Every weekend, I catch up on my favorite newsletters and one of them happens to be Notadeepdive. It’s a simple, nuanced, and fun-to-read newsletter that focuses on the business of technology. A few weeks ago, I read an article about a big oil and gas company selling parts of its Nigerian business and I wondered how small businesses that use Kippa Software could survive if big companies were selling out. To answer this question, I invited Muyiwa, the owner of Notadeepdive to share lessons small business owners could learn from his newsletter.
Who is Muyiwa?
I am a journalist and a content person. I write on business and technology. I have been reporting about technology for about 3 years and now that’s what I do.
Okay, let’s dive right in. Did you catch the pun?
LOL, such a razz babe
So I would be asking questions based off of different articles on Notadeepdive, cool?
Yeah, that’s fine.
Based off of your article on getting loans from Nigerian banks, how do you think small businesses can increase their chances of getting loans?
It’s a bit tricky because what you sort of see is that Nigerian banks are a lot more open to lending money to individuals. So if you are still at the small stages of your business, and need a loan of about 1 Million Naira, you might want to consider getting a personal loan for your business. To do this, you need to consistently use one bank and ensure your inflow and outflow go through the bank.
As a small business owner, it’s definitely worth considering because the interest rates from banks are quite competitive right now.
Do you think the E-naira stands to change things for Nigerian small businesses?
From my very little research, I don’t think anything changed. It almost feels like mobile money transfers but that’s just it.
Talking about mobile money transfers, how do you think Mobile money transfers would affect businesses when Nigeria hacks them?
I think it would really change how businesses operate. Let me give you some context, when I got into Ghana, right after registering my Simcard, the telco also set up Mobile Money for me. If you look at it that way, mobile money attempts to solve the problem of financial inclusion can be solved from the grassroots. So, everyone with a mobile phone can make a transfer. This would change how businesses operate, receive, and make payments drastically for good.
Another of your articles says financial inclusion is more a problem of lack of funds than technology to do transact with. How does mobile money in any way solve this?
With mobile money, the gala seller down the street can receive payment on his phone. It allows for payment of everyday running costs up to a certain amount. It’s a great way to drag everyone into the financial system without putting 200 hurdles in front of them.
On price changes in Nigeria, Nigerian business owners are struggling. Do you see these prices going down?
Quite honestly, I don’t see this happening in the short term. Insecurity is still very high and that’s making food prices skyrocket and in turn affecting the prices of everything else. Unless the government has some trojan horse up to it’s sleeves, I don’t see reduction happening.
I think right now, businesses should focus on how they can hedge against inflation. For me, I currently only charge in USD. It gives me some stability when I think of my finances. I learned this at a point where I managed some social media pages.
Another thing to consider is getting your customers on a subscription. This can apply to both goods and service providers. If you can get your customers to pay a 6-month subscription upfront, you get the necessary cash flow you need to run your business and you can maybe make necessary investments in your business to hedge against inflation.
So if you charget 5 000 NGN for a pack of body lotion that lasts a month, consider telling your customers to pay 25 000 NGN for 6 months.
You provide services for clients, how do you manage your finances asides from your day job salary?
For one, I make sure I don’t mix my salary with the money I get from external clients. I always want to know how much I receive from different sources and how I spend my money.
What I do is, I keep my salary in one bank account and then I keep any other income in another bank account. I don’t take a lot of risk with my salary, I take more risks with any other income because I figure honestly, I could survive without the extra income.
With this side income, I can take some risks, like investing in cryptocurrency. A small amount of money is also set aside for one-time investments that may or may not come up at any time.
I remember one time I got a dispatch bike at a very good deal. That bike ended up giving me 30% in one year which was pretty solid.
So I would say save some money but also invest as much as you can afford to.