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Today on the podcast, we're going to be looking at pre-orders and partnerships as a cost effective way of starting your business. Again, we're going to look at pre-orders. We're going to look at partnerships. You want to start a business? Money. No, today. You don't know how you're going to do it. Cash flow is low. What are you going to do? That's what we're going to be looking at today. To be honest, I was tempted to title it 0 naira ways to launch your business.
But I say, you know what? Let me not join these people. Let me not lie to you. There is no 0 naira way to start the business. There's no way to start the business that you will spend cobble. There is also no 0 effort way to start the business. There's no way you start the business that you will lift your finger. So I said I'm not joining these people and start giving people hope that there's a way that you start a business without dropping cobble or without lifting a finger.
So that's what we're going to be looking at today. I'm making today's recording at home, so expect to hear some noise in the background, especially some clanking because it looks like one of my neighbors is having some maintenance work done on his house or her house. We have to be gender inclusive over here. So if you've been looking for a podcast that all we do business, Niger business, then this is the podcast for you.
Welcome to the podcast. I'm your host, Tava Shima IED and for years this is all I've been doing, bringing advice, insights, strategies, tips, tricks, tactics, results in the Nigerian market. It's all I'm focused about. So if you're ready to stop wasting time on all those other generic podcasts, then stay tuned in here. Stay locked in here, subscribe on Spotify, YouTube, Apple or any player of your choice. And if you'd love to connect,
call, send me a text message or WhatsApp message on 08064662140. So again today on the podcast, pre-orders, partnerships, how to start your business when you don't have much money. Now, the reason why this is what I'm talking today is because on the radio show, because I have a radio show on Radio Maria 91.3 FM, that's Abuja is called the business Booster Show. So on the business booster show now, one guy called him, the guy's name is Edu.
If I heard him correctly, the guy's name is Edu. Abuja based of course, and Area 2, I think that's where he lives. So Edu, just in case you discover this podcast, you know, a shout out to you. You're the one that inspired today's episode. So Edu's problem now, the issue is that he's finding it difficult to grow his business because of lack of capital. By the way, sidebar, just between me and you, lots of people call on the radio show and they say they're having problem because of lack of capital.
Now, I don't like to pull people down, but because you guys are my peeps, we've been having a relationship for a while. You know, you guys listen to my voice, so I can speak to you straight and just take it. And I'm speaking to you straight out of love. There is no such thing as your business is suffering because the lack of capital foul. There's no such thing. Businesses suffer for a number of reasons but for most people especially in the SME space as in your day fresh just they start.
The reason why you're suffering is not because of lack of capital. If you think it's lack of capital, you will always be thinking who will borrow me capital. The main reason why most SME's are suffering is because they lack the ability to sell. Excuse me? They are poor at sales. They are poor at marketing because they are poor at sales and marketing because they are poor. They are poor at talking to strangers because they are bad at getting people to become customers because they are bad at collecting money.
Once you talk to people, that is the main reason why the business is offering. So money is not flowing into the business. That is the reason why most businesses are suffering because money is not flowing in. For those of you who keep saying that oh, lack of capital is the problem, you're thinking of how you can get money from, you know, from rich uncles and aunties or investors or loans or whatever. But look, let's be real here.
Whenever you have that mindset, what you are doing is you are borrowing cash flows from the future. Let me explain Zuckerberg, we all know Zuckerberg, Gabby, the guys are age mates, Abby or the guys billionaire, right? OK, now this how Zuckerberg them, this is how they did it in the beginning. You have this wonderful idea. This idea is not making money yet. You won't look for investors. Investors who drop money now, they'll give you millions and millions of dollars, dollars,
high currency. But when these investors give you money now, it is because they have hope. That is your idea. The team makes sense. So therefore they're hoping that in the future the business will be making good money. What they are trying to do in giving you money is they want to take a share of that money that is coming in the future, but they want to take that money now. That is what happens. OK, so let me repeat. When you're going to raise money today, you're essentially just capturing, borrowing your cash flow from the future.
So whether you like it or not, you will still have to go and learn how to sell something. You will still have to learn how to make money somehow. So Zuckerberg them, they solved the problem by selling advertising. And so now everybody's happy. The people that dropped money before, they're happy because cash don't they flow. They're now seeing returns, so everybody's happy. So whether we like it or not, the point will come at some point, Zuckerberg, them, they had to figure out a way about how to collect money from us.
The time will come when you have to learn how to collect money from someone. You either do that now or you do that in the future. My own take is if you're an SME space, learn how to be collecting that money now, which is why sales and marketing is important. So don't tell me that your business is suffering because of a lack of capital. Go out and look for customers. Make sure you're charging the fair price, the profit that comes in you use small to flex,
you use the remainder and invest back into the business. That is how money, which is the life law of business will becoming small, small, small. Capital is not your problem. For those of you in the SME space, capital is not your problem. I will say one more time for those of you, you just the start, you're brand new, you're fresh, is not as if your business is capital intensive capital is not your problem. Now for Ed, on the other hand,
OK, yeah, capital is a problem because what Edu does is the guys in the cocoa and timber business and all these businesses that involve Bush, they are really capital intensive. So you're based in Nassara, you want to mine gold, you go into the Bush, into the wilderness, begin the dig is capital intensive. You have to buy shovel, you have to pay people, you have to buy explosives, you have to pay geologist to go and figure out where the gold stream is.
Any business that involves entering Bush is capital intensive. Exporting charcoal, capital intensive. Exporting timber, capital intensive. Cocoa capital intensive. Palm wine capital intensive. If you don't believe me, travel towards all that Bini area and you see the hectares and hectare, plenty of land. People will plant palm wine trees. Oh, by the way, unfortunately palm wine has music gas station, I don't know what to call it.
You know, there's some things that you plant now and it takes a while before the fruit comes. So I think for palm wine, I think is it like 7 years? I'll be 11 years. In other words, you entering into the palm wine business or the palm whatever business and you plant your trees now in 2025, you will not even begin to smell any money to talk of break even or whatever until seven years from now because that is how long you will take for the thing to grow.
In the meantime, while you're waiting for that seven years for your in fact, let's make it practical. This is 2025. I'll be so if I say I want to enter into that business now and I go and buy 1000 hectares somewhere in those state and I go and plant, I don't know, several 100 heads of, of palm fronds, palm canal, palm tree or whatever it's called by the way, you know, I'm not in the business. I'm just making stuff up.
I don't know whether you know, 1000 hectares is enough. And I don't know whether several 100 heads is a is a good investment or not. But either way, if I remember correctly from secondary school, I think it takes like 7 to 11 years. So seven, I started this business in 2025. I will not even have produce to sell until 25 + 7. That's 32 until 2032. Hope you guys can hear me. You say you want to get involved in some Bush business,
businesses that involve entering Bush. These are the things that are involved. So for the palm candle, now the palm trees, now we buy the land, we plant the thing. I will not even have produce to sell until 2032. Right now it is 2035. Sorry, it's 2025. I want to see anything to start selling until 2032. In the meantime, we gas to maintain the land. In the meantime, we have to be weeding the land. In the meantime, we gas to be paying for fertilizer, you know,
so all these things, anything that involves entering Bush, there's no capital intensive because people call they say you want to do the charcoal export business because you hear people collecting millions, 1,000,000 millions. Just know if it involves Bush, in fact, Bush business equals capital intensive. Just take it like that so far I do yes, his business is capital intensive. So how's he going to fund the business? So to get into capital intensive businesses, we've already discussed on the quote, the podcast before that you have to raise the money.
These are your options. Raise the money or do pre-order or partner with people who have capital, Excuse me. And by the way, when we say capital, we mean money or infrastructure. Because some people when they say capital, they only think of money. They don't think of infrastructure. Infrastructure just means the all I say now, should I say hardware, the physical, physical, physical things that are required to move the business forward.
So if you want to do laundry machine business, you already have paid for the space, but you don't have money for machines. And then your auntie says I have two machines in the house now they're not doing anything. Come and carry the machine. Those machines, that is infrastructure that is also capital. Sorry, 1 moment. OK, I'm back. Sorry about that interruption. My in laws are around, so I just needed to sort out one or two things so I'll think on the podcast.
In the past, we're talking about how if you want to raise money for capital intensive businesses, if you want to get into capital intensive business #1 raise the money #2 do pre-order number three, partner with someone who has the capital. Capital can be either money or infrastructure. So if you want to do chicken re chicken farm, you've bought like 700 heads of chicken, but you don't have land to start. You're rich, Auntie says this land that I have at the back of my house, I wanted to build house for my son but when he's less on, has decided to go to the UK.
He's following white girls up and down. I don't think he's coming back to Nigeria anymore. Well, you DNF you of mine, you'd be like, say you have sense come and use this land and start your chicken farm, your chicken ring, that land that is capital because it's the infrastructure that you need to start the business. So you can partner with someone who has either the cool cash or the infrastructure, the hardware, the physical something something that you need to start the business.
Now when it comes to raising money, of course, and we've discussed in the past, you can go and meet investors. You can go and borrow the money or you can try and get equity investors is when you meet someone and you oh sorry, look at me, I got my ideas crossed. Anyway, let me start from borrow. So borrow basically is when you go and meet somebody to collect the money, but then in exchange you have to give the person their money back plus something on top.
So if you reach out, he says how much do you need to study your chicken business? You say I need 2.7. She'll say no problem take this 2.7. However my son is coming back in two years time. I want to throw him a wedding then and I will need 3.5. So take this 2.7. But in three years you're giving me back 3.5 M that is a loan. You have borrowed money so the difference between 3.5 and how much you want to give you 2.7, that is interest.
So that is borrow then. OK, there's one I also forgot, which is grant. Grant is when, you know, now dash them, dash you. So like government agencies, NGOs, they give you the money and they say take it, you don't have to pay us back. But usually there are strings that are attached. There are some conditions you have to fulfil. But I've made podcast episodes before about grants, so I'm not going to go into that today. So that's boring.
Then you can get the money from people. What I think is a good idea, like in Zuckerberg's case, and they say no, no, no, no, your man, don't worry, there's not a loan. I want to be a part owner in this business. I want to have a stake in this business. They want a stake in your chicken Ray. They want a stake in your cocoa farm. They want a stake in your timber processing yard. So those are investors, but you're losing some equity.
You're losing some ownership. So those are options that are available and I've made podcast services about that in the past, so I'm not going to stress that today. Now, the downside about this is you have to spend a lot of time convincing people that this business is a good idea. And the only way we can convince someone that this is a good business idea is if you have a good business plan backed by financials. I repeat, a good business plan backed by financials.
The business plan is the document that says this is me, this is who I am, this is the business idea. This is why I think this is a good business idea. This is how the business will make money. This is how much money that I need. When you give me the money, This is where I will invest the money. When I invest the money. Now we're getting into financials. When we invest the money, this is when we start expecting some returns to start coming out.
The returns hopefully should come out at this at this rate. When do returns come out? This is when we hope we can start paying you back. And when we start paying you back, this is the amount that we hope we should be giving you. So that's what I mean when I say business plan backed by financials. People are dropping big money, people are dropping millions. You can't just be collecting millions based on, you know, based on family and vibes, you know?
So do the responsible thing, Drop a business plan, put something down, show your auntie that this is the plan. This is the reason why Chicken Ray is a good idea. This is how the Chicken Ray will be making money. And this is how we intend to pay you back so that in three years time, when you need the 3.5, this is how we'll make sure that you get the money. Now, since we've made lots of podcast episodes about that in the past, let's just leave that and go straight into pre-order because remember, we're talking about pre-orders and we're talking about partnerships as ways of getting into the business.
So pre-order, it's kind of hard to explain, but let me just go ahead and explain. It's the simplest or best way that I can. pre-order just means you collect money from somebody first. You now use that money to fulfill the order. I repeat, pre-order just means you collect money first, you know, use that money to fulfill the order. When I spoke about this on the radio show, the example that I gave was this. I hear in Abuja now that that Samsung food is going for like 2.5.
I don't know how true it is, but as it is I've heard, so let's say that true, true. The thing is actually like 2.5 and I'm thinking 2.5 M there's good profit there. I need to enter that business. I cannot go around I start telling people that oh do you want Samsung fold I can supply it for you and your wife. How many do you want? You want three the man says yes he wants 3. I said sure no problem Sir transfer that money to my account and you have the phones by Wednesday next week.
So the guy will now transfer 2.52.52.57.5. I will now transfer 7.5 M to my account. So that is the pre-order, because right now I don't have that Samsung phone on me. I don't have sushi, but I've collected the money and I take that money and I can go to Banix. Maybe I can go to the place where they're buying in wholesale and maybe I can buy the phone Instead of buying at 2.5, maybe I can buy the phone at 1.8. I buy 3.
So 1.81.81.8, that is 3. Then that remaining 888, that's 24, 74 + 1, that's 3.4. So that's 3.4 M, but I collected 7.5 and I use 3.4 M and buy all those phones. If my math is correct, if my math is not correct, I don't think my math teacher is listening. So no shame. I will now deliver the phone to the guy on Thursday and he's like, oh, thank you very much Mr. Hedy. Pleasure doing business with you. I look forward to doing business with you again.
And I'll say and I even try and get some referrals for him. So this is how me I will enter into the Samsung fold or mobile phone business. Meanwhile, I no get shishi. I don't have warehouse, I haven't bought inventory. I no get nothing. That is pre-order. Collect the money first, the money that you collected, make sure you collect enough so you can use that to fulfil the order that essentially is pre-order. I explained it like that live on the radio and I told people that look, I understand this one of you are nervous because me to the first time I had it when I
was much younger, I say haha, now scam now on the phone and be that honestly speaking, that was my first impression. Well, it took me while to realize that, you know, that some businesses, that's just how some businesses and that's how some industries run on pre-orders. When I was able to see that it's an ethical thing, it can be done legally. But of course, you know, if you're a criminal at heart, you can see where there's temptation for, you understand there's temptation for misuse.
And of course, you have to plan these things well because if you collect 2.52.52.5, that's 7.5 and then you find out now that actually to fulfil the order you actually need 8.2, then 100 because you go back and starting for extra money. You know, you saw someone sound like an idiot. But anyway, let's leave the potential ethical issues that are involved. But that essentially is a pre-order. And then while I was on the air,
somebody called and the example that the person gave because it was a real life situation, it was the perfect illustration of what I was trying to say. The guys in the waste management business based in Abuja, the guy known gets on small contracts here and there and now he wants to branch. So he decided you look at other states, he got a contract that was awarded for another state. And so that's the reason why he was calling because he has gotten the contract.
But meanwhile the guy no get compactor, compactor, a big compactor, that's the big truck, big, big truck. You know that thing that looks like a lorry but The thing is covered at the back, you throw all the refuse in it and then the thing just grinds all the trash. So that's the compactor. So the guy, the guy's question essentially was, you know, what's the way forward, how to finance the business. So after he caught, I told him,
see those, are you listening to the show now you can see how I'm not making things up. There are businesses that go essentially on this pre-order model that essentially is like pre-order. You went to the state, you went to the local government, you say give me this contract, they gave you the contract. Meanwhile you don't have the thing to fulfil the contract, what you've been given the order. So that is a pre-order. You go and sell, you go and market yourself, you secure the contract to secure the order.
Hopefully the money, the balance, the whatever that they drop will be enough to fulfil the order. You now use that money and one fulfil. So that was one option that is available to someone like Edu who is in that situation. You can pre sell cocoa, you can pre sell timber, collect 30% deposit. Hopefully that 30% deposit is enough to settle all the boys in the Bush and to settle all the people who are processing the cocoa, harvesting the cocoa,
doing the treatment of the cocoa, the everything, the treatment of the timber. Now if that 30% is enough to facilitate it all well and good. By the time you deliver and the person pays you the remaining 70%, all that 70% is profit and you're good. You now try and get some referrals but of course you'll be saving up and saving up for more that money. So that one day you have all your equipment on ground, money to pay labourers on ground, the chainsaw, the process, all the everything you buy to keep on ground.
So in the future you don't have to do pre-orders anymore. Everything is now in house. You have more control over your schedule, you have more control over your cash flows, you know, things like that. So they're essentially pre ordering. So you can see that I'm not making things up. I discussed this on the radio show. Before we close the radio show, somebody called and it was essentially a pre-order. The guy went to go and get waste management contract, but he does not have compactor and he's now thinking what's the way forward.
So for those of you who thinks this sounds like 419, I understand if you think something sounds like 4-9, do not engage in it because selling is hard. If you don't have confidence in what it is that you're doing and you're trying to do it, your mouth will be shaking and people will say these guys something is fishy about this guy but I'm not too sure. So only took head when you are confident. Now what you're doing is legal and is above board.
So if you're afraid of these kind of arrangements then stay away from the order. pre-order. But you can see how pre-order is an option for you to enter a business and money no today. So that's one option. Then let's see what else. OK, Partner with someone who has infrastructure. So back in my baby lawyer days is what we'll talk about joint venture partnerships, joint venture agreements, you know, things like that. Now joint venture just means you and me, we come together, we partner to enter the business because to enter this business we did XYZ.
Me I have the X, you you have the Y and the Z. And so boy alpha now or the alpha now more on now you come together and then you do the business because you need XYZ. One partner has X, another person has Y&Z. That is called the joint partnership. Now for these capital intensive businesses, all these Bush business, you know, mining gold mining, lithium mining diamonds, what else, processing timber and all these things, the money that is involved is usually big, big money.
We're not talking 10s of thousands. We're not talking hundreds of thousands. We're talking 10s of millions or hundreds of millions. It is big money. My advice to anyone is when you're at that level, when you're at that stage and you're chilling with big boys, big girls, when I've done the exchange, hundreds of hundreds of millions, please, I beg you, before you sign anything called joint venture agreement, I beg you, I beg you go and involve a lawyer.
Joint venture partnerships, joint venture agreements are very, very technical. So let's say this cocoa and timber something, you are trying to joint venture with someone. Let's say you own the land in the Bush. Let's say it's family land and then the other person is going to drop money to be hiring the labourers and the person is going to drop money for machines. There are lots of things that need to be decided. For instance, the machines, the machines that the person is buying.
Who owns it? Is it the person that owns it and he's lending it to the business? I'll be, is it this new business that owns it, the machines maintenance, how are we going to be maintaining the machines if we decide one day that we're going to dissolve this partnership, are we going to break it? And then you know everything 5050 or how So there are lots of issues that need to be discussed that needs to be decided upon ahead of time.
So please involve your lawyer because this is something in high stakes because I do not want any of you to get involved with something where you make a promise that you can keep or you enter into a covenant. Then when you start that covenant, you see that the terms of the covenant are too heavy for you to bear. So before you sign any joint venture or something, go and involve a lawyer. If you are at that stage, there's no point reaching out to me because to be honest, I
haven't practiced law in, I don't know, maybe like 18 years. So I will be of no help to you there. The best I can do is I can say, well, this guy is my classmate, he's still in the game. Let me give you his phone number. He'll be able to advise you accordingly. So those are two options that you can use to launch a business when you know your hand is not that strong or your pocket is not that strong. You can do pre-order, collect the money first, make sure the money you collect is enough to fulfil the order, or look for good candidates for a joint virtual partnership.
And remember, joint virtual partnership just means you want to enter into this business. This opportunity requires XY and Z resources. You only have Y&Z, so you go and meet somebody who has X, then you do the business together, you sign an agreement and then you begin any agreement you're signing. Especially when you're getting to that level, millions and millions and millions and millions because even at the level of hundreds of thousands,
when things go wrong, people lose their mind, not dog of where hundreds of millions are involved. So please involve a lawyer. So that's it essentially. And let me repeat one more time in case anybody who didn't, who didn't get it at the beginning, when you see or hear people over on the Internet talking about businesses that you start with 0 cover, $0.00, it's a lie. Because even in this example, Edu, who's going into the Bush,
if nothing else, I'm sure he's raising his own transport fare or raising money to buy food for him and the boys when they're in the Bush. If nothing else, when there's no business that you start that you won't drop cobble, there's no business that you start that you won't lift your finger. So there's no business that is effortless. There's no business that does not require any anything down. So all those people who keep on talking about all passive, this passive that 0 narrow down, zero there.
They're not telling you the truth. Don't follow those people. Please do not follow those people. I was tempted I told you guys to make the title of this thing 0 narrow ways to launch your business by saying they're not joining these people Internet. Nice. I know if I titled it 0 Narrow ways to launch your business, I know that boys would download this episode is it is way for me to enter business and I won't drop money.
Let me listen. So I'm doing the responsible thing by giving it that title And stop looking for business opportunities where you won't lift your finger or where you won't drop a cobble. Doesn't exist. Maybe when we get to heaven and we'll find those kind of business opportunities. But for now, yeah, that's not realistic. So that's it. And that's all for today. Remember, if you'd love to connect, you can call, send me a text message or WhatsApp message on 08064662140.
And if you're ready for more topics like this about business, growing the business, getting money, getting customers, moving market, getting sales, you're looking for strategies that work in Niger, then you're in luck. Because wherever it is that you're listening to this podcast right now, whether in the podcasting app or on YouTube, if you just keep crawling, scrolling, you will see that there are over 1200 episodes here.
So you're in the right place. Enjoy, listen, but don't spend like 3 hours listening. Of course, you actually have to get over. Also wish are you in the right place as you're listening, take note, as you take notes, apply the ones that are easy to apply. As you see the results, call me and give me testimony. I really love all those testimonies, keeps me going. It lets me know what you guys find useful and that is how I
know for sure that the stuff that we talk about here are relevant to the Nigerian market. I know that because you guys, you call me back, you give me the testimony. So thank you very much for listening. I will see you guys soon.