more efficient with gas.
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  So that can be a thing. Your trusty oven is maybe 10
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  years old and maybe you're using lots of gas, but if you had a
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  newer model, you'll be able to use less gas and produce more.
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  But overall, these are the kind of things that will determine
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  the cost effectiveness of the equipment that you have at the
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  moment. If you happen to be in Mimi's
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  case and you're wondering should I upgrade to a new oven or to a
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  larger oven for baking, then on the other hand, the argument for
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  the smartphone is also kind of convincing because if you have a
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  correct smartphone, then brand building is going to be easier.
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  Getting audio, getting video, getting photos, getting whatever
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  is going to be a whole lot easier.
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  And then there are lots of business people in Abuja,
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  surprisingly, who still run businesses and they only use
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  analogue smartphones. But sorry, analogue phones, not
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  smartphones, who just goes to show that you can build a
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  successful business without being on social media.
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  But The thing is, when you're ready to take that leap,
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  sometimes in fact, you would make sense for you to have a
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  smartphone. So a smartphone easy for brand
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  building and then also easy for you to manage your socials
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  because trying to manage your socials from a laptop can be
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  tedious. It means that every single time
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  you want to upload on Instagram or moderate on Instagram
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  moderation that is responding to comments or things like that,
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  you have to go on open your laptop and that can be a hassle.
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  But then if you have a correct smartphone, managing your
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  socials will be, you can do that easier.
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  Then of course, it also facilitates customer interaction
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  because now you can have WhatsApp, you can interact with
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  people on WhatsApp, you can respond to people in the DMS, in
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  the direct messages from Instagram or LinkedIn or
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  wherever. So there can be an argument for
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  the smartphone, but of course, remember what it is that we said
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  that revenue generation should be our first port of call.
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  We should be spending the money in the way that would allow us
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  to produce and to sell first so that we can get some revenue.
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  So in the source, in the case of Mimi, if she's able to outsource
• 9:38
  baking, because there are some bakers who that is that model.
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  Basically what they do is they're the ones that have the
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  Instagram handle, they're the ones that do the posting and the
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  everything, and they're the ones who take the order, but the
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  person who does the actual baking is someone else.
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  For those of you who are involved in the fashion space,
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  you, you, you guys already know this kind of business model.
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  I mean, the fact that people are calling you and placing the
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  order through you and you're the one that is doing the
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  measurement. It doesn't necessarily mean
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  you're the one who is cutting and sewing and cutting and
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  joining and doing everything and doing all the embroidery and all
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  of that. So it's a business model that
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  has been used quite well, excuse me, that has been used quite
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  well in other spaces. And maybe those of you in
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  baking, you know, it's something that you guys can try.
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  So if Mimi is willing to try that kind of business model and
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  she can outsource the baking, then buying the phone first will
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  be a step towards revenue generation because it would
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  allow her to sell and get orders.
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  So that'll be a step in the right direction.
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  But then if it's also a question that the old equipment seems to
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  be going on OK, the old equipment seems to be working,
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  then revenue generation is not going to be a problem.
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  That's if you don't have problems with production
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  capacity, quality, efficiency and all those other things.
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  Then she can continue using the old equipment and then buy the
• 11:02
  phone. But then if the old equipment
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  has limited capacity and has problems, then it might make
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  more sense to just go ahead and buy the new equipment and then
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  after making some money by the mobile phone later.
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  So I'm hoping that using Mimi as an example, being able to
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  illustrate how this particular principal revenue generation
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  should for most people anyway, especially at the start up
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  level, determine where it is that you're shifting your money.
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  So if you're about to start a business, you're low on cash,
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  you're using your savings or somebody has given you some
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  money and and you know their decisions that have to be made.
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  Just remember that revenue generation should be your
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  guiding principle. Spend this money in a place that
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  would allow you to produce something so that you not have
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  something to sell and then get revenue because that's the whole
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  point of us being in business in the 1st place.
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  So since this is a particularly noisy environment, I think I'll
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  just stop here. So that's it for today
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  basically. Remember, if you'd love to
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  connect, you can call, you can SMS, you can WhatsApp me on
• 12:10
  08064662140. Thank you very much for your
• 12:15
  time and attention. I will catch you next time.
• 12:17
  Same place in your headphones or in your speakers.