SOURCES OF FINANCE FOR ENTREPRENEUR(SHIP)

1. SOURCES OF FINANCE FOR ENTREPRENEUR(SHIP) Being the topical paper delivered at the global MSME SUMMIT organized by University of Entrepreneurship and Technology, State of Delaware, U.S.A, and Institute of Company and Commercial Accountants (ICCA) of Nigeria on the 6th and 7th of July 2018 at Ikeja, Lagos Nigeria. BY Fatai O. Salahudeen, PhD, FCCA, FIIM CEO, Master Administrators Academy (MACAD) Co-founder, Institute of Master Industrial Management Entrepreneurship

2. BACKGROUND The aims of this paper is to present the various options of workable sources of financing entrepreneur(ship) at the level of Micro Small and Medium Enterprises. Because sources of financing entrepreneur(ship) is a strong and critical factor in the development of sustainable industrial capacities of MSMEs as an economic sector of any nation, it goes to say further that a sound knowledge of sustainable sources of entrepreneurial drives is in the domain of entrepreneur(ship) financing particularly the MSMEs. We are here referring to personalities, independent business owners, entrepreneurship scholars, and business and organizational developers who would stand in the status of successful Entrepreneurs.

3. Definition An entrepreneur is a person who invests knowledge, interest, money and time on learning, organizing and leading in businesses and other human activities sustained with passion, competence and resilience and ethical practices that often translate to achievement of desired needs. With the entrepreneurial capabilities, the personality is able to maintain tracks of focus under the challenges and circumstances of velocity and dynamics of change.

4. ENTREPRENEUR(SHIP) Whereas, an entrepreneur, is someone who organizes, manages, and assumes the risks of leadership in a system of works, processes, business or enterprise, an entrepreneuris also predominantly a change manager and an agent of change.

5. Therefore, Entrepreneur(ship) is the practice of abilities. The capacity is the sum total of cap(abilities) for discovering opportunities arising from gaps of solutions to meet desired needs as a goal, and leading the prudent utilization of available resources to achieve such target sustainably.

6. Entrepreneur(ship) expertise essentially, is built on multi skills of leadership disposition at all spheres of a personality, business and organizations. Disciplines cumulating to entrepreneurship excellence including research for knowledge, innovative thinking, process re-engineering orientation, people management and motivational drives, to a very large extent.

7. APPLICATION OF ENTREPRENEURIAL CAPABILITIES SHIP Entrepreneur(ship) is required for businesses in the rural and urban environments for MSME as the economic sectors of a nation including the civil services, that Nigeria most required. Entrepreneur(ship) is the expert exposure to risks management for proper cover and reduction. Entrepreneur(ship) enables legitimate business and compliance with the laws of economics and environments, Entrepreneur(ship) is applicable to workforce skills and competence development as required in performing activities, processes, operations, roles and function in MSME businesses and all over the strata of the economy of the nation, Entrepreneur(ship) is applicable for proper context of managing and controlling, efforts, useful assets, incomes and expenditure.

8. THE WIDER SCOPES OF ENTREPRENEURSHIP MSME Entrepreneurship generate employment for male and female in all sectors of the economy of a nation, MSME Entrepreneurship is in greater numbers of sole proprietorship spreading across all economic sectors of a nation, MSME Entrepreneurship gets finances from different sources of funds but predominantly from personal savings, social network of the entrepreneurs, etc MSME Entrepreneurship performance is greatly in the application of alternative source of operating resources to keep business activities on in all economic sectors of a nation, MSME Entrepreneurship operates under the effects of major government fiscal, economic, industrial, political and trade policies with constant changes in environment and population of a nation, MSME Entrepreneurship attracts priority management actions required for competing factors to sustain employability and continuity of operation in the economy of a nation.

9. VITAL STATISTICS ON MSME SUBSECTOR OF NIGERIA : • There are 37 million MSMEs spread all over Nigerian, WHICH according to SMEDAN collaborative survey 2013 generated 84% of the national employment. • There is an average of 1,000,000 per state of the federation including FCT, and this average is equivalent to 3% of the total population of MSMEs. Some states have significantly high percentage of MSMEs population and thus seemingly qualifying for MSME industrial states. • For MSME new entrants into the sub sector, this is a viable information about business location, industrial proximities and government supports

10. Distribution pattern of MSMEs in the Industrial Sectors of Nigeria

11. THE MODAL MSME SECTORS: There are 2.3 million MSMEs in each sector of the Nigerian economy, the highest being in the Wholesale and Retail sector with 55% or 20 million. This is followed by manufacturing with 13% or approximately 5 million, while agriculture stands the place with 9% or 3 million. Insights into market or industry for business analysis and development.

12. MSME BUSINESSES REGISTRATION IS VERY LOW Over all, only 4% of MSMEs in Nigeria are registered while 96% or 36 million are unregistered. unregistered operating MSMEs are very common across sectors In each sector, about 12 million MSMEs are unregistered with highest unregistered fallen into the wholesale and retail businesses. Averagely, a sector has 2.8 million MSMEs not registered to operate. With 96% unregistered, the insight provided here is that the MSMEs businesses registration services for entrepreneurs is a viable venture. This status makes it imperative to create the awareness for business registration as a global entrepreneurship practice. The Corporate Affairs Commission has greatly simplified business registration processes within a few days.

13. FEMALE EMPLOYMENT: Each state in Nigeria has 1.5 million employed in its SMEs sector out of which women account for 609,000 and men 924,000. Or 40% and 60% females and male respectively INSURANCE COVER: In every sector there 152,495 SMEs with insurance cover, while there are 4.3 million SMEs without business insurance. Each state has only 53,579 SMEs with business insurance, while there 1.4 million without business insurance. SKILLED LABOUR: Each sector on average has 3.7 million qualified and 2.3 million not qualified respectively, while the federation average is 5.2 million. Each state average is 98,022, 63,373, and 142,090 respectively for qualified, not qualified and total. The qualified manpower availability is 55% while the not qualified is 45% of the 37 million MSMEs.

14. GOVERNMENT POLICIES: The government economic policies only favoured the MSMEs to the extent of 28% amongst the 37 million MSMEs in Nigeria The sector mostly unfavourable to the MSMEs is the exchange rate at 89% followed by taxation with 87%, and banking with 83% , then intervention with 79%, fertilizer with 77%, and raw materials with 74% which perhaps greatly have hindered export market. The sector average of the unfavoured is 27million or 62% as against the favoured of 10 million or 28%. The state average of the unfavoured is 8 million while the favoured is 3 million or 27%. This analysis factually shows the effects of government policies in the MSMEs sector that could be held accounting for the MSME success and failures across sectors.

15. SOURCE OF ENERGY FOR OPERATIONS The time interval for usage of alternative source of power by the population of MSMEs is 1-5 hours daily with sector average of 1.3 million and state average of 35.8 MSMEs . This number reduces progressively as the hours interval increases. Energy supply or availability for industrial usage is so critical to this sector to the extent of 0.9 correlations and a degree of relationship of 1 across all interval of time.

16. PRIORITY SETTING CHALLENGES 38% are able to identify Priority Areas and perhaps took advantages, others in the 62% were unable to and grossly denied the benefits. The Priority Areas average of those who identified is 14 million and 23 million for the unidentified. The state average for the identified is 5 million or 8 million for the unidentified. This implies that a good number of the MSMEs are yet to put in place the strategy of priority setting to identify and make good use of available assistance from NGO and the enabling support agencies. MSME therefor is a viable sector for entrepreneurship consultants for entrepreneurs education

17. SOURCES OF CAPITAL FOR MSME IN NIGERIA Government grants Micro financing products Commercial banking financial products Government financing products Social network capital formation Industrial banking financial products Personal savings Investments and contributions products Islamic financing products

18. SOURCES OF CAPITAL FOR ENTREPRENEUR(SHIP) Government Grant as a source of MSME financing A government grant is a financial award given by the government to an eligible MSME to help fund projects providing services that stimulate the economy. Government Loans: these are usually in the form of student loans, small business loans, that come from the government, or private sources – such as banks or financial institutions. For example, small business loans distributed through government organizations in many of counseling, mentoring and training programs to help put micro small and medium enterprises within economic advantage.

19. ORGANIZATIONS THAT OFFER MSME FINANCING SUPPORT Nigerian British Chamber of Commerce, the Lagos Chamber of Commerce, the Association of Small Business Owners (ASBON)

20. GOVERNMENT INTERVENTION PROGRAMMES FOR MSME FINANCING YouWin Connectprogram, the SMEDAN Loans projects, the YES-Programme of the Nigerian Bank of Industry (BOI) among others. The government finance institutions serving in this capacity includes: the Central Bank of Nigeria (CBN), the Bank of Industry (BOI), Nigeria Agricultural Cooperative Rural Development Bank (NACRDB),

21. The Small and Medium Enterprises Development Agency of Nigeria – SMEDAN Facilitates Easier Access to Funding MSMEs in Nigeria while starting up, running or working with their businesses. The SMEDAN has a Credit Information Portal to facilitate easier access to funding by the Micro, Small and Medium Enterprises (MSMEs) sector in Nigeria. The Portal provides an information pool that will assist entrepreneurs make informed decisions in getting loans and credits from financial institutions within their locations.”

22. N-Power Programme The Nigeria N-Power Programme ensures that each participant will learn and practice most of what is necessary to find or create work. YOUTH ENTREPRENEURSHIP SUPPORT (YES) PROGRAMME The interested candidates must be of ages 18 – 35 years with a minimum educational qualification of OND to access this opportunities. They must also have been trained under the BOI Entrepreneurship Capacity Building Programme (as stipulated in the Training Programme Framework). The National Youth Service Corps (NYSC) members that have gone through the NYSC’s Skills Acquisition and Entrepreneurship Development Programme (SAED) are also legible

23. It is wonderful to gain knowledge, but it is even better to obtain practical wisdom, skills, and techniques to make use of the knowledge and create something new. The Master Entrepreneur competences prepare the bearer to become such a person with total confidence in dispensing the competences and skills to make sound entrepreneurial decisions. ETHICS AND BEST PRACTICES ARE STRONG EMPOWEREMENT FOR ENTREPRENEUR(SHIP … proper application of the known best practices and principles of entrepreneur(ship) sustainably influence the performance of entrepreneurs and organizations to achieve desired goals. It is therefore an empowerment in the first place for sustaining the growth and development of entrepreneurs. Second to this are various sources of financing entrepreneur(ship) capacity.

24. ENTREPRENEUR(SHIP) BEST PRACTICES The application of best forms global practice is essential for successful entrepreneur(ship). This was explained in a research work on the application of best practices by about 37 million MSMEs in Nigeria. The data for the study was based on the baseline data from the collaboration of SMEDAN and the NBS as at 2013. The analysis of MSME landscape in Nigeria are briefly presented later in this paper. This is to enable a proper orientation of entrepreneurs on business development and market and industrial analysis.

25. BEST PRACTICE DEFINED for MSMEs • A practice originates from the regular application of principles that yield OBSERVABLE results from processes and styles of carrying out activities. • A practice is best the more if it; • is widely in use more than other styles or processes, • yields superior results and, • has stood test of time.

26. The principles that are highly relevant to entrepreneur(ship) include: • Business Development, • Business Planning, • Compliance, • Human Resources, • Social Responsibility, • Risk Management, • Vocational Management, • Change Management, • Process Management, • Decision-making, • Capacity Management. THE PRINCIPLES OF ENTREPRENEUR(SHIP) BEST PRACTICES

27. M(SMEs) Entrepreneurship is focused on expertise for sustainable M(SMEs). But SMEs as an acronym may stands for three meanings. SMEs as Small and Medium Entities – International Financial Reporting Standards (IFRSs) Framework SMEs as Small and Medium Entrepreneurs - SMEDAN and Corporate Governance Policy in Nigeria SMEs as Subject-Matter-Expertise – Wisely application of knowledge Subject-Matter-Expertise – defines the entrepreneur(ship) in the reality world

28. ENTREPRENEURSHIP CAPABILITIES • This is the personality sphere and other factors that make a total entrepreneur. Entrepreneurship capability function is about applying the best practices strategies through: • knowledge of the task, • Resilience, • Suitable resources. • Optimism, • Passion for the task involved, • Time • Intention • These gaps when in existence are anomalies that breed failure in the drive for goal attainment. By the concept, there is no individual person with 100% of the the variable attributes identified as required to achieve goals. Hence outsourcing of required capabilities is mandatory for successful entrepreneurship bids.

29. Entrepreneur(ship) intention is by a combination of factors If (Start-up skills = Yes) and (Fearlessness = Yes) and (Start-up Difficulty = Less Difficult) and (High growth expectation = Higher)… and (Gender = Female or Male), and (Occupation = not working) then (Entrepreneurial Intention = High)

30. WISDOM DISCIPLINES EMPOWER ENTREPRENEUR(SHIP) 1. WHAT IS WISDOM? Wisdom is about knowing what is needed in order to more effectively be responsible for your world. 2. WHY DISCIPLINE? Wisdom is not something you have. Rather, wisdom shows up as a result of cultivating your relationship with a core set of disciplines and practices. Wisdom is something you become a student of, or apprentice to. As you grow with each discipline, wisdom shows up more easily and more often.

31. BALANCE AND INTEGRATION Each wisdom discipline is an essential element of conscious leadership. Together, they help you become a more balanced and integrated human being and leader. One of the ways of connecting with each discipline is to connect with its underlying natural element. For example, being on “purpose” is like being “on fire” and connected to your “spirit.”

32. THE DISCIPLINE OF PURPOSE – PLANNING FOR GOAL ATTAINMENT When you write a purpose statement for yourself, and live by it, you are doing two things: Acknowledging that your presence in the world is important and makes a difference. Articulating - and committing to deliver on - the particular nature of the difference you are here to make. A purpose statement is only as good as the discipline with which you hold yourself to it each day. Something to do Purpose is the confluence of what you’re ‘built for’ plus what you ‘stand for.’ Built for - your gifts, strengths, passions Stand for - what you know in your heart must change or get better the world. Effective planning is the background to achievement of goals and ultimate guide to sourcing financing for entrepreneur(ship).

33. THE DISCIPLINE OF INTEGRITY – a critical requirement for financial supports. Integrity is first about truth. And second, about excellence. It is being true to your purpose, your values, and your agreements with yourself and others. It is excellence in the realm of form - artistry, finely-ordered systems, ingenious architecture of character, physical fitness and grace of attitude. Integrity is the discipline of making things real in the world through structure and accountability. It is essential for anything worthwhile entrepreneurial to come into form. How is this true in your experience as an entrepreneur?

34. THE DISCIPLINE OF COURAGE Something to consider as serious in seeking finances. Courage is being willing to engage with the riskier, more vulnerable aspects of life - to swim in strong emotional “currents” and wade into “deep water.” Courage is the willingness to have the difficult conversation, or face the thing you fear - while keeping your heart open. Courage enables emotional fluency - which is not avoiding intense emotion (positive or negative), while also not letting it overwhelm or hijack you. Entrepreneurs are appreciated for financing how they are showing up and can achievable or have accomplished as a quality they bringing to the table. The risk you can dare determines your position in the marketplace.

35. THE DISCIPLINE OF CLARITY • Very critical in financing entrepreneur(ship) • Question your assumptions? • Challenge your perception of your business an enterprise or issue, • Interpret the transactions or an events in your activities, • The discipline of clarity is keeping your activities open and flexible, while still being discerning, still having a focus of view, mission, vision and still making clear choices and decisions as an entrepreneurial personality or enterprise.

36. BUILDING A BUSINESS WHILE WORKING Is a source of entrepreneur(ship) financing. Many people dream of leaving paid jobs to start their own businesses. Many successful entrepreneurs had to keep their day jobs until they reached a point in their businesses when it was feasible to quit. This transition time can be stressful and difficult, especially when you don’t enjoy your job, but it doesn’t have to be. Keep the job, start the business, grow your entrepreneur(ship) capabilities.

37. GET CRYSTAL CLEAR ON YOUR REASON FOR STARTING YOUR BUSINESS. Connecting with your “why” is the most important first step you can take. So the entrepreneur knows what to seek finances for. No guess work please.

38. COMMIT YOURSELF TO YOUR DREAM enterprise. Having the desire for something to work vs. committing to it are vastly different. When you commit to your dream business, you are making a binding obligation to see it through to success. Great entrepreneurs do not deny their enterprise the attention it deserves. Ask Aliko Dangote or Prof. DG Singh.

39. CREATE A VISION FOR YOUR BUSINESS - to attract the right financing. Think about what you want in your business to be, to become and write it down. This becomes your guide. Be very specific and detailed. Describe in great detail, what activities you engage in, who your customers/clients are, how many customers/clients you have and what your monthly income is.

40. JOIN A MASTERMIND GROUP. A mastermind group is a peer-to-peer mentoring group that supports each member, brainstorm ideas and share advice and work through challenges together. A mastermind group can be excellent for helping you staying accountable and motivated for the right sources of financing.

41. IMMERSE YOURSELF IN LEARNING. Research and study anything you can find that is pertinent to your business. The Internet provides an abundance of valuable information on building a successful business. Take courses, hire a coach or find a mentor. Listen to podcasts or audio books during your morning commute. The more you learn and become an expert in your area, the more self-assured, motivated and successful positioned to access greater financing.

42. STAY POSITIVE ABOUT YOUR ENTERPRISE. Every day, acknowledge something you appreciate about your business. Perhaps you enjoy your workers. The point is to look for the good things around. The more you focus on what is positive about your current activities, the more success you will bring to all situations, including your business financing. Negative perceptions drain your resources, making it far more difficult to move forward for financing bids. SET DAILY GOALS. Take small, measurable action steps each day toward your business including the smallest units to re-engineer. Entrepreneur(ship) financing goes beyond cash and bank balances, it is the wholesome capacity quality assurance, asset building and prudent utilization of resources that renew your business potential all the times.

43. THE CLARION CALL TO ALL The call now is for all entrepreneurs, scholars and professionals of integrity in industries and the government services to join the drive with MASTER ADMINISTRATORS ACADEMY to instill the desired standards of professional education for the Entrepreneur(ship) Practice in Nigeria. Join the professional hub Entrepreneurship excellence in Africa, the Institute of Master Industrial Management Entrepreneurship Visit: www.instmime.org for pioneering membership. … the premier institute for master entrepreneurs and industrial managers THANK YOU FOR YOUR ATTENTION