This is a guide to help you navigate through the cokodeal.com platform.
Cokodeal.com is a pan Africa Commodity Bank; a digital platform where businesses in Africa find international buyers to trade. Get financing, logistics and receive global payment.
Leveraging cokodeal’s network, technology and expertise would help expand, get more customers, and scale your business to the next level.
Let’s get started!
How to create a store on cokodeal
To start selling on cokodeal, you need to create an account.
For a merchant, this account is your online store front.
Follow these steps to register your business with cokodeal and post your first deal.
Your dashboard is your login area, to edit your business and products.
On the dashboard you will see that you can:
Create a sellers’ or buyers’ deal
You can view and send messages to prospective clients.
edit your store
Subscribe to advertisement to promote your product for more buyers
Read blog posts and FAQs
Lets describe what you can do with each of these features:
Create a sellers’ or buyers’ deal
This is where you go to when you want to post an offer as a seller or a buyer post what is willing to buy.
Messages
The message feature helps for the communication between prospective seller and buyer
Edit your store.
With this feature, you can make customized tweaks to your store. You can change the background logo; edit name of store, and other information to fit your business.
How to post a deal ( or uploading your product)
The cokodeal feature ‘post a deal’helps to quickly match sellers with buyers.
There are two types of deals you can post on the cokodeal platform, depending on what you’re looking to achieve, you can post as a seller’ or as abuyer.
Fill the product information, product, price, name, product, images
Click post deal.
Tips
When creating your deal, always ensure to add the relevant keywords tags to help for better ranking of your deals when prospective buyers search. Keyword is different names your prospects may use to search for your product, E.g Maize, Corn, Corn in sac, Dry maize, corn seeds
Ensure to upload high quality pictures of your products and a well written description of the product on your deal and specification.
Post each product one after the other without merging two products under 1 post/ upload.
How to promote your products through cokodeal
Post a deal
This is an awesome way to promote your business on cokodeal for free. Depending on if you’re a buyer or a seller, your deals would be posted under “buyers’ needs” or “sellers’ offers” pages accordingly. The more deals you promote, the more your business can gain more traction of buyers on the platform.
When we talk about Nigeria, it’s vast amount of natural resources and the huge potential comes to mind.
At first glance, you can envisage the impressive potential ahead for the country, especially looking at the mining sector.
Nigeria has 44 different types of solid mineral resource spread across it’s 36 states according to reports by several government sources. But these resources are largely under-explored. For example, gold is found in some states in Nigeria, but you can’t compare the extent of its exploration in countries like Ghana, or South Africa with Nigeria. The difference is huge.
The government knows without a doubt mining in the country needs to go mainstream. A meager 7.12 percent contribution to GDP isn’t sufficient enough for what the country needs- not with the current financial situation in the country- and certainly not with the enormous potential the mining sector possesses.
Good thing government initiatives and policy reforms are being implemented now to support the growth of the sector, however in recent years, turn of events like the drop in oil price, the pandemic, and the fact that Nigeria just barely scraped through economic recession, things are expected to slow down, it is widely hoped that better things are ahead for the mining sector.
So on this post, we’d be providing you with information needed for investing in the solid mineral sector of Nigeria.
Mining Solid Minerals In Nigeria
Operations in the Nigerian mining sector is predominantly informal when compared to mainstream processing operations.
According to Nigerian bureau of Statistics, and KPMG, 80 percent of the miners in Nigeria are Artisanal and small-scale miners like those in the cement and limestone production companies, and activities like marketing and transportation are mostly done by the small scale companies or even individuals.
In terms of employment, mining and quarrying makes up 0.17 percent of employment in Nigeria according to several reports.
Key Players In The Nigerian Mining Industry
The Minister
The Minister is saddled with the administrative role of the Ministry of Mines and Steel Development.
His job is to ensure a well coordinated and sustainable development of the mining sector, designing workable frameworks to support foreign and local investors, amongst other roles.
Cadastre Office
The Cadre Office is responsible for the administration of the mining titles, and the maintenance of registers ( register of Reconnaissance Permits; Exploration Licenses; Mining Leases; Small-Scale Mining Leases; Water Use Permits; and Quarry Leases) within which the Cadre Office administers.
The office also considers applications for mineral titles and permits, issue, suspend and upon the written approval of the Minister revoke mineral titles. And can grant property rights on scenarios there are competing applications for the same exclusive area.
Some Key challenges In The Nigerian Mining Sector
Mining activities carried out by local artisans
Illegal mining activities
Insecurity challenges
Unstable political terrain
Poor infrastructure
Solid Mineral Deposits And Their Locations In Nigeria
Solid minerals and their locations across the various states of Nigeria
As of 2017, the three largest explored solid minerals were granite(17.5m tonnes), limestone(14m tonnes), and laterite(3.7m tonnes), with each of these minerals being produced in Ogun, Kogi, states and the FCT(Federal Capital Territory) respectively.
In recent years, Cements production made from limestone has been on the rise from N2.3bn ($7.4m) to N5.9bn ($19.1m), with companies like Dangote Cement Plc, Lafarge Cement Plc, CGC Nigeria Limited and Julius Berger Plc being the big players.
Resource Deposits
Talc
Quantity: 40 Million tonnes
Location: Niger, Osun, Kogi, Ogun, Kaduna
Gypsum
Quantity: 1 Billion tonnes
Location: Spread over several states in Nigeria
Iron Ore
Quantity: 3 Billion MT
Location: Kogi, Enugu, Niger
Lead/Zinc
Quantity: Over 10 Million tonnes
Location: Over 8 states in the country
Bentonite and Baryte
Quantity: Over 700 million tonnes
Location: Taraba and Bauchi. With many more to be discovered in several states all over the country waiting to be explored in large quantity
Location: Available in various regions in the country.
Laws and Regulations on Mining in Nigeria
Exploitation and exploration of solid minerals are governed by the Nigerian Minerals and Mining Act 2008 (the Act), and the Nigerian Minerals and Mining Regulation 2011.
The Act confers control of all properties and minerals to the federal government and forbids unauthorized exploitation or exploration of minerals.
According to the Act, in accordance with the Land Use Act, the federal government owns all lands found to contain minerals in commercial quantity.
As such, any person who lawfully acquires a right over the exploitation or mining of any mineral resource in the country is been passed onto by the government.
The Act also established the roles of the mining Cadre Office, and the Minister of the Federal Ministry of Mines and Steel, with the Cadre Office responsible for the administration of mining titles and the maintenance of the cadastral registers, and the Minister is vested the role of fostering the steady development of the mining sector by providing workable plans and templates in place for investors.
The Federal Ministry of Mines and Steel
The Ministry of Mines and Steel Development (MMSD), founded in 1985, was saddled with the task of galvanizing the development of the country’s solid mineral resources, in order to help boost wealth and job creation, and further rural economic development.
The ministry is responsible for the following Activities:
Identifying solid mineral deposits.
Setting up framework for prospecting investors.
Overseeing Quarry and extraction activities.
Issuing of permits
Licenses and leases for mineral sales and consumption,
Collecting rents, fees and royalties from mining companies.
Attracting foreign investments.
7 Parastatals Under the Supervision of the Federal Ministry of Mines and Steel
The Nigerian Geological Survey Agency (NGSA).
The Nigerian Institute of Mining and Geosciences.
Mining Cadastre Office
Nigerian Mining Corporation
Mines Inspectorate Department
Mineral Resources and Environmental Management Committees(established in each state of the Federation).
Mines Environmental and Compliance Department.
On the back of China’s trade partnership with Nigeria in recent years, Nigeria has seen boost in revenues for Zinc and lead ores and concentrates grow respectively, from $2.2m to $9.7m and from $175,000 to $4.2m. More partnerships like this are expected in the future as Nigeria looks to explore more resources.
Although one cannot overlook the rising issues of insecurity and insurgency in the country, prospects in the Nigerian mining sector is a huge lure and big opportunity for anyone ready to take the plunge.
Cocoa business is still considered under explored, and there’s enough room for more business people to make good money. While Africa dominates the world in cocoa production with over 70%, Africa is missing in the wealth in cocoa value addition, with just less than 5 percent market share.
As a country in desperate need to diversify its economy, this is one business you can venture into knowing the country need you eventually.
So are you ready to get started?
Let’s delve right in…
Introduction on cocoa
Cocoa, also called cacao tree, is an evergreen plant popularly cultivated to harvest its edible and rich cocoa seeds.
The cocoa seed is the major ingredient used in the production of chocolate liquor, chocolate solids, chocolate butter, and chocolate.
Cacao is a member of the family of malvaceae with its origin from the tropical rainforest area of central and southern America.
Cacao tree usually takes 3-5 years to grow it’s seeds. At maturation, cocoa pods are plucked off the tree and broken to extract the cocoa seeds. Each cocoa seed(also called cocoa beans) comprise of a seed coat, a kernel, and a germ.
Favourable Conditions for Cultivating Cocoa
In cultivating cocoa tree, you need the following conditions in your favour:
Temperature and weather conditions
Cacao trees are favorably grown in regions having about 27°C in average annual temperature, and an Annual rainfall of 150 to 350 cm.
Protection from Strong Winds
Strong winds often blow off unripe pods, and this can lead to waste and low yields for the farmers. Hence it is important to put measures in place to curtail such occurrence. As a typical example, Hurricanes can also cause huge damage to cocoa trees as seen in the West Indies and Central America.
Good covering from direct sunlight
It is encouraged as good practice to protect the cocoa tree from direct sunlight as it can cause pores on the cocoa pots. Planting of other crops to provide good covering from sunlight is a good practice.
Varieties of cocoa tree
The three main varieties of cocoa
Forastero
They are mainly known as the common cocoa as they are 95% of world production. The pods are short, yellow, smooth without warts, with shallow furrows. Their quality is not as good as Criollo. They are grown mainly in west Africa and Brazil. It is grown a lot in Africa.
Criollo
Criollos are typically protruded, yellow or red in color, with deep furrows and big warts when they are ripe. They are mainly known as the fine or aromatic cocoa because of their very good cocoa quality, and are less than 1% of world production. They are grown mainly in Latin America.
Trinitario
They are a hybrid of the Forastero and the Criollo and considered a fairly good, fine flavour cocoa. They are approximately 5% of world production, and grown mainly in Trinidad, Venezuela, Papua New Guinea, Sri Lanka, East Timor, Java and Madagascar.
Some interesting things to know about cocoa
Cocoa beans are rich in potassium, magnesium and iron.
Very rich in food value, cocoa beans contains up to 20% protein, 40% carbohydrate, and 40% fat.
Cocoa can prevent cancer and other heart , and blood related diseases as it contains theobromine, an alkaloid closely related to caffeine and phenols and flavenoids, antioxidants.
Cocoa in Nigeria
Agriculture was Nigeria’s main source of foreign exchange prior to independence. According to reports, 58.4% of the foreign exchange earnings from 1960 to 1970 was the export crop subsector of the agricultural sector.
Then came the discovery of oil in the 1970s which led to some drastic shift in the political and economic landscape of the country.
Oil became the main focus for foreign exchange, displacing agriculture, as evident in the sharp decline in output from 305,000, to 100,000MT, and Cocoa export contribution dropping to 5.3% from 1970-1985.
Although the 1986/87 cropping season saw output improved from previous lows to around 200,000MT due to Government intervention initiatives to revive the sector, the journey back to the top has been slow, maintaining an average of just 4% between 1980 and 2000. The country’s undying love story with oil has seen other sectors struggle over the years.
Nigeria is the third largest exporter of cocoa in Africa behind only Ghana and Cote’d’ivoire and the fifth in the world behind Cote’d’ivoire, Ghana, Indonesia, and Brazil, according to recent figures.
Tips
To run your farm here are some tips to help you:
Make good arrangements with farmers who’d be on ground to monitor your farm on a regular basis. You can look for good incentives for them. The best is if your farm is closer to a village settlement.
When getting your farm land, you want to look for areas you know wouldn’t be commercialized in the next 20-30 years.
Weed 3-4 times a year.
Always ensure carrying out best farming practices to achieve healthy yields.
Take some time in educating yourself on the best practices, and always look to transfer those knowledge to the farmers working with you.
Cocoa harvest seasons in Nigeria
Harvest season for cocoa span from October to September.
October to February as the prevalent period for harvest, while from April/May to September, harvesting of smaller and mild crops are common.
Where to find cocoa in Nigeria
Ondo State produces 70% of cocoa in Nigeria, making it the highest producer in the country. Here is a list of cocoa producers in the country, in no particular order:
Ondo
Osun
Oyo
Ekiti
Ogun
Edo
Delta
Akwa Ibom
Cross river
Kogi
Kwara
Abia
Anambra
Cocoa export supply chain in Nigeria
Every party involved in the supply chain play a key role in the overall business outlook of cocoa export in Nigeria.
These parties are:
Smallholder farmers
Middlemen
Exporters
The cocoa supply chain would typically start from local farmers; Small scale farmers are spread across the several cocoa producing states in Nigeria.
Each farm is about 2-5 hectares, and would produce on the average 0.6MT per hectare.
The farmers need steady and ready buyers to guarantee in-flow of cash to reinvest in their business, pay up immediate outstandings, loans and expenses.
Meanwhile the middlemen stand in the gap between the farmers and the exporters. They’re the aggregators. They source directly from the farmers and supply to the exporters in bulk.
Challenges facing Cocoa smallholder farmers in Nigeria.
These are the major challenges facing Nigerian cocoa farmers:
Lack of sufficient access to incentives and government support
Difficult access to market; poor road channels leading to high cost of transporting farm produce from farm to market
Increasing running cost of production
Less favourable climatic conditions; Climatic conditions now are far less favourable to that in the 70s and 80s.
Seasonality of cocoa farming means farmers do not make money during off seasons, and these periods can be challenging times for the farmers.
Challenges facing Cocoa exportation business in Nigeria.
Volatility and unpredictability of foreign exchange.
Dwindling number of smallholder farmers due to uninterested budding youth, and interest in other endeavours they feel is much more profitable.
High interest rates, to get financial credits and loans
Unstable political will.
Difficult port and customs regulations
Governing bodies who are key players in the value chain have over the years failed in providing adaptation and workable systems and policies to ensure ease of doing export business.
Top cocoa exporting countries in Africa
Cote’d’ivoire
Ghana
Nigeria
Cameroun
Top importers of cocoa in the world
Netherlands
USA
Germany
Malaysia
Belgium
Indonesia
France
United Kingdom
Italy
Turkey
Spain
Canada
Singapore
Top cocoa importers in Europe
Netherlands
Germany
Malaysia
Belgium
France
United Kingdom
Italy
Turkey
Spain
Governing organizations to follow as a cocoa exporter in Nigeria
The Nigerian Cocoa Association
World Cocoa Producers’ Organization
Cocoa Research Institute of Nigeria (CRIN)
Cocoa Framers Association of Nigeria
OWIT Nigeria
Opportunities in Cocoa Export Business
Surging global demand cocoa and cocoa futures, In 2011, the trading volume of cocoa futures on the Intercontinental Exchange (ICE) was 4.95 million tons, exceeding production by 750,000 tons.
In November 2011, global sales of chocolate confectionery crossed US$100 billion for the first time, with consumer demand for chocolate anticipated to continue increasing and possibly outstripping supply.
Cocoa processing market is estimated at $200 billion.
Getting started with cocoa export business
Next we’ll look at the three steps to take to get started as a cocoa exporter
Set up your business plan
Promote your business
Fulfilling your orders.
Setup your business plan
A key component in planning your business is knowing your strengths and weaknesses.
You should look at what you’re capable of as against what you’re incapable in terms of capital, resources, reach etc. This would give you an idea on how to go about structuring your plan to meet your business goals.
In your business plan questions you want clear answers to are:
How do I get customers?
How am I going to maintain supply to my customers?
Am I owning my own farm or leasing or partnering smallholder farmers?
Who are my key partners to help me achieve my supplies and fulfill my orders?
Which technology can I leverage to achieve my goals?
How am I advertising my product? What methods would I be employing? If we’re talking about online advertising, should it be Paid ads vs free ads, or combination of both?
Bottom line? To stay profitable, what strategy would best work for you based on what you have vs what you don’t have?
Remember, you’re dealing with international buyers, they’d be most likely be sophisticated and your business has to be well planned and presented, backed with the right principles of course.
If everything is well planned, you can achieve success even without spending too much capital. Also remember, cocoa business is evergreen, one cocoa tree can last for 30 years, producing constantly once it’s matured. So the initial cost might feel or look too much, it gets better over time with good rewards to follow.
Now that your well-thought-through business plan is ready, the next step is to
Register your business with appropriate governing bodies.
Register your business
Exportation business is a serious endeavor. A lot of risks are involved, so anything to help reduce the risk from the side of your buyers should be encouraged to win them over.
That’s why it is necessary to register your business with all necessary bodies.
Registering with these organizations is necessary. Some of them would give you necessary support like low interest loans, trade information and support to help your business grow.
The good part of this is most of these bodies are online, so you can start from there.
Start your business registration online by clicking on the following links:
CAC (Corporate Affairs Commission) – Start the registration of your business online. Give your business credibility and visibility by registering your business as a legitimate business in Nigeria because international buyers would mostly do business with verified businesses. Start here: https://pre.cac.gov.ng/register/new
Nigerian Export Promotion Council (NEPC)
The NEPC rules over all other apex institutions involved in the promotion, development, and diversification of exports in Nigeria.
Their activities involve:
Co-ordinating and facilitating export development in the country
Facilitating export promotion activities
Working with international trade agencies on cooperation and capacity building.
Organization of Women in International Trade (OWIT) Nigeria
Awesome for woman into international trade, you can join them and benefit a lot from partnering with international and local businesses, to getting low cost loans, and other wonderful benefits. You can read more on them and become a member here: https://owitnigeria.org/join-us/
Cost Analysis
Before we move ahead, let’s try to do a rough sketch of what it’d cost you to setup your cocoa export business.
Startup Expenses
Land(1 hectare) – N4M
Warehouse & drying facility- N2M
Laptop/desktop computer- N200,000
Cocoa seedlings – N210,000
Farm clearing and preparation- N30,000
Planting and workmanship- N100,000
Website building – N100,000
Promotion cost – N200,000
Registrations – N50,000
Packaging – N500,000
Transportation – N3M
Documentation- 50,000
Total = N9.34M
Monthly running cost estimation
Internet subscription – N10,000
Webpage maintenance – N30,000
Promotion costs – N200,000
Salaries –N250,000
Calls and communications-N5000
Office space- N10,000
Miscellaneous – N10,000
Total: N515,000
Other costs to consider is for custom brokerage and freight forwarding. Their costs arent fixed as it depends on several factors. But ensure to include them as variable costs.
What’s next?
If you’ve already set the ground running; you have your farm, business plan, registrations, and everything we’ve talked about so far up until now, I’m sure all you want is to be bombarded with calls from buyers, placing orders, and business booming.
Promote your cocoa business Online
How do you get international buyers for your cocoa beans?
There are several ways. But we just cut to the chase and focus on our preferred way- the internet.
The internet is your fastest and most cost effective way to reach foreign buyers. It presents a mouth-watering prospect such that if gotten right, you can build an awesome, and well fulfilling business for yourself.
Some Facts about the internet
More than 60% of the world’s population use the internet, that amounts to about 4.72billion people around the world [datareportal].
According to Netcraft, there are over 1 billion active sites on the web today and it’s number keeps changing every second.[Netcraft]
According to MOZ, Everyday, 77 percent of people use google at least three times to search for things online.
54 percent of social users research products using social media [globalwebindex].
You can get your buyers online because people are using the internet to search for things to buy. The internet is one huge community, get plugged in.
What’s so beautiful is you don’t need to be a software guru to own and manage a website. You can outsource it.
Outsourcing is a fantastic way to leverage other people’s skills especially on something you’re not so good at, while you focus on other things.
To get buyers on the internet, you’d need an online presence. Your online presence just asks the question how easy and often are you found online? So to get started, here’s what you must do:
Build a website/online store
Manage the website
Promote your website
What you need to build and run a website
Domain name
Hosting
Design
Maintenance
Website vs online store
Think of your website like a well prepared business card, only that it has much more details in it, and your online store is a brochure that contains your products and price listing.
If for you, the internet is a vital avenue to getting buyers then you might be doing yourself a disservice by choosing to use one over the other.
It’s all about online presence. Let your business be out there as possible, given it’s within your budget.
Website
Online Store
You own the website
You’re renting a website within another person’s/company’s website
It can take lots of time and effort for buyers to see your products on google search.
It takes little time to get customers to see your products on google search as your store is within a bigger website that’s well ranked on google search engine.
It would cost you lots of time and effort to build your brand
It can help you build your brand faster online
If done expertly, you might spend little and get free buyers and customers
It can be capital intensive, however if done properly, is worth every penny spent.
Table to compare having a stand-alone website vs running online marketplace store
In promoting your website and business online, there are two methods:
Organic method
You can get buyers without having to spend any money, this method can take time but is really worth the while if done properly. The best approach to this is giving something of value, and getting traffic as reward. You’d be focusing on ranking for relevant keywords that lead people to clicking your link to your website or web store. You then sell your products to the visitors of your website.
But it’s not so easy, because there are billions of websites out there competing for your prospects’ attention, hence the need to tilt the odds in your favour by ranking at least on the first page of searches relevant to your business.
Remember, the aim is to make the first page of google search.
Why?
According to this survey conducted by MOZ, 75 percent respondents preferred to click one of the top two results. They’d prefer to scan through the first search page to find relevant answers to their queries, or link to other results from page one.
Another interesting findings from the survey was respondents largely preferred to click on organic search results than click on advertisement.
Paid method
This is another route to making first page on relevant keywords on search engines. Advertisers bid on keywords and they pay per click once browsers get to your website through your link from the search page.
This requires you to have a good budget, and expertise to get good results. Results can be instant if done expertly.
you can advertise on:
Search engines
Search engines like Google, and Yahoo have Google ads, and Yahoo ads. Advertisers bid for keywords, they pay per click once there’s a click on your link to your website or online store.
Other people’s website
You, or advertisers like Google and Yahoo can pay owners of particular websites to advertise on their platform. Owners of websites are then paid each time there’s a view on your ads displayed on that website. This is called pay per impression or pay per view.
Social media
Social media helps you connect with people on a personal level. You can really make a good impression of your business by having a good social media presence that connects with the people.
Take clean pictures, engage in quality conversations on relevant topics, showcase your expertise as a thought leader in your business.
Be creative.
Facts about social media
There’s been a staggering number of social media users in the world. Reports show there are over 3.5 billion active users.[emarsys, 2019]
Statistics show that one person spends 3 hours on average on social media everyday.
[globalwebindex]
Your task is to maintain steady flow of buyers while also building a brand people can trust through good farming practices and quality online presence.
Tips
Make sure you understand the nitty-gritty of running an online ads campaign, if you don’t, hire someone or outsource professionals to run for you.
In the case of advertising with a particular website, make sure you do your findings on the website to ensure their kind of visitors are the kind who can buy your product.
Your website should contain the following:
Company name
Vision and mission statements and a little bit about you. Eg when it was founded, your partners, your present customers, etc.
Description of your business values
Your products and production capacity
Production description
Email and contact information
Order fulfillment and getting paid
To export your goods, most exporters make use of freight forwarders, and custom brokers as they make lives easy for them. These are specialists in moving goods to different places in the world, and also handling of custom related issues.
Tips
Ensure your cocoa is exported in well ventilated cool, and dry conditions to ensure the beans can arrive at buyer’s destination without blemish.
Never agree on any agreements until you’ve agreed on payment method
Depending on your negotiation skills, your buyer can bear part of the shipping cost. Of course this would only work if there’s the element of trust in the equation.
If the relationship is not strong enough, buyers would most likely prefer a POD (payment on delivery) arrangement. If that be the case, it’s not a bad idea to request the buyer make down payment to show they’re serious about doing business with you.
In finding a freight forwarder, you should look out for those with good experience in shipping cocoa to your buyer’s location.
In your agreement with your buyer, ensure pricing is factored in. In Nigeria, the futures commodity exchange is still a concept the government is looking to support exportation in the country. Futures contracts can help buyers and sellers mitigate risk that occurs due to currency fluctuation. So you can agree with your buyer to peg your commodity price based on current global price such that if it changes in the future, you don’t incur loss.
Know your rights as an exporter to any country. It’s possible some of these foreign buyers can take you for a ride if you don’t know what’s within your rights as an exporter to their country, issues like what happens if your buyer decides to cancel their order last minute? Surely you shouldn’t bear the loss for that.
Now that we’ve come to the end of this guide, we know not everything on this post can be assimilate once, so you can bookmark this and come back to it in the future. Feel free to drop your questions and comments on this topic.
Funding your export business? Depending on the size of commodity you’re looking to export, there are several options for funding available to you. Let’s review some of the options out there, and then you can decide which suits your best.
Commercial banks
This option is best suitable for medium and large scale exporters are more likely to get loan from Commercial banks than small scale or even worse, beginners. These banks would most likely request bank statements showing how much you’ve invested in the business already and cash flow into your business. They’d also require you provide collateral and other necessary documents that show they can get their money back as agreed.
The government
With the government working hard in diversifying country’s revenue from oil, they have continued to roll out several incentives to support non oil-exporters over the years.
Unlike private organizations like the commercial banks, you can get Government support(which can be in form of credits, grants, waivers, subsidies, etc.), at little or very low cost, which would turn out be the springboard to propel exporters to greater profitability.
We will look at several bodies through which government provide these supports:
a. Bank of industry(BOI)
The bank of industry provide several grants and funding support programs for exportation yearly. Most times these funds are released through several other bodies as related to the industry, like NEPC(Nigerian export promotion council), MAN(Manufacturers Association of Nigeria), etc.
b. The Nigerian Export Import (NEXIM) Bank
The NEXIM’s main purpose to provide financing for importers and exporters.
They offer wide range of funding options, such as:
You can check up their website to see explore more options available and how to get them.
c. The NEPC (Nigerian Export Promotion Council)
The NEPC provide export incentives for exporters. These can be monetary, tax or legal provisions put together to support exporters of certain goods and services in Nigeria. There are two financial support programs the NEPC provide to exporters: Export development funds, which is more suitable for beginners and small scale exporters, and Export expansion grant(EEG), for large scale and more experienced exporters. You can always head over to their website to check the processes to get started.
Your buyer
Yes, your buyer can help fund your exportation. You can ask for upfront payment. However this method is often possible on the sound foundation of trust. So few question, why should any business trust you? What are the things about your business that can make any buyer trust you? For a beginner and small scale exporter, can you leverage other several respectable brands to give you much credibility? How do you go about that? It’s all left to you.
Associations
You can also get funding from associations. However you’d most likely have to be a trusted member before you can have such access. The good thing about these associations is the trade and industry knowledge you’d gain as you relate with other like minded exporters. To be a member, most require membership fee plus other vital documents. Although recruitment criteria vary across several associations, they want to add as much quality to their group as possible. They’d want to know if you’d be trusted.
Cooperatives
There are several cooperatives you can join where you can get constant funding to facilitate your trade. The good thing about cooperatives is you can get loans at very low interest, so long as you’re diligent in your paying back of the loan. This method of getting fund is suitable for all exporters of different levels.
Personal savings
There’s no one in this world who can believe in your business as you do. One of your first steps in business would mostly come from you funding your business from your pocket. For small scale exporters, personal funding is a very viable option, because you’re operating on a small scale, it is easier to raise the capital from your savings. In the future should you decide to approach the banks, or any investor for funding your bigger trades, they can listen to you as they can see you’ve been investing in the business.
Friends and family
Friends and family will always be there to support you. Beautiful thing about this is most friends and family might not require interests, some can even give you enough time as you want to pay back- just ensure you refund.
Getting funding for your export endeavor is an essential part of your business, and you will need funds as business grow. You should always look to reduce the risk of funding your export by trying out some of the methods we shared on here. For beginners and small scale exporters, try to be attentive to the several government incentives rolled out, and look for ways to benefit from them.
When we go into business, it is to make profit. For exporters (particularly start up exporters), having an understanding what you should do to be profitable on a regular would help sustain your business. Let’s delve right into it.
Understand how to use hedging to mitigate currency risk Currencies fluctuate. Every day events take place in the world, and these events have positive or negative effect on currencies. Every exporter has to deal with the risks associated with dealing in foreign currencies such that whatever happens you get your projected profit from your export. Imagine the value of GBP(Great Britain Pound) was N450, then two weeks later the value of GBP appreciates to N480. That’s N30 loss per unit on what you’re exporting. But what if you and your customer agreed on the exchange rate N450, and then you both worked out a way such that even if currency falls or rise, both party is assured of not being on the loosing side due to fluctuating currency price? That would be great, right? This is called hedging. Hedging helps both party bullet proof from whatever the price of any currency might be valued at in the future.
Do thorough market research of your target market. Your market research should help you understand your market. It should help you gauge demand level, and how best to stay profitable with the market. Some tips to help your research is following industries relating to the commodity you’re exporting. For example, for a cocoa exporter, the chocolate industry is a good industry to follow. An increase in demand for chocolate is good indication of a booming cocoa exportation to that market.
Secure low interest funding for your exportation. Because you don’t want to get loans that can put pressure on your margins, looking for some low interest loans or maybe government grants should be the way to go for you. Trying to get funds to facilitate your trade can be daunting. So exploring several options is crucial for you to remain profitable.
Be creative with marketing and promotion After you’ve done thorough market research, it is time to start reaching out to your market. There are several way to promote your products to the international market, however, which ever way you choose to reach your customers must be able to give you edge in terms of long term profitability. Another important tip on this is once you’re able to find any customer who can trust you enough to want to do business, don’t disappoint! Your existing customers can bring more customers for you, this serves as a cost effective way to expand your business in your target market. Other ways to promote your business include run targeted adverts online or you can leverage on export agencies to access their network of buyers.
