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Table of Contents
STARTING A SMALL SCALE BUSINESS............................................ 4 BUSINESS MODELS ................................................................................ 4 BASIC FORMS OF OWNERSHIP .......................................................... 5 REGISTERING YOUR BUSINESS.......................................................... 7 INTRODUCING YOUR BUSINESS TO CLIENTS .............................. 8 HOW DO I GET CLIENTS ...................................................................... 9 CONTENTS OF A COMPANY PROPOSAL ...................................... 11 MAKING VISITORS FEEL WELCOME .............................................. 12 BOOKKEEPING ..................................................................................... 16

STARTING A SMALL SCALE BUSINESS A business can be defined as an organization that provides goods and services to others who want or need them. A small scale business can be said to be one that requires a small amount of capital to establish it, this kind of businesses usually have a small number of employees or in most cases personally handled by the owner. Adapting to change is crucial in business and particularly in small businesses not being tied to and bureaucratic inertia makes it easier to respond to the market place quicker. These proprietors of small scale businesses tend to be intimate with their customers and clients thereby resulting in greater accountability and responsiveness. These kinds of businesses are common in many countries depending on the economic system in operation.

BUSINESS MODELS There is more to deciding on the right business other than settling on the actual product or service you will be producing. Here are a number of other factors that may be a consideration in identifying the right model for your business.

Buy a Franchise vs. Join a Direct Marketing Business vs. Start From Scratch

• •

Home-based vs. Office-based Invent Something New vs. Produce a Product vs. Offer a Service vs. Consult as an Independent Contractor

• • • •

Long Term Commitment vs. Build a Business to Sell Not-for-profit vs. Profit-based Online vs. Physical Business (or Both) Sell Your Product or Service in a Physical Location vs. Contracting Your Goods or Services Out to the Federal or State Government

BASIC FORMS OF OWNERSHIP Although forms of business ownership vary by jurisdiction, there are several common forms: • Sole proprietorship: A sole proprietorship is a for-profit business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has unlimited liability for the debts incurred by the business. • Partnership: A form of for-profit business owned by two or more people. In most forms of partnerships, each partner has unlimited

liability for the debts incurred by the business. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships. • Corporation: A limited liability entity that has a separate legal personality from its members. Corporations can be either privately-owned or government-owned, and privately-owned corporations can be organized either for-profit or not-for-profit. Furthermore, a privately-owned, for-profit corporation can be either privately held or publicly held. A corporation is directed by a board of directors, which hires the business's managerial staff. • Cooperative: Often referred to as a "co-op", a cooperative is a limited liability entity that can be organized for-profit or not-forprofit. A for-profit cooperative differs from a for-profit

corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.

REGISTERING YOUR BUSINESS Once it is decided what form of business you would be starting the next step would be registering your business. It is important to register your business for various important reasons which include: 1. Clients would see you as more responsible and established if you have a company name and a company account 2. It is easier to manage the account of the company once the business is registered 3. You can only have a company bank account when your business is registered 4. No government agencies will deal with a person but would find it easy to deal with a business establishment 5. Once your company begins to grow and expand you will need to file for company tax All businesses in Nigeria are registered at the Corporate Affairs Commission (CAC). The business owner is usually advised to contact a legal practitioner who has an understanding of the charges and what it entails to register a business. Generally it costs about N20,000.00 – N30,000.00 to register a Sole Proprietorship or partnership (what is otherwise called a business name) and about N90,000.00 – N120,000.00

and even more at times to register a limited liability company (i.e. partnership, corporation or co-operative) depending on what the share capital for the business will be. Most companies start with a million shares. The registration process begins with the name search which is legally searching whether the name the business owner has chosen is available or is been used by another business owner. Once this is completed and the name of the business is identified and agreed on the registration begins and takes from 2 weeks to 1 month if it is contracted to a professional. However some business owners find it easy to start and complete the registration process themselves but this is not advisable as the CAC would require certain information that only a lawyer can provide. Also the time for registering the business yourself takes longer than if you had contracted it out but it might cost you less.

INTRODUCING YOUR BUSINESS TO CLIENTS It is important that as a new business you are able to identify who your clients will be and where they can be found. There are different ways of identifying your clients but most important is the fact that as these clients are identified you should be able to introduce your business to your

clients. The introduction should be done in a way that it leaves a good and lasting first impression, so much so that the name of your business will be remembered and you will be contacted for the services you render anytime it’s needed. The best way to get this done is to have at your disposal company sales materials and a good sales pitch that will catch the prospective client’s attention. You could also introduce your business by sending out letters of introduction to prospective clients. Sales materials may include the following: 1. Company business card 2. Company brochure (that shows a general profile of the company) 3. Company handbills or fliers

HOW DO I GET CLIENTS This is one of the major challenges of small business startups. Once you have duly registered your company and have identified your customers then the next question becomes; “how do I get customers?” This has been made somewhat easy with the introduction of a lot social networks and events. Presently most businesses and small business

owners have profile pages on major social media networks such as facebook, twitter, myspace, linkein and even nairaland and nairalist. The possibility of how you can get your clients is endless and in most cases does not cost you much. However the methods of getting clients can include online networking and physical networking. Online networking includes the following: 1. Having a blog that showcases your products and services and educates people about your business 2. Having a profile page on social networks such as facebook, twitter, myspace, linkedin, nairaland 3. Having a company website 4. Subscribing to other peoples blogs and social media pages 5. Listing in online free business listing sites such as nairalist, craiglist and a lot of others Physical networking includes: 1. Letting your friends and family know about your business and asking them for patronage and referrals (maybe even for a commission)

2. Discussing your services at events and giving out company sales materials 3. Exchanging business cards with prospective clients and doing a follow-up 4. Sending out formal proposals to companies and organizations introducing your company and services 5. Attending seminars and conferences that allows you to meet prospective clients

CONTENTS OF A COMPANY PROPOSAL Writing a company proposal must be done by the owner of the business as he/she alone has a concise understanding of the business and how the business would work. However some business owners outsource the writing of the company proposals to consultants that have better knowledge of how it’s done and what clients would expect. When this is done it is advised that the business owner paints a picture of the business to the consultant to avoid a clash of perception. A typical business proposal (or in some cases company profile) will include the following: 1. Cover page

2. Introduction 3. Core values 4. Corporate vision statement 5. Corporate mission 6. Our services (what we do) 7. Our clients 8. Our team 9. Charges

MAKING VISITORS FEEL WELCOME • Keep an appointments book that shows when visitors are expected. Wherever possible make appointments for visitors to discourage unexpected visits. • Design any notice boards (vehicle control board, meeting board, etc.) nicely so that they make the office look more attractive. • You may want to hang a display board showing the organisation’s current activities. This could include photos (with captions) of staff or partners at work, workshops they have attended, and visitors to the office.

Display the organisational structure chart, mission statement and strategic plan if you have them.

Make sure that the reception area, however small it may be, is always clean and tidy.

Take any steps necessary to make the office accessible to disabled people.

BOOKS AND FORMS 1. Telephone messages: Whenever a person calls for someone who is not in the office, the Administrator (or Secretary, if the office has one) should write down the name of the person who called, his or her telephone number, the time and date of the call, and any message. The person who took the message should also sign her name. 2. Appointments book: The appointments book can be a diary or any other calendar that is used only to record appointments. The Administrator or the Secretary should record all the appointments and remind people about them closer to the time.

3. Visitor’s book: The visitor’s book can be a blank book. In it, visitors should sign their name, their organisation’s name, address, telephone number, fax number, email address, and the date of their visit. Some visitors will just give a business card; the Administrator can attach that to the book instead. The Administrator can also write down later with whom that person met, and what was discussed. If the organisation uses a computer, the Administrator can put the visitor’s information in a database or spreadsheet so that the organisation can keep a contact address list.

TELEPHONE MESSAGE FORM For: _______________________________________________________________________ Mr/Mrs/Miss ____________________________________________________called you at __________________________ am/pm on ____________________________ [date] Please call back. Telephone number:___________________ Will call you later. Will visit you. Left a message for you: Prepared by: Name: __________________________________________________________________ Signature:________________________________________________________________ Job title: _________________________________________________________________

BOOKKEEPING Financial records document the operations of a business. Financial records are an extremely important tool for managing the inflows and outflows of a business activity. There are certain required records that must be maintained to satisfy the Internal Revenue Service for income tax reporting, however, the need for good record keeping goes beyond the IRS. Information that is specific to your business should be documented in an organized manner. This will enable you to efficiently and effectively

manage your business. If adequate records are kept, peaks and dips in sales are easily determined, cash needs for payroll or outstanding bills are easily counted, and inventory can be properly controlled. The simplicity or complexity of the record keeping system is dependent on your personal preference and the needs of the business. For example, an accounting system can be as simple as a 3-ring notebook or as complex as an entire computerized system. No two sets of financial records are the same. However, the basic format includes: 1. A Cash Payments Journal (checkbook register) 2. A Cash Receipts Journal (receipts book) 3. A Sales Journal 4. An Accounts Receivable Journal 5. An Accounts Payable Journal 6. A General Journal There is also the need to have a financial statement for the company to show the growth rate and the prospect of the business. The financial plan is also used to plan the future of the company over a period of years and

how many clients the business expects to get within a certain period of time. The standard financial statements include: 1. A Balance Sheet 2. An Income Statement 3. A Statement of Owner’s Equity 4. A Statement of Cash Flows The accounting vocabulary can be overwhelming at times. A “journal” is nothing more than a diary or logbook. The purpose of the diary is to keep track of similar type transaction items in a separate book. For example, in the Sales Journal, you keep track of all your sales in the same diary, which is separate from your check register called the “Cash Disbursements” Journal.

LEDGER BOOKKEEPING TYPE OF JOURNAL Cash disbursements journal HOW IT IS USED Cheque book register records money spent Cash receipts journal Receipt book records money received

Sales journal

Record invoices when sale is final not dependent on cash received

Accounts receivable journal

Detailed listing of customers to whom you sold merchandise on credit

Accounts payable journal

Detailed listing of vendors from whom you bought merchandise on credit

General journal

Master file, records all


entries and transactions from each journal

CASH DISBURSEMENTS JOURNAL Date Purpose Amount Collected by Disburse d by 10/10/200 money spent 9 in purchase of materials for chair covers 12/10/200 sewing of 300 Solace The 15,000.00 Mrs. Aiyelabola Manager Sign

9 chair covers 13-10- Transportation 2009 to Lagos Island (Idumota market for supplies


Fashion Sola

Manager The Manager


CASH RECEIPTS JOURNAL Date Purpose Amount Recieved by 17-102009 decoration of venue for a wedding The 70,000.00 Manager The Bride to be (Miss Davids) 17-102009 18-102009 Rental of 500 chair covers retal of bridal chair 3,500.00 The 50,000.00 Manager The Manager Deji Shobanjo Deji Shobanjo Paid by Sign

SALES JOURNAL Date Product Amount client Payment method 17-102009 decoration of venue for a wedding 17-102009 18-102009 18-102009 Rental of 500 chair covers retal of bridal chair decoration of venue for a company end of year party 3,500.00 50,000.00 70,000.00 The Bride to be (Miss Davids) Deji Shobanjo Deji Shobanjo Emzor, 100,000.00 Isolo cheque cash cash cash Sign

ACCOUNTS RECEIVABLE JOURNAL Date Product Amount Receivable 25-10-2009 rental decoration materials 11/11/2009 rental of 300 chair covers 20,000.00 Lanre (empress evnts) 25,000.00 Mr. Smith Client Sign


GENERAL JOURNAL Date Product Amount Client Mrs. 15,000.00 Aiyelabola Comment Paid in full Sign

10/10/2009 money spent in purchase of materials for chair covers 12/10/2009 sewing of 300 chair covers 13-10- Transportation to 2009 Lagos Island (Idumota market) 800.00 5,000.00

Solace Fashion Sola

Paid in full for supplies

17-10- decoration of 2009 venue for a wedding 17-10- Rental of 500 chair 2009 covers 18-10- rental of bridal 2009 chair 3,500.00 50,000.00 70,000.00

The Bride to be (Miss Davids) Deji Shobanjo Deji Shobanjo




17-10- decoration of 2009 venue for a wedding 70,000.00

The Bride to be (Miss Davids)

Cash deposited in bank account

17-10- Rental of 500 chair 2009 covers 50,000.00

Deji Shobanjo

Cash deposited in bank account

18-10- retal of bridal chair 2009 18-10- decoration of 2009 venue for a company end of year party 100,000.00 3,500.00

Deji Shobanjo Emzor, Isolo



25-10- rental decoration 2009 materials 11/11/2009 rental of 300 chair covers 20,000.00 25,000.00

Mr. Smith

Paid 27,000.00

Lanre (empress evnts)

Paid 30,000.00

[Your company slogan] Date[Enter a date] Invoice #[100] [Your Company Name] [Street Address] [City, ST ZIP Code Phone[000-000-0000] Fax [000-000-0000] [e-mail] TO [Name] [Company Name] [Street Address] [City, ST ZIP Code] Phone [000-000-0000] Customer ID [ABC123]



Payment Terms

Due Date

Due on receipt
Qty Description Unit Price Line Total

Subtotal Sales Tax Total

Make all checks payable to [Your Company Name]

Thank you for your business!

Receipt No.:1001 Paid by: Paid to:






Received by:

Receipt No.:1002 Paid by: Paid to:






Received by:

Receipt No.:1003 Paid by: Paid to:





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