gbemi qoute 02.wav

Starting a business but concerned about capital? All you need is the right strategy and great support.

Gbemi Olateru-Olagbegi, Founder of Gbemisoke Shoes & Co-Founder of TNC Africa and Vanessa Nwuka, Founder of VeeStore shared practical steps to getting started with limited capital.

Gbemi Olateru-Olagbegi

As you go along, you will figure out what works for you. You’re going to make mistakes and you will learn from those mistakes. Look around you, use the people around you. Is there a friend that studied marketing or advertising or works at an agency? Reach out to them for help. You don’t know everything and you can’t do everything yourself

Vanessa Nwuka

Before you take a loan, you have to have your books ready from day one. Your accounting has to be good so they know that you’re serious and they can lend you the amount of money you’re asking for. Be disciplined. If you cannot repay at the date you agreed, you have to communicate with your lenders early enough. It is really important because trust is key.

Getting Started with Limited Capital

ore qoute 02.wav

The first conversation in our Business Guide Series brought to you by Brass Business Club.

Damilola Odufuwa, Co-Founder and CEO of Backdrop and Ore Runsewe, Founder of Arami Essentials, spoke to us about their journeys getting started in business.

Damilola Odufuwa

One of the things our team did that I really loved early on was reaching out to the first users to get their feedback on the app and one of those users helped us create our backdrop near you feature… I would always suggest to anyone building an app to speak to your first set of early users.

Ore Runsewe

If I had to give anybody advice, if you have a 9-5 and you have a business on the side, try and do it for as long as you can. There comes a time where it’s not possible anymore and you have to respect that but where it’s still possible, I think still do it.

Starting Your Own Business

With Christmas comes more shopping 🎄

As a business owner, it's only natural that you're always looking for ways to increase sales. This includes recognising opportunities you can take advantage of in your everyday life.

Every year, from November until mid-January, millions of businesses worldwide take advantage of the festive season to boost their sales and in turn, generate more profit.

The festive season has transcended beyond being just a time to celebrate with family and friends but also a time to make huge profit.

Ready to boost your business sales during this festive season? Here are our top 4 tips:

 **Offer special discounts**

There's no better time to offer product discounts than during the Christmas holidays. In this season of happiness and gift shopping, many customers look forward to shopping from businesses that offer discount sales. This is also a great time to run a clearance sale if you run a retail business to prepare for a new year and also offer rewards to your customers.

**Personalise your brand marketing**

As a business owner during the holiday season, you need to position your brand marketing in a way that connects with your target audience. That way, you can easily develop strategies to attract customers and encourage them to buy what you are selling. Marketing strategies for young adults are usually different from strategies for children. Therefore, we recommend conducting an audience check in order to create  personalised messages better suited to your audiences needs. 

**Offer free shipping**

According to [this](https://savemycent.com/free-shipping-statistics/) article, 73% of people are more likely to buy an item if it includes free shipping and companies with free shipping have a 20% higher conversion rate than those without this option. In a season where many businesses are positioning to boost sales, you want your business to stand out, and offering free shipping can give you that edge.

**Improve the buying experience**

More than ever, this is the season to make it extremely easy for your customers to find you. If you run a bakery in Magodo, your store should be on the first google page when your potential customer searches “Bakery in Magodo”, and after they find you, you want to ensure that the whole buying experience is done swiftly and efficiently. Once you hack this, retaining your customers will be a piece of cake.

N:B: Read [this](https://digitalmarketinginstitute.com/blog/7-ways-to-increase-sales-using-seo) article to know more about how to increase sales using SEO.

### Conclusion

The festive season is the perfect time to get your business noticed, especially if you’re a small business. Beyond making sales, it’s also an excellent opportunity to create and retain a customer base.

Additionally, because the holiday also signifies new beginnings, you can take advantage of this special season to register your business using [Launchpad](https://www.trybrass.com/launchpad/) and get a current account provisioned for you from the comfort of your home.

Ready to boost your business sales during this festive season? Here are our top 4 tips we think you may find helpful.

Boost Sales Festive.png

4 Ways You Can Boost Sales During The Festive Season

The importance of auditing for compliance or accountability reasons cannot be overemphasised. Contrary to popular belief, audits are important to all companies, big or small. Entrepreneurs who want to know if their books are in order should check their company's accounts at least once a year.

### What is an Audit?

An audit is an official inspection of an organisation’s account, typically by an independent body. The two major types of audits are:

 Internal Audit: This type of audit is usually conducted by an in-house auditor/accountant or a third-party auditor as contracted by the company.

 External Audit: This is conducted by a third party auditor who works for an independent accounting firm or a Certified Public Accounting (CPA) firm.

For the purpose of this article, we will be focusing on **Internal Audits** and why it is important for your business.

### Definition

Before we begin, let’s take a quick dive into what an internal audit means.

[Investopedia](https://www.investopedia.com/terms/i/internalaudit.asp) defines an internal audit as the process of evaluating a company’s internal controls, including its corporate governance and accounting processes.

Another definition of an internal audit says it reviews and evaluates current processes, looks for areas of risk, and helps you make sure that financial and operational information is accurate and reliable. 

### Types of Internal Audits

 **Compliance Audit**: This type of audit examines if the company is adhering to the governing laws of the system in which they operate.

 **Financial Audit**: This examines the accounting, recording, and reporting of financial transactions, as well as reviewing the adequacy of internal controls.

 **Operational Audit**: This focuses on the internal controls of key processes, procedures, or systems to improve productivity and efficiency.

 **Information Technology Audit**: This type of audit assess the information technology  systems of a company and how these systems are used.

### Why an Internal Audit is good for your business

 **Risk Assessment**: By conducting regular internal audits, you increase your chances of identifying and minimising the risk of fraud, theft or resource misuse in your company.

 **Ensure Compliance**: Internal auditing ensures your business stays compliant with the laws, regulations, standards, and ethical practices that apply to your organisation and industry. We published an article that explained a bit as to why audits are a requirement for compliance. Read [here](https://www.trybrass.com/guides/nigerian-business/compliance).

**More Insight**: You get more useful insights into your company's policies/procedures when you conduct internal audits. It also helps identify recurring issues, which will ultimately improve effectiveness and organisational success.

 **Improves Accountability**: Whether it’s to your business board directors, investors or even employees, accountability is a trait every business owner should possess. When you conduct regular audits, you are promoting accountability by ensuring the availability of verifiable information on how the company is being managed.

### Internal Audit Process

To conduct a successful internal audit for your business, follow these four step process which we’ve summarised below:

 **Planning**: This is when you determine the scope, objectives and goals of the audit. You do this by reviewing the last audit report, setting a budget and a timeline. It is also at this stage that the audit execution plan is created.
 
 **Fieldwork**: It is at this stage that the audit execution plan is set in motion and the actual work begins. This includes interviewing key stakeholders to shed more light into the company’s process and controls, reviewing relevant documents and data, testing the controls for a sample over a period of time, documenting the work performed, and identifying risks and providing recommendations.
 
 **Report**: An internal audit report will be drafted at this stage containing results from the fieldwork. This report should be clearly written to avoid miscommunication or ambiguity and shared with the relevant stakeholders.
 
 **Review/Follow-up**: This is the final stage of the auditing process and it is to ensure that the recommendations provided in the reporting stage have been implemented.
 
 ### 3 mistakes to avoid during an internal audit process

**Lack of proper planning**: To conclude a successful audit, you need to properly plan and define your goals. This is to make sure that the team is well prepared for any issues and can respond quickly, and efficiently. 

**Insufficient amount of data**: Always ask questions and get the data you need for your audit. Work with your data team to ensure the data being used is accurate and has not been tampered with.

**Poor stakeholder communication**: To get the most out of the internal audit process, all stakeholders should be involved early and throughout the process to give more context into organisational processes.

### Conclusion

Internal auditing is more than just a compliance requirement. It is required to assist you in anticipating potential problems and identifying possible areas for improvement. Internal auditing is a necessary component of business growth when done correctly.

The importance of auditing for compliance or accountability reasons cannot be overemphasised. In this article, we explain the importance of internal audits and how to conduct one. 

Internal audit.png

How to conduct an Internal Audit For Your Business

Imagine an ecosystem where there is no governing business operation standard. Chaotic right?

To avoid this happening or at the very least, reducing its occurrence, there are compliance checks every business must subject themselves to. These checks may vary between different countries, but for the purpose of this article, we will be focusing on business compliance in Nigeria.

When we talk about business compliance, it goes beyond the documents and statutory checks  needed for business approval. It is also about how employees should be treated and compensated, how decisions are made in an organisation, how customers and business data are handled etc. Business compliance is an essential position every company should strive to attain. 


## Definition

Business compliance is the process of making sure your company and employees follow all laws, regulations, standards, and ethical practices that apply to your organisation and industry.

It is also a requirement of all organisations that want their business activities to be approved by their government and investors. With effective management of these processes, businesses can reduce excessive costs, improve margins and increase profitability over time.

The purpose of compliance is to ensure that an organisation’s policy, procedures and actions are in accordance with the law and in compliance with regulatory requirements.

## Why is business compliance important?

The importance of business compliance are highlighted below:

- To protect your business from fines, lawsuits and reputation damage that may have otherwise been caused through violation of rules.

- To stay legally compliant with the governing laws of the land your business operates in.

- Protects your business from risk and liability by preventing events that can negatively affect your business operations.

- Enables swift decision making in matters that regards to ethics, values, code of conduct and policies.

## Why does compliance matter?

 **To build a good reputation** 
 
 By staying compliant as a business, you aren't only showing the governing authorities that you are fit and veritable to run the business, but also assuring your customers that they can do business with you. It has been said that the success of your business depends highly on it’s public image. If your business is constantly facing legal issues, people will lose trust in the business, which will then lead to low revenue and profits.

 **To avoid civil and criminal sanctions**
 
 This is the most beneficial importance of compliance. No business wants to be on the receiving end of criminal sanctions for not adhering to the law. To avoid this, businesses are advised to have a compliance department to monitor all compliance-related matters.

 **Higher productivity in the company**
 
 Compliance helps you avoid waste, fraud, abuse, discrimination, and other practices that disrupt operations and put your company at risk. It also creates strong business models and an environment where employees feel safe and secure to work in. Also, better decisions are made from management, down to the employees.
 
 ## Categories of Compliance

Compliance can be divided into two different types:

 **Internal Compliance**- This refers to the measures a company takes within its own business to set a standard and maintain a certain level of quality. Simply put, internal compliance means compliance within a company.

Internal requirements for compliance-

- Physical entrance policies
- Virtual Access
- Password protection
- Security update
- Emergency response
- Risk Analysis
- Audits and reviews

 **External Compliance**- This refers to the measures a company takes to remain compliant with state and federal laws. Simply put, external compliance means compliance outside your company.

External requirements for compliance-

- Annual statements or reports
- Taxation
- Pension and other statutory employer contributions
- Labour standard Acts
- Business Licenses/Permits
- Employer Identification Number, or EIN


Below are the various business compliance according to Companies and Allied Matters Act 2020 (CAMA 2020)

- Incorporation of Companies & Annual Returns
- [Taxation](https://www.trybrass.com/guides/running-a-business/guide-to-business-tax)
- Employee Compensation Scheme
- Industrial training fund
- Nigerian Immigration Service (NIS)- where applicable
- Financial Reporting Council (FRC)
- [Special Control Unit Against Money Laundering (SCUML)](https://www.trybrass.com/guides/nigerian-business/what-is-a-scuml-certificate)


## How to ensure compliance
**Involve Legal Practitioners**

To avoid unintentionally breaking laws, it is advisable that you involve legal practitioners or even consultants to periodically check through and ensure that your business remains compliant. This is particularly important for small and growing businesses.

**Stay up to date with changing laws and regulation**

The compliance laws are always changing. As a business, it is important that you stay on top of this to monitor and identify that which your business needs to work on, without delay.

**Ensure employees follow procedure**

These policies should be well communicated to the workforce by the management. There is no point having a company policy if it won’t be followed by employees. Leadership should put structure in place to ensure that the employees stay compliant to these policies.

## Conclusion

Companies face the risk of being sanctioned by the governing authorities if they fail to comply with these various requirements. These sanctions could be huge fines which may negatively  impact the cashflow or revenue of the company or could also affect the brand identity of the business. It is important that companies that operate in Nigeria stay compliant to the governing authorities requirements. 

We advise that beyond following the steps in this article, you should speak with your legal partner to ensure that there are no loose ends.

At the end of this article, you will know what business compliance is, its importance and why it matters to you as a business owner.

compliance-documents.png

What is Compliance and why does it matter to Nigerian Businesses

There are many considerations to make before entering into a business partnership. These considerations include legal advice, tax implications, and personal and business experience. By the end of this article, you'll have known what a business partnership is, the types and benefits of a business partnership and things to consider before entering into a business partnership.

### Definition

[Entrepreneur.com](http://entrepreneur.com/) defines a business partnership as a legal form of business operation between two or more individuals who share management and profit. Another definition of a partnership is a type of business where persons agree to carry on a business in common with a view of sharing profit. The agreement for partnership does not have to be in writing before it can exist. However, documenting agreements is more beneficial in business relationships.

### Types of Business Partnerships

 **General Partnership:** A General partnership is the easiest kind of partnership to establish as there are no formal registration requirements or compliance hurdles involved. The partners agree on the terms of the partnership, and there is no limitation to each partner’s liability under a general partnership. Where parties do not agree otherwise, the partnership will be dissolved upon the death or bankruptcy of a partner. It is also important to note that under the Nigerian law, there is no formal requirement to set up a partnership business.

 **Limited Partnership:** These partnerships are formal business entities authorised by the state. They have at least one general partner fully responsible for the operation of the business and one or more limited partners who contribute capital but do not actively manage the business. Limited partners share the company's profits but can only lose as much as they have invested in the business. Limited partners invest in the business for financial returns and are not responsible for its debts and liabilities beyond the capital contribution made into the business.

 **Limited Liability Partnership (LLP)**: An LLP is a body corporate formed and incorporated as a legal entity separate from the partners. The aim of an LLP is to reduce legal liability on the partners by identifying the LLP as a legal personality. 

Read more on types of business partnerships in Nigeria [here](https://www.mondaq.com/nigeria/corporate-and-company-law/1142692/registration-of-limited-partnerships-in-nigeria-under-cama-2020).

### 5 Things to Consider Before Entering Into A Business Partnership.

Entering into a business partnership can be one of the most rewarding, satisfying and exciting experiences you could ever have. There are so many benefits, some include- more capital to grow the business, sharing of workload/responsibilities, better decision making processes, access to skills and experience.  However, before entering into a business partnership, it is essential to think about the risks and responsibilities carefully. Here are some things to consider before entering into a business partnership

 **Value alignment is vital:** It is common for people to compare a business partnership with marriage. This is because business partners should be compatible. They should be an agreement on the non-negotiables of the partnership and a commitment to communication between both businesses.

**Determine the roles and responsibilities of each partner:** The expectations from both partners should be made clear at the beginning. It is best to outline what each partner will contribute in terms of time, money and responsibilities. Doing this can help avoid problems that may arise in the future.

 **Decide on the type of partnership to be used:** You will need to decide on your partnership's legal business structure, i.e. what kind of partnership to be used. Refer above to learn about the various types of partnerships and which will work best for your business.

 **Decide how partnership dissolution will be handled:** Make a plan for how the partnership should be dissolved if it has run its cause or is simply no longer mutually beneficial. This is totally fine as even the best business partnerships come to an end. In the plan, decide how compensation and the finance-related issues will be resolved in that instance.

 **Consult with a legal practitioner**: A solid business partnership is backed by a written agreement. It is not enough to verbally agree. Partners should be able to resolve any issues that arise by referring to the written agreement. An attorney can help you work out an agreement that both parties understand and agree to. It may feel tedious at first, but taking this extra step is the best way to protect the interests of both partners and do what's best for the business.

### Conclusion

Although your business stands a lot to gain from a business partnership, it could also be a decision that could negatively impact your business if not well thought out. We advise you to consult a legal practitioner before entering into a business partnership.

At the end of this article, you'll have known what a business partnership is, the types and benefits of a business partnership and things to consider before entering into a business partnership.

web-banner---business-partnerships.png

Five things to consider before entering into a business partnership

Most consumers know VAT as that extra payment they have to make for a item or service purchased, for business owners however, it is more of a legal concern. This article will shed more light into what a VAT is and what you should know about it as a business owner.

### Definition

Value Added Tax (VAT) is a tax levied on an item (subsequent use of an item in this article will mean “a vatable item”). It is based on consumption rather than income meaning that a VAT is charged equally on every purchase of an item. VAT percent rate varies between countries. 

For Nigeria, a 7.5% rate is charged on all goods and services provided within Nigeria to a person in Nigeria or provided outside Nigeria (imported goods or services) to a person or business registered in Nigeria. This law was implemented on 1 February, 2020 under the new finance act.

As a business owner registered in Nigeria, it is important to charge VAT in order to stay compliant with the law.

### Who needs to register for VAT?

A taxable person shall upon commencement of business register with the FIRS and failure to register within the period specified is liable to pay a penalty of 50,000 for the first month, and 25,000 for each subsequent month. This was stated in Section 8 of the Value Added Tax Act which was amended by the Finance Act 2020. Certain goods and services are exempted and they are-

- Baby products.
- Medical services
- All exports
- Books and educational materials
- Basic food item
- Fertiliser and farming machinery
- Charitable fund raising
- Selling or letting commercial properties
- Insurance and finance services
- Postage stamps
- All medical and pharmaceutical products etc

### How to register for VAT in Nigeria

Go to the [FIRS website](https://firs.gov.ng) and select an office that is close-by your location. Take these documents along with you to ensure a smooth registration process:

If your business is only a registered business name-

- Business name registration certificate
- Utility bill
- Filled and officially stamped VAT form
- Application letter on business letter-headed paper

If your business is a limited liability company-

- Memorandum and articles of association
- Certificate of incorporation CAC2, CAC7
- Utility bill
- Duly filled and officially stamped VAT form
- Application letter on company letter-headed paper

### VAT Collection & Remittance

The law in Nigeria requires that VAT returns are filed on a monthly basis on [Form 002](https://www.firs.gov.ng/wp-content/uploads/2020/10/VAT-FORM-2.0.pdf). This is due on the 21st of the month following the reporting period. Any VAT due should also be paid by this date. This should be done through a payment or transfer from an approved bank. Returns may be filed online as well as by paper.

A return must be accompanied with a listing of all VATable supplies received and provided.

Failure to file a return may incur a fine of NGN 5,000 per month. Failure to remit any VAT due will incur a fine equal to 5% of the liability, plus interest.

### Penalty for Non-deduction of VAT

Non-deduction/failure to collect tax by a taxable person attracts a penalty of 150% of the uncollected tax plus 5% interest above the CBN's rediscount rate.

### How do I file VAT return in Nigeria?

**Step 1**: Go over your accounts. Before filing your VAT returns, you need to go over your business' financial records for the duration you will remit tax.

**Step 2:** [Login to TaxPro Max](https://taxpromax.firs.gov.ng/)

**Step 3**: Select Taxes Due

**Step 4:** Select a payment method and pay

### Conclusion

It is absolutely free to register for VAT and you do not need to employ the services of a third party to help you register. Staying VAT compliant is in the best interest of your business. 

For more information, read [this](https://firs.gov.ng/value-added-tax-vat-faq/)

**NB**- As at the 1st of April, 2022, Google and Facebook also began charging 7.5% VAT on all taxable goods and services due to new regulation from Nigeria. More information [here.](https://www.thenicheng.com/google-joins-facebook-charges-7-5-vat-on-nigerian-adverts/)

Learn how to register for VAT in Nigeria 

A new community for enterprising Africans everywhere

New events with expert guests, stories and resources you need for business success on the continent.

Our business guide series with expert guests, stories and best practices on doing business in Africa.

Getting Started with Limited Capital

Gbemi Olateru-Olagbegi Co-Founder, TNC Africa

Vanessa Nwuka Founder, VeeStore

Listen to the recording here

Gbemi Olateru-Olagbegi

Listen to the recording here

Go further with resources to help you grow

Download our sme guide for new businesses

What it means to be a part of our community

Business resources

Dedicated support

Community support

Discounts and offers

Industry

Product

About

Support

Legal

Follow

Contact

Big starts small.