N50M CHALLENGE: NO TO SHORT TERM, NAIRA BASED INVESTMENT-MY BILLIONAIRE FRIEND

I had thrown the challenge on the LLS platform, of asking interested members to share how they would invest a hypothetical N50 million naira to generate good returns within a 12- month period.

Eight submissions came in within the time stipulated.  I decided to share the submissions with my billionaire friend, a notable investor in real estate, art, stocks, gold and other instruments , to comment on the submissions received and share his own opinion with me.  His opening submission was that:

His general counsel is that :”any investment in naira- denominated instruments at this time of Nigeria’s meta stable economy should be treated with care”. He also cautioned against short term investment, but would rather advise on putting money in proven capital gain investments of a three -year window. He advised against investments in Non capital guaranteed vehicles and speculative  investments. He opines that:  “optimum returns, are highly available within a  3-year (max) window, within Nigeria’s  proven property market, in   capital gains and returns. Nigeria’s property market, is currently  in an investors buyer’s  market. 

 According to him: “Generally, an investment of say, 60% of the 50 million Naira should  be invested in land with Government  C of O in one of the  proven good and prime locations of Lagos lands. Given the generally low availability of people’s good purchasing power,  fixed assets such as this,  are being offered for  distress sale. Hence, investors are advised to take advantage of the high returns that would result from the  purchase of these, such  currently available distress properties, for investment.  Plentiful number of such assets,  are currently being sold and purchased by investors,  at prices far below their current values, with an eye on a maximum of 3 year- investment window. I recommend putting 30 of the 50 million Naira in purchasing   such distressed properties, with a view to  making optimum returns . 

I would also invest in artworks that  have the  potential of yielding good returns ( subject to good advice, based on good knowledge of artworks and their market. I would put 8, of the balance 20 million Naira in this investment. 

The next would be gold coins .

So proportionately I would allocate the N50m this way:

N30m on fixed assets in buying for investment in the purchase of  distressed property of  traditionally  and proven and highly marketable location of Lagos lands.

N 8 million Naira  in Artworks  and 

N 4 million Naira in choice gold coins of  different varieties and 8 million Naira in Corporate Euro Bonds”.

QUOTE

“Any investment in naira- denominated instruments at this time of Nigeria’s meta stable economy should be treated with care”.

N50 M CHALLENGE:  I CAN BRING IN N110M IN 12 MONTHS

Few of the submissions caught our attention and we decided to pick on few of them, including the submission below from Abiola Kabir, an ICT entrepreneur who says he can turn around the N50million in 12 months to generate a net profit of N110 million. Read his submissions below:

Project Title: SimpleBOOK – Empowering SMEs for Growth

1. Where to Invest the Money?

We propose to invest the N50 million in the development and scaling of our innovative SaaS platform, SimpleBOOK. This investment will be used to accelerate the growth and adoption of SimpleBOOK among SMEs in Nigeria and beyond.

1. OVERVIEW of SimpleBOOK

SimpleBOOK is a revolutionary SaaS platform designed to simplify and automate bookkeeping and business management for Small and Medium-sized Enterprises (SMEs). As the Founder and Expert Product Developer behind SimpleBOOK, we have crafted an all-in-one solution that empowers businesses to efficiently manage their finances, streamline operations, enhance customer relationships, and grow their online presence. SimpleBOOK offers an integrated suite of tools, including Inventory Management, Invoice Automation, Digital Receipts, Accounting, eShop, and Customer Relationship Management (CRM) system.

This comprehensive solution is designed to empower businesses with the tools they need to streamline their operations, enhance efficiency, and gain better control over their financial health.

• PROBLEM STATEMENT

SMEs face numerous challenges in managing their finances efficiently. These include:

• Lack of affordable and user-friendly financial management tools.
• Difficulty in maintaining accurate inventory records.
• Time-consuming and error-prone manual invoice generation.
• Limited access to real-time financial insights.
• Inefficient paper-based record-keeping.

• Mission Statement

Our mission is to empower SMEs with the financial tools and insights they need to succeed in an increasingly competitive business landscape. We are committed to simplifying complex financial processes, fostering sustainability, and enabling businesses to thrive. Through innovation and accessibility, we aim to transform how SMEs manage their finances, ultimately driving economic growth and prosperity.

• MARKET OVERVIEW

The SME sector plays a pivotal role in the global economy, contributing significantly to job creation and economic growth. In many countries, SMEs constitute over 90% of all businesses. However, these businesses often struggle with bookkeeping and financial management due to limited resources and expertise.

Market Statistics:

• Nigeria has the largest population in Africa, with over 211 million people. Over 70% of the population is under the age of 30, providing a large and growing pool of entrepreneurs and workers.
• According to NBS, there are over 41 million SMEs in Nigeria.
• The internet and mobile phones are becoming increasingly accessible in Nigeria, which is helping businesses to reach new customers and markets
• According to a survey, 45% of SMEs cite financial management as a major challenge.
• The SaaS market is growing at a CAGR of 16%, with a projected market size of $157 billion by 2023.

SimpleBOOK addresses this growing need for efficient financial management tools for SMEs and taps into a substantial market opportunity.

2. Step-by-Step Strategy:

• PROJECT EXECUTION TIME

a. Product Development and Enhancement (Months 1-3):

• Allocate a portion of the investment for product development and feature enhancement.
• Hire additional software developers and designers to expedite development.
• Conduct market research to identify specific needs and preferences of Nigerian SMEs.
• Integrate AI-driven features for improved automation and analytics.

b. Marketing and Customer Acquisition (Months 4-6):

• Launch a comprehensive marketing campaign targeting SMEs.
• Develop partnerships with business associations and chambers of commerce.
• Offer free trials and exclusive discounts to incentivize adoption.
• Conduct webinars and training sessions to educate SMEs on the benefits of SimpleBOOK.

c. Scaling Operations (Months 7-9):

• Establish a dedicated customer support team for onboarding and assistance.
• Expand server infrastructure to ensure scalability and reliability.
• Continue marketing efforts to penetrate the SME market deeper.
• Launch a referral program to encourage user-generated growth.

d. Monetization and Revenue Generation (Months 10-12):

• Implement subscription pricing plans for SMEs based on usage levels.
• Explore partnerships with financial institutions to offer integrated financial services.
• Introduce a premium version with advanced features.
• Leverage the eShop functionality to generate additional revenue through transaction fees.

• MARKETING STRATEGY

I am excited to share our comprehensive marketing strategy for SimpleBOOK, a platform that I passionately believe will revolutionize the way SMEs manage their finances and operations.

1. Understanding Our Audience: Our first step is to understand and segment our target market within the SME sector. This helps us tailor our efforts to meet their specific needs, whether they’re in retail, manufacturing, or service industries, and whether they’re located in Lagos, Kano, or anywhere in between.

2. Building a Memorable Brand: SimpleBOOK’s success begins with its brand. We’re focused on creating a strong and memorable identity, one that emphasizes our platform’s ease of use, automation capabilities, and undeniable value. We want SMEs to think of us as their trusted partner in business management.

3. Establishing a Strong Online Presence: Our website and mobile app are central to our strategy. We’ve invested heavily to ensure they’re user-friendly, SEO-optimized, and accessible on all devices. Our goal is to engage visitors through compelling visuals, intuitive navigation, and crystal-clear messaging.

4. Delivering Value through Content: We believe in educating our audience. Through blogs, whitepapers, webinars, and video tutorials, we’ll share high-quality content that addresses the challenges SMEs face. Our goal is to become a go-to resource for them.

5. Engaging on Social Media: We’re actively engaging on social media platforms, like LinkedIn, Facebook, and Twitter. Expect to see valuable content, customer success stories, and industry insights. Plus, we’ll use targeted ads to reach the right audiences at the right time.

6. Nurturing through Email: Our email campaigns will keep our audience informed and engaged. We’ll share product updates, efficient bookkeeping tips, and exclusive offers. Our aim is to personalize these emails to resonate with each recipient.

7. Partnering with Influencers: We’re exploring collaborations with SME influencers and industry experts. Their endorsement can significantly impact our reputation and credibility.

8. Encouraging Referrals: We’re launching a referral program that rewards our existing users for spreading the word about SimpleBOOK. This will help us grow our user base while showing our appreciation for our customers’ loyalty.

9. Exceptional Customer Support: Customer support is paramount. We’re committed to resolving issues promptly and offering resources to help our users get the most from SimpleBOOK.

10. Strategic Alliances: Partnerships with business associations, chambers of commerce, and financial institutions are on the horizon. Together, we’ll provide even more value to SMEs.

11. Continuous Improvement: User feedback is invaluable. We’ll actively seek it out to make ongoing improvements to SimpleBOOK based on your suggestions and emerging trends.

12. Localized Approach: Our strategy is flexible enough to adapt to specific regions and languages within Nigeria and our other target markets. We want our messages to resonate with local preferences and needs.

13. Showcasing Success Stories: We’re excited to highlight the successes of SMEs using SimpleBOOK. Their stories, shared through case studies, testimonials, and interviews, will inspire others to join our platform.

14. Staying Ahead: Finally, we’re committed to staying ahead of the curve. We’ll closely monitor the competition and ensure we offer unique features and unmatched customer service.

With this marketing strategy, we’re confident that SimpleBOOK will effectively reach and empower SMEs, ensuring its success in the market and driving sustainable growth.

• BUDGET DISTRIBUTION – Start Budget: N50Million

Here is a breakdown of the initial budget allocation:

1. Development and Infrastructure (36%): N18 Million

• Software development and engineering; Cloud infrastructure setup and maintenance and Data security and compliance measures.

2. Marketing and User Acquisition (30%): N15 Million

• Digital marketing campaigns; Social media advertising and Traditional Marketing and Affiliate Partner Network Development and other Business development activities.

3. Sales, Operations and Support (24%): N12 Million

• Hiring and training of customer support staff; Provision Sales team salaries and incentives; and Office space and utilities as well as Legal expenses.

4. Research and Development (5%): N2.5 Million

• Continuous improvement of features and functionalities; User feedback analysis and Innovation and adaptation to market trends.

5. Contingency Fund and Miscellaneous Expenses (5%): N2.5 Million

• To cover unforeseen expenses or emergencies.

With this budget allocation, I will have the resources needed to develop, launch, and sustain SimpleBOOK while allowing for growth and adaptation to market demands.

3. Expected Return on Investment (ROI):

H. REVENUE PROJECTION

We anticipate a significant ROI from this investment in SimpleBOOK. The revenue projection is based on the following assumptions:

• Initial user acquisition of 5,000 SMEs within the first year.
• Average monthly subscription fee per SME: N2,500.
• Expected annual growth rate of 30% in user acquisition.

Year 1:

• Total Revenue (5,000 SMEs * 6 months * N5,000) = N150 million.
• Operating Expenses = N40 million (including development, marketing, and operational costs).
• Net Profit = N110 million.

Growth projection

• We had project subscription of about 10,000 SMEs over 3years.

Conclusion:

Our strategic investment in SimpleBOOK is expected to yield a substantial return, reaching about N427 million in net profit by the end of Year 3. This proposal aligns with the core mission of SimpleBOOK – to empower SMEs through simplification and automation, ultimately fostering economic growth and resilience in the SME sector. We are confident that this investment will not only generate attractive returns but also positively impact the Nigerian business landscape by supporting SMEs in their journey to success.

QUOTE

“SimpleBOOK is a revolutionary SaaS platform designed to simplify and automate bookkeeping and business management for Small and Medium-sized Enterprises (SMEs”).

CAVEAT: Please note that none of the investment opinions expressed in the two propositions above represent those of THISDAY NEWSPAPERS and THISDAY LIFE LESSONS. Readers interested in experimenting with any of them are advised to consult their investment experts .