Tag: business

Money Flow #005: How The Side-Hustle Became A Full-Time Job

Money Flow is a series intended to understand how entrepreneurs within Africa interact with money and how it affects the health of their businesses.

Tell me about your business.

My business is a hair company focused on making hair extensions for black hair. So we produce hair that matches black hair texture. I am talking about 4c, 4b, 3a, 3c, etc. We also produce hair modelled after straight, relaxed hair. We provide protective styling options. Our products include wigs, ponytails, and clip-ins. My company helps black women live their best life.

Is your business your full-time job or side hustle?

It’s full time. It started as a side hustle though but as we scaled, I decided to commit myself 100%.

Can we talk about the journey from side hustle to full-time business?

Before I started my business, I worked as head of digital marketing at a digital marketing agency. The experience was good for me. Because of my job, I was always interested in online communities. I tested the products my business created on one of the communities I was developing. It was a brown girl page where I posted things about black beauty, skin tips, inspiration, you know stuff like that. The company was supposed to be a side hustle. Although I knew that it was the kind of thing I wanted to spend my time doing. As we grew and demand grew, I decided I wanted to commit fully to it so I resigned from my day job. Also, I did not want to waste my employer’s time and salary. You know when you are doing something exciting, you think about it all day. I felt like it wasn’t fair to keep going to work every day when all I cared about was my business. Plus, the business was scaling to a point where I knew it needed devotion.

What was your financial background like?

My dad was a consultant and my mum was a businesswoman but financially, things weren’t stable. You know how business is; earning isn’t steady until you get to a particular level. Sometimes things are rosy and other times, things are just there. It’s why I won’t say I was born with a silver spoon. My parents were just able to afford the necessary things and at times, they had to go out of their way to afford those things.

What is your history with entrepreneurship?

Funny but true, I always thought entrepreneurship was never for me. I always pictured myself working in the corporate world. My passion led me to entrepreneurship.

Your passion?

I love authenticity in terms of culture. I mean, the good parts of culture and who we are as black people. I felt that it was important for us to embrace our roots. Also, I have always liked online branding, marketing, and community. It is evident in the way we have grown my business. We have a community first policy. We believe in uplifting black women so we share Do-It-Yourself tips to help black women live their most authentic life.

How did you get the idea for the business?

I started by solving my own problem. I wanted to wear hairstyles that looked just like my natural hair, but there were hardly any options in the market. I created protective hairstyles for myself and a lot of people liked them, including black women living outside Nigeria. It was clear that I could scale this product by leveraging on a network of hairstylists–give them access to a global market and help them make more money.

How much did you have at the start of the business?

I started with $1,000.

How much does your business make every month?

We currently do $20,000 – $40,000 in revenue monthly depending on the season of the year.

Tell me about your journey so far? Lessons, mistakes, and goals.

I have learned so much about marketing and customer behaviour. The tea about entrepreneurship is that you learn every day. Some days are better than the others and you have to keep your head up. It would be a mistake to spend time dwelling on something that can not be changed. As an entrepreneur, you can not afford to wear your heart on your sleeve. The ultimate goal is to be one of the top brands catering to black beauty.

Have you ever received a grant or loan?

Yes. At the start of my business, I got a loan from my friend who is now my husband. He gave me $500.

Are you open to sharing equity?

I am open to sharing equity with investors. That would be in line with our vision as a company. As we grow to reach more markets, we would need more money and then we would be open to sharing equity with investors. There is no rush though. When it’s time, we want to be sure that both parties have value to offer.

What’s your pricing structure like?

We are an analytical company. This means we factor in the entire journey of getting the product to the customer and based on other factors, we decide how much profit we want to make on the product.

What would you say about doing business today in Nigeria?

It can be better.

How?

We need an enabling environment. We have an infrastructural problem in this country. If we have better infrastructure, definitely things will be better. An example is the transport system. Customers could order for something in Abuja and get it the next day. If Nipost was more efficient and more affordable, we would be able to ship worldwide with them instead of these private companies that are much more expensive. Also, I would say more transparency with funds available at banks. Another thing would be businesses sharing their journeys so that people can learn. Instead of the typical God’s grace. I know that God’s grace plays a role but there are still practical steps that people can learn from.

What’s the biggest challenge you face doing business in Nigeria?

Banking and Logistics. We receive lots of payments and banks are not as friendly to small businesses as we would like. Also, managing the delivery schedule is quite difficult.

What’s the costliest mistake you’ve ever made?

A photoshoot I did but I eventually didn’t use the photos because they were below standard. It was at the beginning. We did not have proper mood boards for the shoot. After the shoot, I knew that the pictures were not the kind I would like to share with my customers and community. It was costly to discard those photos but it did not fit into our brand and we could not sacrifice that for anything.

What financial advice do you wish you knew at the start of the business?

Start small and always test your ideas before going full scale.

What’s your favourite quote about money?

The Money wey we get e no go finish o. It’s a line from a Wizkid song that I find funny and deep.

March 9, 2020
UNFOLD: Harmattan Rain.

Most parts of Africa’s history has been somewhat buried in the sands of time, mainly due to poor curation and documentation. Does Africa have enough custodians of their history, traditions and art?

People of the New Age Africa are starting to ask questions about the value of art, it’s role in shaping our identity and what it means to be African.

Art is mostly viewed as a luxury by most of the African populace but it shouldn’t be so. It ought to be seen as a transformation tool, as a platform that can enable national building. Art can play a really significant role in creating a more inclusive African society.

DIX IS HOT is a series of playlists of hottest songs curated by Harmattan rain on their sound cloud account.

Music is an art form that highly influences other art forms from fashion to travel and in turn gets influencedd by these other forms of art. African music has been gaining tremendous grounds with certain acts (you know them) receiving recognition for their sound.

The African sound is on a rise and we need custodians and gatekeepers to help it on its way.

Harmattan Rain is a platform originating from Ghana, that curates independent/ alternative music and art by Africans. Harmattan Rain is an oxymoron that juxtaposes the ideology of art and creativity and is also a homonym for author Ayesha Harruna Attah book. A platform mostly devoted to musical art forms. Harmattan Rain (HR) offers exposure to new talent, revealing eclectic sounds, hidden gems and aural pleasures out of africa to music and art lovers.

HR shares your music on their platform and social media, with followers from different locations such as Ghana, Lagos, US, UK who range from A & R’s, Dj’s, Record labels, International acts, industry players and art lovers. HR’s network of industry influencers who are always listening and watching, have access to awesome music and artists.

For Harmattan Rain, social media outlets such as twitter, instagram not only gives us knowledge of new music but also gives us insights into who is creating what, and why ━ Benewaa Boateng, Lead Curator and editor at Harmattan Rain.

A guest mix put together by DJ’s and Producers rolled out every month by HR.

Based in Accra, Ghana, Harmattan Rain (HR) intends to be part of the force that helps push the African music scene to the heights it can attain. HR foresees a future where African artists don’t have to compromise on their art to be commercially viable and also receive the rewards they deserve.

HR puts up only good music and promotes only good music. Nothing awful goes on Rain.

HR also has a segment on their site dedicated to the business side of the music industry named “Business of music”, which gives information to artists on how they can better push their music, get events to perform in and be cost effective in the production of their craft.

Over the next few years, there’s an expected growth concerning Africa’s music scene, with Nigeria spearheading this bullish trend. The continent’s music industry is starting to permeate the global pop culture and in a not too distant future, it will become one of its pillars.

Monetization of the African music is rising and alongside it are budding global distribution channels. Even the behemoth music labels are entering the fray, seeking a piece of cake.

There’s a transformational narrative ongoing in the African continent with African arts being part of force behind this. Africa is becoming the world’s new consumer market whilst rising as a global influence. While there are still questions about the African music infrastructure, there’s more evidence of a structure growth in the music industry today. A sound structure enables protection of artist’s works and in turn more income for these artists and the industry in general. There needs to be monitoring of all platforms: radio, record stores, online and mobile phones. From there, structures for monetising and royalties are needed so artists can make more money. These things take time and will require legal help from governments

Harmattan Rain’s pitch is, there are more exciting sounds and vibes to the African music scene than what everybody is into today, that needs to be showcased. We Africans are so diverse in our culture and it resonates in our music, our art and needs to become more evident in our identities. Harmattan rain being an online entity gives it a lot of leverage to continually dip its hands more, into the african music jar. As curators of the arts, they can help fulfill their vision by gaining more traction.

Curation is king, but the curators are being nudged out of making the money.

Harmattan Rain’s curation service is of enormous value to the African music chain. Then how do they get reward for their value to enable them do more work?

HR needs to tap into the potential to sell artist merchandise. While curating the artist’s work is outstanding they need to go beyond that and inspire a sale of these works. There’s also the need to up the ability to build a larger audience of listeners and seed new sounds to them. HR has to spread its tentacles to obscure places in Africa to find more distinct sounds.

Although there’s no verified business model for curation of music by online platforms except the usual ad system and the harrowing experience of collecting money from some of these artistes to put up their music on the platform. Neither is there an easy approach for uncomplicated (and crucially, transparent) sponsorship by brands either.

Harmattan rain can be an A & R for the A & R’s and even the music labels, especially the ones streaming into Africa looking to have a stake in the industry. The usual in-house A & R’s and curators for musial companies and entities are paid salaries as reward for their value, but consulting for these companies would bring in more rewards than HR is currently getting.

Creating events/shows for the sake of promoting new sounds and vibes would also be a rich avenue for getting reward for value too. These events need to be packaged well and proposed to the right people.

Even though there’s an argument that many of the best curators do it for love, not money, still because of the unsustainability of this model, there’s a need for this discussion to take HR in a better and more viable direction.

November 4, 2017
The Nigerian Frenemies: Banks and Fintechs
By 2020 in Nigeria, 40% of the banking and payments industry will be at risk, along with 36% of the insurance, asset and investment sector, due to threats from financial technology companies (Fintechs). And these are just the early stages, according to the PWC Nigeria fintech survey. Bill Gates predicts that in the year 2030, two billion new customers will use their phones to save, lend and make payments online.

Nigeria currently leads the world in mobile share of web traffic at 81%. By 2025, 70% of the Nigerian population is expected to be under the age of 25. This demographic represents the millennials; with their high inclination for technology and cutting-edge customer service. It’s an opportunity to intensify the acceptance of fintech solutions.

Fintech in Nigeria started with money transfer platforms but over the years it has grown beyond that. Now, fintech is changing the way business is done and how money is managed (or not). In Africa, investment in fintech has increased significantly from $198 million in 2014 to $800 million in 2016, as investors are increasingly attracted to the industry’s potential to tap into Africa’s huge underserved population. Investments in Nigeria and Africa as a whole have been primarily focused on payment solutions while other segments such as lending and wealth management are in a relatively nascent stage.

Fintech companies cover diverse segments [and sub-segments] related to the financial services industry such as lending, payments, merchant services, loyalty platforms, lending cryptocurrency, finance management, and banking services. Popular names among these platforms in Nigeria include PiggyBank, Paylater, Kudi.ai and Paga.

Most Fintech startups in Nigeria which are in their early stages of development and operating informal structures are already growing large clientele and earning good returns on investments. This is creating a big concern for incumbent financial institutions who are starting to see them as a threat. It will take a great deal for these institutions to be as efficient as the fintechs, and it will cost them more, in terms of change in traditional perceptions and attitudes.

The ability of Fintechs to significantly lower operating costs by decreasing start-up costs and infrastructure cost via adoption of cloud-based platforms, poses a big threat for incumbent financial institutions thereby increasing pressure on margins.

Fintech companies aren’t mired by legacy issues rising from infrastructure, culture and manpower positions. This allows them to try out new technologies and strategies which provide customers with more irresistible products and services in a much more timely manner.

An increase in focus on the customer is the vantage point that is being taken here. These discerning companies are adopting a customer-centric model to fuel their disruption of the financial service industry. Old players in the financial services industry are meeting this challenge by moving to put financial technology at the heart of their strategy. Leveraging the gaps in the financial industry by being agile, FinTech startups are providing new service offerings that better address customer needs by giving enriched convenience, accessibility and tailored products.

Innovation is the ability to perceive old things in different combinations to create new ways, it demands that you see differently. An internal fortitude to throw away something that has worked bears at the threshold of innovation.

It isn’t a coincidence that the rise of financial technology in Nigeria came alongside an economic crisis. For most, the emergence of these fintech companies brought with it a fresh approach to the world of finances. Nigerian Banks are starting to follow the trend by simplifying operations to improve customer service. Banks are leveraging big data and technology to provide a renewed digital customer experience.

Should Banks fear being phased out by Fintechs?

Financial inclusiveness is still quite low in the region; about 40% of Nigerians are still without a bank account. This is a bit of a worry for both banks and FinTechs.

It’s already evident that every significant industry will be led by a technological company in the next 10 -15 years. So yes, banks may eventually lose relevance on a global scale, and Nigerian FinTechs are adequately playing their role. The most likely resolution meanwhile will be for the banks and fintechs to achieve a sort of balance between themselves. This balance will involve collaborations that can help drive financial inclusion in Nigeria.

Collaborations for mutual benefit exist everywhere, one just has to look out for them. The broad domain knowledge and extensive customer base that banks possess can be merged with the agility, incisive ideas and cost cutting processes that fintechs wield, to bring about mutual benefit to all the parties involved.

Image Credit: IBM

Some of the ways to find balance and also collaborate are:
- Open API’s: Banks can have a forward thinking approach by developing APIs or leveraging existing ones by offering FinTech organizations the use of their API endpoints. With the objectives to increase collaboration, revenue, reach and accelerate innovation.
- Proactive Processes for Regulatory Environment: The banks and their kin have deep insights about their industry’s regulatory environment and how to go about gaining regulatory approval. These financial institutions can develop a systematic due diligence process and in turn advise fintechs to ensure future stability.
- Fostering An Ecosystem mindset: Banks have tremendous value in their mastery of the market, regulatory environment, customer knowledge and agent networks can be opened up for use by fintechs to enable mutual benefit. Access Bank made a strategic decision to open up their APIs for innovative Fintech outfits like Paystack and Flutterwave to launch and increase their reach.
While FinTech startups are disrupting the financial scene, the traditional banks still have a head start. They have a large base of existing customer relationships and funds; all they need do is capitalize on these relationships and their data to create an omni-channel customer experience i.e. individual customer touch-points over a variety of channels that seamlessly connect, then scale.

Concurrently, customer loyalty to Nigerian financial institutions is on the decrease which affords a fluid competitive landscape to new comers. This low barrier for third party entry has been proven by some companies like Paga and Interswitch.

Finance companies that do not have a traditional payment system but have payment experiences powered by network connectivity and a mass of users can gain market share off incumbent finance companies that are slow to adapt.

There is a change in Nigeria’s payment pattern which is driven by mobile smartphone adoption. The mobile-first consumers expect fast, convenient and secure payment platforms.

Artificial intelligence (AI) and robotic process automation is on course to turn the banking ecosystem on its head, disrupting the way people bank and the manner in which institutions deliver financial services. Banks in Nigeria have indicated that they intend to invest more heavily in FinTech to the tune of $3 billion by 2020 according to the Nigerian Fintech Organization.

Most of the commercial banks are already getting in on the action by backing one FinTech platform or the other. So while fintechs may not replace financial institutions, it’s glaring that it is the way of the future.
October 27, 2017
Welcome to ‘Generation Hustle’

I actually like my job, but maybe I have no choice. It’s quite uncommon in present day Nigeria to find a well paying job that you actually enjoy doing and that gives you freedom to pursue your other interests.

Our parents had it much easier. It’s a fact that the 80’s were a pretty good time in Nigeria for employment-after-school hopes. With an unemployment rate of about 9% at the worst, most of our folks from average backgrounds got out of school with no doubt that the system would come through for them, and they were hardly disappointed. My mom for example could easily save to buy a car on her assistant lecturer salary, right after university.

Nowadays it’s difficult to find a job at all and with rising unemployment rates, it gets harder every day. Should you eventually find a semi-decent one, it usually comes with absurd demands. My first official job as a graduate was an 8-5 pm gig, although most times we closed later. I worked on Saturdays as well and took home N30,000 ($83) every month as recompense. Even then, I was considered lucky by some to have found a job ‘so soon after school’. It’s possible I was lucky – In Nigeria, the minimum wage is N18,000/month (about $50) and some private employers pay even less. Teachers are paid just a little over that in private schools and there are medical doctors who have to work several consultancy jobs just to earn up to N100,000 a month.

Nigerian Youth Unemployment 2015-2016. source: tradingeconomics

It’s no wonder so many of us are turning to entrepreneurship. I use entrepreneurship here in the broad sense of the word to cover both business ownership and creative freelancing. With the inflation rates and low average salaries, it’s difficult to survive otherwise. That is, unless you work at Shell, or a government agency like NCC that’s known to pay in millions each month. Anyway, chances are you don’t.

So first and foremost, in Africa -business ownership is a means of survival; usually in the form of trading, artisan-ship and now, e-commerce. Small businesses make up about 80% of Africa’s economy and my guess is that if you’re in Nigeria, at least 3 out of every 5 persons you know are running a business, whether or not they are otherwise employed.

It makes sense that e-commerce is increasingly popular because the internet is making us all more connected.

Social media has effectively stripped the barriers of starting a business down to a simple “my customer may be on your TL” so young people are coming to equate doing business with easy, social media hustles. The ‘retweet economy’ will have you believing you are only a viral tweet away from making your first million or winning a free Mercedes! And maybe it is possible.

The world of work is clearly evolving. Most people have always done business as a means to supplement income or to invest disposable cash but today; younger entrants into the workforce, especially those with adequate financial support find themselves making a choice between full time employment and a series of side hustles.

As someone who is fully employed; who still freelances and runs a small business mainly on the internet, I’m clearly on the fence about the issue. But after asking around, some patterns became clear. Besides survival and apart from a few who have an idea to change the world, there are a few reasons people make this choice. The first is to have control over their time; which almost never happens.

“Reclaiming my time” – Maxine Waters. source: tenor

Another growing phenomenon is the desire to follow passions and inclinations. This isn’t odd when you consider that a good number of African kids go to university and study courses that their parents would approve of but they personally have no interest in. Upon graduation these young adults are facing down career paths they feel the need to escape from. Now that it’s less improbable in this part of the world, a lot of these ones are quitting their desk jobs to pursue dreams in freelance photography, tailoring, web design and other creative skills.

Then there are those who say they cannot put up with routine (or authority). Their dream is to bear the prestigious title of ‘CEO’ and answer to no one.

Lastly, a reason why more people want to start a business is the idea that it’s a ticket to riches. They see wealthy men like Dangote and Otedola and try to pre-empt how many more customers on the Timeline need to buy an Ankara dress or book a make-up session before they too can roll in the riches. Never mind that 80% of small businesses in Nigeria fail after 3 years due to lack of adequate planning and capital. The abundance of ‘sudden’ success stories in popular media make some believe that entrepreneurship is a shortcut.

A number of the above reasons for business ownership often interplay; as was the case last year when I quit a job I didn’t like to start a certain business. Of all my lifestyle experiments, I quickly realized that was the most unreasonable I had made. Maybe it’s the economy; maybe I’m just not courageous or rich enough yet to take that drastic route.

Similarly for a lot of Nigerians like me, the income stability of regular, paid employment is not something they are able to trade. However, it’s still not a matter of choosing employment over business ownership unless the two strongly conflict. For example, you would easily find a practicing lawyer who owns a graphic design business and also drives for Uber.

The hustle is real! And even then, such a person may just be managing to comfortably pay their bills and save towards other purposes.

Whether in it for survival or you’re looking to change the world, these businesses come and go, and they help to keep the economy stable. As they increase in number along with freelance careers, creative gigs and other alternatives to traditional employment, I’m curious to see what sort of noticeable impact ‘generation hustle’ will have on the economy, especially as a lot more traditional jobs continue to disappear globally.

September 22, 2017