Business Education Lesson Plans: February 2012

How to Tap Opportunities from Offshore Markets

The world is now, no doubt a tiny room

With the advent and gradual development of Information and Communication Technologies, the world continues to shrink from its generally accepted status of a global village to that of tiny room. This is due to the undeniable fact that the entire human, commercial and economic endeavors be it small, medium or large scale being digital, the ease with which affairs are now conducted is very much astounding.

From the general look of things, one of the surest and fastest ways that one can leverage one’s business – be it in the area of manufacture or services – is to extend operations to other communities or countries and this can be simply defined as services export - an opportunity yet to be tapped not only by Nigerian entrepreneurs but also by their counterparts in the majority of the countries in Africa and in deed the developing nations of Asia and Latin America.

Services export can be likened to the sale and delivery of an intangible product, called a service between producers and their consumers that are based in different countries or if one likes, can be called international trade in services. It goes without saying that services, although invisible, play a very credible role to facilitate all aspects of entrepreneurial endeavor. Infrastructural services like transportation, communication and finance lend the necessary support for any type of business to flourish. In the same regard as well, educational, health and recreational services can influence the quality of labor available to corporate organizations. In the same vein, professional services offer their specialized expertise to heighten firms competition in the market place.

A very interesting point is that services make up a the major part of world economies including the developing countries ranging from 39% of gross domestic production in Nigeria to 89% in Hong Kong. It is also noteworthy that services industries now increase in importance in the developing countries as can proved by the records of the International Trade Centre that by 2050, 80% of the workforce worldwide will be working through this process.

For one to succeed as a service exporter, the entrepreneur must have a niche for products or services that differentiate the individual or business from others . Since services cannot be inspected before purchase, clients have to depend on referrals and endorsements from the suppliers. The most important key in this regard is to create credibility for the growth and development of the effort. Service firms can secure international repute through membership of international professional bodies or enlistment in international directories.

For one to be successful in service export, the target market must be seriously evaluated , carry out the necessary feasibility studies with the assurance for adequate demand for the effort. There is also the need to identify one’s strengths and challenges and then consider to adapt to the local environment. After setting up the necessary information. communication and technology facilities, service firms should be able to operate with a dispersed telecommuting workforce to allow for jobs to be created and sustained in the remote areas and by this, pressure on the urban areas will be reduced . After all said and done, high quality services should make goods and services exports not only more competitive but also quite challenging.

Setting up a Business Venture with Zero Capital

The very harsh effect of the ubiquitous economic global melt down continues to take an incredible toll on the social and economic life of the people worldwide with the attendant consequences of job loss and financial insecurity while the only option left for any right thinking person is to find another means of securing a better means of livelihood and this is in no other area than business.

Setting up a business as a means of survival is, today, no longer a child’s play and this is the reason why all available legitimate avenues must be sought for one to make a remarkable breakthrough in the effort. One must not jettison the idea of moving ahead just because of the Herculean task of sourcing the needed loan from the bank, personal savings or the existing financial institutions but should always apply the workable ideas and personal attributes. A good case in point is that of a young man in downtown Lagos who started his career life as a banker and later on a computer engineer by exposure. Today, he earns additional thousands of dollars as income through his affiliation with a Blue Chip Furniture Company that he single handedly set up with a zero capital.

This is a testimony of how a business idea can metamorphose into a reality in spite of the normal finance sourcing challenges. Right from the onset, he was quite aware that getting a loan facility from bank or any financial institution has never been a piece of cake since the first thing they normally ask for is collateral before securing the loan which must be paid back with a cut-throat interest. In some cases the rate is around 25 per cent and if one does not have adequate customers to make good sales during the lending period, the pressure to pay back the loan can be quite worrisome.

Immediately the young man graduated from college in 1992, he was employed by an audit firm from where he moved to a computer company as an accountant. It was while at this company that he got the idea that one might not need a huge capital to start a service providing company and so in less than a year, he had acquired all that he needed to know to set up a private Information Technology company of his own.

With a very strong conviction and determination to succeed, he started with a table and chair, converted one of his two rooms into an office. All he had in his possession is just one laptop computer. He started by moving from school to school to sell the idea of Information Technology to the proprietors. This is with a zero capital and within three years, he became popular in the education sector of the environment. The first Information Technology program he conducted for schools in 2005 embraced more than 100 participants while he used the income so generated to acquire more furniture, computers and other vital tools to enhance his work.

Just in six months of operation, his IT center grew astronomically and that afforded him the opportunity of getting a building of its own and also a number of vehicles. Now, the business has over 40 schools as clients some of which pay an upfront fee of 50 per cent with the balance paid fully after the program. Some new clients might not be willing to make the initial deposit but once they see what had been offered, they feel happy and pay up immediately after the program. The most important factor here is to build confidence in clients and everyone on your way; this is an inevitable determination of the lifespan of a good business venture.

How to Make Money from Mushroom Cultivation

Mushrooms are the exposed fleshy fruiting body of some natural fungi which are widely distributed with a wide range of shape, color and sizes. The poisonous varieties are usually found in the wild. The plants are very rich in protein, vitamins, essential amino-acids and carbohydrates. Mushrooms are low in fat and the fiber is starch-free. Market for them is enormous because of their culinary, nutritional and health advantages..

Some popular species are the oyster and the shrimp like mushrooms while the potential for making money through them is quite great. In China, more than 20 million people engage in the cultivation process and generate more than $20 billion per annum. As far as Nigeria is concerned, the country has a favorable environment and clement weather for their easy cultivation. One estimate says that about one million people in the country work to generate over $3 billion per year from the process.

Mushroom production is quite different from growing the other existing green plants; this is because it does not contain any chlorophyll and therefore depend on other plant material, the substrate, for food. This is why the part of the apparent organism is really just the fruiting body while the near inconspicuous part is the mycelium-tiny threads that grow on the substrate and absorb nutrients by breaking down the organic material. Generally each species of mushroom (and there are a several range of varieties) prefers a particular growing medium even though some of them can thrive on other plant materials.

Growing mushrooms requires a good knowledge and some skill but the benefits for the farmer far overshadow the efforts involved. To start with, the intending cultivators must conduct a very good private and special market analysis in order to identify the necessary profitable skill, cost implication, time consideration and the income accruable from the effort.

Pest control is a very important factor that must be put into consideration when going into this aspect of money making venture so integrated pest management should be borne in mind; this can be accomplished by sanitizing the environment provided to ward off the peculiar pests. The way to do that is by careful study of the ability to identify which of them are active, their quantity and how harmful they will be to the cultivation. Once the life cycle of each problem organism is known, then adequate measures should be taken to make it difficult or impossible for them to bring in any sort of harm to the products.

The next step is to identify governmental agencies, corporate bodies and individuals that are interested both the marketing and the consumption both locally and internationally. After that, a necessary contact must be established with the identified bodies, and then use their knowledge and experience to leverage on the business. This effort will also serve as a veritable support base system. Further step to take in that direction is drawing up of a processing plan from initial harvesting to general marketing. The plan has to be run by a good support system and then put the process in motion.

Notwithstanding the current ever biting global economic recession, food commodities still stand out always on the demand chain while mushroom cultivation is a good avenue to earn hard currency in these hard time days.

How to Make the Best of Use of Scarce Funds

Taking into account the downward trends in the Nigerian local stock market, investors are always frightened by the outcome of their funds on stocks no matter how appealing because of the unstable investment climate in the market. Apparently, the unexpected crash in share prices that spanned across almost 20 months after the prices reached their peak in March 2008, continues to leave many investors in the dark on what constitutes safe and and sound investments.

Many people were disappointed by the sudden burst of the market bubble owing to their lack of basic understanding of the nature of the market. Financial experts are of the view that all hope is not yet lost in the market and since it has gone the unexpected way activities are expected to stage a surprising comeback They equally opined that the lull might be on the way out but the returns might not be as it was in the previous past because of the ubiquitous credit crunch which leave many companies struggling to stay afloat.

Hard times induced by the global economic crunch notwithstanding, other profitable investments abound to ensure safety of funds and steady returns on investment.This means that those who maintains long term interest in the stock market should continue to leave their funds there for future maximum benefit. Investment in the money market may be attractive for the time being just like in the case of the bond market but what matters is the immediate or future situation.

As it is the common practice, a government bond is issued by the national authorities and denominated in the country’s normal currency while those released by governments in foreign currencies are referred to as sovereign bonds. The bonds, as the experts remarked, are normally risk-free owing to the fact that the authorities are in a good position to raise taxes for their redemption at maturity. It is quite advisable to invest in bonds directly through licensed stock brokers and the point of attraction there is a sure fixed returns. All your banker needs to do is to negotiate for a change of terms at the end of the investment period.

With a few thousand dollars, it is possible to invest in bonds, all the bankers do is to pool the investment together and then buy the stock for the investors. They also advise on what bonds are available in the market at any point. It is also possible for money market investors to explore Banker’s Acceptances and Commercial papers according to what the experts say. A commercial paper is an unsecured short-term promissory note issued by a company for short term cash, normally for financing working capital requirements.

The banker’s acceptance, in its own right, is a short term instrument initiated by a non-financial firm and guaranteed by a bank. The instruments are normally traded at discounts from their face values in the secondary market according to the credit quality of the guaranteeing banks or financial institutions. Returns on acceptances and commercial papers are often higher than bonds or Treasury Bills.

Anyone who wants to venture into any kind of investment for the first time should consider the peculiar need first because if one wants to invest for the future, there is no need to look for an investment maturing early. An investor can only reap the full benefits by contacting the professionals who normally weigh the fund availability against the needs and then arrive at the best investment options.