The effect of the Global Economic Crises is closing in on Nigeria gradually. A recent report predicted that 18 percent of Nigerians would further be classified as being poor in 2009. That mean the gap between the poor and the rich will get wider still. But then, it is said that if the riches of the world were shared between the rich and the poor, in 30 years, those rich would still be rich and the poor would have returned to their normal position. Apparently, the poor and the rich seem to have habits that consistently make them remain in the same position. These habits would be analysed based on assets and liabilities. What is an asset? An asset is whatever you acquire that gives you money to maintain you and your purpose on earth, while liabilities are things you have that require more money to maintain them.

Those called rich are the people whose assets are more than their liabilities, while poor people have more liabilities than assets. What do the poor do so exceptionally well?

1. Value liabilities more than assets.

If you value liabilities more than assets, it is likely you would be poor if you are not already. If all you seek or aspire to have are all liabilities instead of assets, you are most likely poor. It is notable that more students and poor people use more good looking phones than rich people. Cars, clothes, phones are all liabilities and these are things most poor people aspire to have as a status of being rich.

2. Acquire liabilities with income.

Supposing you use your hard earned cash to purchase a car, don’t doubt it- a car is a liability, if we follow our previous definition above- except if you have a mobile shop. If income is directed at obtaining liabilities which requires more money to maintain them, then you have just bought a pipe through which all your hard-earned income would be drained. The issue with rich people is that they earn faster than they spend.

3. Spend income maintaining liabilities.

Definitely once the money is spent on acquiring liabilities, you would require more money to maintain or continue to use them. Poor people spend a large part of their earning maintaining the liabilities they have. Imagine having four cars, it requires more money to maintain the four cars, while assets make more money for you.

4. Spend and try to save leftover.

The spending pattern of the poor is also evident in the fact that once they earn some money they spend them on liabilities and save the left over. After expending all the money on liabilities, the little money saved would be used to settle the debts or costs incurred on maintaining the liabilities they have bought.

5. Save to expend on liabilities.

Poor people may have excellent saving culture, but they may spend it on liabilities. Imagine spending time and life going to work, and saving only to buy a car to use to go to work. A car may not be bad when you have assets in excess of the money you earn in a year.

When saving towards anything, be sure it is towards an asset that may bring more money into your pocket, rather than a liability that would take more from you.

6. Play today, pay tomorrow.

The mindset of delaying gratification is only found in the dictionary of the rich. A poor man/woman would prefer to enjoy the pleasantries of life as soon as some cash enters into their pocket, only for them to regret those decisions in years to come.

If you find a seventy year old woman begging on the streets, what readily comes to mind is to ask what she has been doing? There are too many cases of “have beens” in the earth, who are worth nothing today.

7. Their children inherit debt.

The thirst to acquire more and more might even drive some people to take loans from banks. Other people love to admire such; flashy cars, houses, glamorous clothes and accessories only for them to die and put their children in line for paying back debts owed or for credit card abuse

This is intended to x-ray our behaviours as we position ourselves on the way to the future. We should look at our habits and choices and have no doubt where we hope to end up.

Dragons’ Den, along with bank PHB’s intern and MTN’s Who Wants To Be  A Millionaire are fantastic shows that exemplify and amplify values that can build nations and businesses, rather than skill and talent. I personally believe a nation and its business economies are strengthened by encouraging values that promote nation building, not entertainment. For I see entertainment, gradually becoming the driving force of our national civilization, just as America began a few years back, and are where they are today. It is a fact, non-Americans are the one building its’ economy..

Ok, back to The Dragons, I am impressed by UBA’s assemblage of some of Nigeria’s finest business entrepreneurs who have a traceable beginning and are still in the process of growing their businesses. I personally know Ibukun Awosika, one woman who has risen to join the growing list of Nigeria’s role models (I probably will feature her this month, watch out). To complete this team are Alexander Amosu, the technology Guru / Ringtone Pioneer; Chris Parks, a marketing expert, who remains the only “Whiteman” Nigerian among the pack; Tokunboh Ishmael, an accomplished financier with African Venture Capital Association. Also is the man who just battled the FG on Channels’ closure, John Momoh and Femi Tejuoso, the Private Equity Investor – who remains the brain behind Helios Towers Nigeria Ltd. The programme is being facilitated by Nwaji Jibunoh, who is currently an executive with Phillips Consulting.

The purpose of the episodes is for aspiring entrepreneurs to learn and understand simple reasons why businesses fail and to encourage and teach principles that help businesses succeed.

I: 80% of the time, MONEY IS NOT THE PROBLEM.  

No lesson is more profound.  You will quickly discover this as the pitchers come in one after another. If money were doled out without asking questions, the business failure rate would have been colossal. Trying to place a checklist on the business plans and strategies, you will be amazed at the kind of unintelligent reasons you will discover for not giving cash to the contestants. Imagine people who come to ask for over a million of investors’ fund with just a single sheet of business plan. Many a time, lack of funds has been our number one reason why we think we cannot succeed. But in truth, lack of the right understanding of how businesses work has been a major reason why we would fail every time, even if we were given a lot of money to begin. Imagine another pitcher who comes into the programme asking for over a million to create a business after just testing their products on less than twenty people! An ancient Chinese proverb says that when the student is ready, the teacher will appear.

The idea you need money to start has been overrated. When you start a business, what must lead the way should be your own interest in or love for whatever it is you want to do. Loving what you do miraculously attracts all the necessary resources, people and opportunities. You definitely don’t need money to start. Bootstrapping will stimulate your creativity and that is worth much more than money anyway. When the money comes (the student is ready), you will not only expand the business; you’ll fly.

II. Not only the investment is a risk, the entrepreneur is

 Many at times, we think we are taking a major risk when we are putting the money into the business, but the dragons have shown otherwise. They have depicted that the greatest risk is how much trust and belief we put in the entrepreneur pushing the idea. The success or failure of a start up business rests on the shoulder of the entrepreneur. An entrepreneur with a misplaced priority is a disaster waiting to happen. An entrepreneur who had planned what to do with the remaining of investors’ funds after failure is the worst thing that has ever happened to the business idea. The most important decision made by the Dragons is, ‘can we put our money in this idea, and can we trust this entrepreneurs’ foundation’.

With the way some of the contestants appeared with their plans and proposals, it was Dragons would be committing an industrial suicide if they fell for their goofs, sorry ideas. There were brilliant ideas, but no strategy, no preparation, but they still wanted investors’ funds. They only needed a strong pioneer, a visionary, who had started before he needed money, who had considered his environment and competition before thinking to expand and dine with the sharks. There were investors’ fund, sound business idea; the business only needed its prized asset – the sound entrepreneur.

III. If you don’t pack small stones, you won’t hit it big

This is one of the most important lessons for Nigerian entrepreneurs. We spend a lot of time complaining about the Nigerian factor, the power problem, and the inconsistencies of government policies, we become good at everything except facing the problem with the right perspective and turning the problems into opportunities.

If you cannot move your business without money, you will kill it when the money comes. Go, search for the opportunity, start the business, shut the mouth and get to work, the opportunity of funds will come but never wait for it. If you do not start small you can never grow big. I remember the engineer who spent energy and money to build and patent for a bike-powered tractor. It was obvious he only needed funds for the project to fly. He got it.

 The little stones you pack are the real ones you need to hit it big. The energy and ideas needed to manage a big business is generated at the baby-steps of the project when the limelight is not on you; when you are not under pressure to meet investors’ targets. It was Benjamin Franklin who said that the secret of success when success meets preparation.

 IV. Absolute business illiteracy

Now do not crucify me. But then, It is almost clear to some and to all that most of us and the contestants know the technicalities of the business; how to make soya and orange drinks, running a print firm, but then they’ve only been trained to work as employees and not to run and manage business ideas and finance. Our educational systems need revamping; British colonialists trained us to be employable, not to own businesses. When such educational institutions cannot take you into the future you desire, then your education becomes your responsibility. How to write proposals/business plans, techniques of marketing and product presentation, basics of accounting and management. It becomes imperative to augment your educational certificate with those skills and techniques. I also remember the woman who came asking for investors funds without remembering the name of her business – was that stage fright? Or the man who messed up his financials while hoping to convince the dragons he had credibility? I mean, this lesson is too obvious to ignore.

We need to learn and understand the basics of business and work ethics. That is to say that not everybody should catch the entrepreneurial bug, without first learning…learning and understudying someone else, or serving as an employee.

For now, these are the only few ideas I’ve been able to glean considering I’ve missed about five weeks of the programme. I’ll keep you posted. Any other ideas?