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WHY ADVERTISING WOULD KILL YOUR BUSINESS.

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Would anyone think why advertising would kill your business? With the so much importance laid on advertising and how the lack of it would kill your business, nobody thinks how actually advertising has killed a lot of businesses. It’s the seemingly one important factor that grows businesses especially new businesses gaining entrance into the market or old businesses seeking entrance into new markets. However, when your business has not been set right advertising and marketing would only help to kill your business faster.

Here is why advertising would kill your business faster than you think.

1. User Experience: This is the most neglected reason why advertising would kill your business faster than you think. Your product might be awesome but if users have bad experiences using the products, advertising that product isn’t the most important thing to do. Here is the principle, “for every experience a user gets using your product, they would tell seven more people”. Now that use of social media is on the increase, you can’t tell the number of people that get to read their narration about the product. Assuming it’s a bad experience and you keep investing heavily in advertising you are only multiplying the number of users who say a lot of bad things to millions of other people around the world.


With the 2 consecutive bad user experience, Boeing experienced between September 2018 to March 2019 reporting the crash of their 737 max, a newly launched model of their airplane with about 157 death record on the second crash with no survivor, imagine if they keep selling that product or keep advertising the product when the governments of different nations are banning the flight from being used in their countries. If you are the CEO of Boeing, how would you remedy the brand image? By Advertising? Of course not!

2. Brand Failure: To build a brand is to sell a promise and live up to it. Apple Brand building has been an awesome one bringing them to the most valuable brand in the world in 2018. How did Apple build its brand? Giving a promise and living up to it. People won’t judge you by what you didn’t promise but by what you promise. If you promise quality and under-deliver especially as a small business, then users will be disappointed and definitely would share their disappointment with many other people. The more you sell that promise through advertising, the more you kill your brand and kill Trust people have for your business which in turn would Kill your brand Loyalty. To remedy your brand loyalty, see these 7 ways to build customer loyalty again.


Read Also: How to Build Trust in Business

Samsung once had to recall phones people complained that it caused fire explosion, though not all users where affected, they recalled all of the phones back. Why? to stop Bad user experience. Fixed the issue and sent a better product back to the users. This increased Trust, Loyalty and in turn increased good Reviews and created a better user experience and attractive testimonial. Lexus too once did a recall. With bad brand and bad user experience, advertising would kill your business faster.

3. Bad product: This is the most dangerous reason why advertising would kill your business faster than you think. Get your product right before sales. It’s understandable for software to be released in versions because nobody gets it fully developed at first launched. However, let your first release or your minimum viable product (MVP) at least be up to your market standard. With a bad product in the market, advertising would kill your business faster. If your business needs so much advertising/marketing to sell in the first place, then the products aren’t good enough.

In conclusion: Advertising is great, Big companies still spend a huge amount on advertising and marketing. Advertising is a great tool for a new product launch or new market penetration However, only when you have solved the 3 factors discusses above right. Don’t kill your business with your own hands. When you discover these loopholes in your competitors, you can kill them faster by advertising for them anonymously but be sure they are not in for a short term return like what we call “hit and run”

Favour Emeli is passionate to see businesses grow and yield increasing profit. He consults for business and has helped some secure grants and funding. He is the Author of 365days Business Devotional For Entrepreneurs

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    Financial Institutions: The A-Z Guide With Top 10 Examples (+ quick easy tips)

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    Financial Institutions are a part of our daily lives. This is because almost everyone living in a developed economy has a need for the services of financial institutions.


    They encompass a broad range of business operations within the financial sector including banks, trust funds, credit unions, underwriters, insurance and investment dealers.

    So, if you’ll like to learn more about financial institutions, then you just got lucky as this article will teach you all you need to know about financial institution, its types, importance, and functions.

    Let’s get started!

    What are Financial Institutions?

    Financial Institutions are businesses that focuses solely on financial and monetary transactions such as loans, deposits, investments and currency exchange.


    According to Wikipedia, financial institutions, otherwise known as banking institutions are corporations that provide services as intermediaries of financial markets.

    Hence, you can say that financial institutions are responsible for the supply of money into the financial market. Without them, no financial transaction can happen.

    Large financial institutions such as JP Morgan Chase, HSBC, Goldman Sachs or even Morgan Stanley can control the low of money in an economy.

    Furthermore, almost everyone deals with various financial institutions daily. Whether it is depositing money, applying for loans, exchanging currencies, investing into the stock market, or acquiring a new venture.


    Thus, this makes them very important to the economy of a nation, and governments personally oversees these institutions.

    Importance of Financial Institutions

    Financial institutions are very important factors that contribute to the growth or failure of the economy of a nation. Hence, they are very crucial factors.

    Below are some of the highlighted importance of financial institutions

    • Firstly, financial institutions promotes direct investment by the customers
    • Secondly, they explain all the risks associated with financial transactions to their customers
    • Thirdly, they provide various kinds of financial services to their customers
    • Next, financial Institutions helps in forming the liquidity of the stock in case of an emergency
    • Finally, they are known to provide an attractive rate of return to their customers

    Functions of Financial Institutions

    Financial Institutions perform a wide variety of financial functions to its customers. It involves a wide range of business financial activities including trust funds, banks, insurance companies, brokerage firms, and investment dealers.

    Below are the functions of financial institutions.

    • Financial institutions provide loans and advances to customers.
    • They serve as a depository for their customers.
    • They offer high rated consultancy to the customers for their beneficial investments.
    • Some financial institution offers a high rate of return in the case of investment.
    • They help to minimize the monitoring cost of the company.
    • All the finance related work is done by the financial institution or on behalf of the customers.

    Types of Financial Institutions

    Financial institutions offer a wide range of products and services for individuals and commercial clients. Hence, they vary by size, scope and geography.

    There are three major types of financial institutions. They are;

    • Depository Institutions
    • Contractual institutions
    • Investment institutions

    #1. Depository Institutions

    These are financial institutions that accept and manage deposits and make loans. A depository institution provides security and liquidity in the market, uses money deposited for safekeeping to lend to others, invest in other securities, and offer a fund transfer system.

    Hence, they must return the deposit in the same order it was given.

    Additionally, they serve as a connection between the public companies that issue financial securities and the investors or shareholders.

    Depository institution includes banks, building societies, credit unions, trust companies and mortgage loan companies.

    RELATED POST: Financial Planning: Overview, Types, Importance, Concept (+ Free PDFs)

    Functions of a Depository

    Below are the functions of depository institutions according to corporate finance institute.

    #1. Serves as a link between the public and investors/shareholders

    A depository financial institution functions as a connecting link between the public companies that issue financial securities, and the investors or shareholders. The securities are issued by agents associated with depositories, who are known as depository participants. The agents are responsible for transferring the securities from the depositories to the investors.

    #2. Eliminates risk related to owning physical financial securities

    A depository institution allows traders and investors t hold securities in dematerialized form; thus, eliminating the risk related to holding physical financial securities. The buyers and sellers now do not need to check whether the securities have been transferred successfully without any loss or theft. The depository system reduces such risks by allowing the securities to be held and transferred in electronic form.

    #3. Allows the provision of loans and mortgages to interested parties

    A depository holds the securities of customers and gives them back when the customers want. The customers receive interest on the deposits, while the depository earns even more interest by lending the deposits to other people or businesses in the form of loans or mortgages.

    #4. Accelerate the process of transferring securities

    When a trade occurs, a depository transfers the ownership of securities from the account of one investor to another. It helps in reducing the paperwork associated with the finalization of a trade and accelerates the process of transfer of securities.

    Types of Depository Institutions

    As mentioned earlier, the following are the main categories of depository financial institutions.

    #1. Banks

    A bank is a financial institution that accepts deposits from the public and creates a demand deposit while still making loans.

    The bank can decide to lend directly or indirectly through capital markets. Banks can either be commercial or cooperate banks. However, we will stay within commercial banks.

    The range of services offered by commercial banks depends on the size of the banks. For smaller banks, their services are limited to consumer banking, small mortgages, simple deposits and loans.

    However, for larger banks, their services can include foreign exchange-related services, money management and investment banking.

    #2. Building Societies

    A building society is a financial institution owned by its members as a mutual organization. They offer banking and related financial services, especially savings and mortgage lending.

    Building societies are similar to credit unions in organizations.

    More so, rather than promoting thrift and unsecure business loans, building societies provides home mortgages to its members.

    #3. Credit Unions

    Credit unions are financial cooperatives owned ad controlled by the members of the group. It operates on the principle of people helping people, providing its members credit at competitive rates, as well as other financial services.

    The profits are either paid to the members as dividends or reinvested into the organization.

    Since credit unions are non-profit institutions, they pay no federal or state tax.

    #4. Trust Companies

    A trust company is a financial institution that acts as a trustee or agent of trusts and agencies. It can be owned or owned by a bank or law firm.

    A trust company manages investments, keeps records, manages assets, prepare court accounting, pay bills, medical expenses, charitable gifts and other distributions of income.

    #2. Contractual Institutions

    Contractual institutions are financial institutions that get their funds through contractua agreement.

    Usually, when they obtain these funds, they invest them into the capital markets. Also, Contractual institutions have a steady inflow of funds from their contractual agreement, hence, they don’t experience difficulties with liquidity.

    This makes them perfect for investors, as they can make them long-term investments in securities and common stock.

    More so, they can predict their liabilities, fairly accurately and thus they don’t have to worry about losing funds.

    RELATED POST: PRINCIPLES OF FINANCE

    Types of Contractual Institutions

    The following are the main categories of contractual institutions.

    #1. Insurance Companies

    The most familiar non-bank financial institution are insurance companies. They are the oldest form of financial services and hey provide insurance to either individuals or corporations.

    There are several types of insurance companies, but the most popular under this category are the life insurance companies.

    Life Insurance Companies

    Life insurance companies sell life insurance policies that protect the beneficiaries against financial hazards that follow the death of the insured person.

    Depending on the contract, other events such as terminal illness or critical illness can also trigger payment.

    The policy holder ( insured person) typically pays a premium, either regularly or as one lump sum. Other expenses, such as funeral expenses, can also be included in the benefits.

    These financial institutions acquire funds through payments of premiums by individuals who pay to keep their policies in force.

    Life insurance companies can calculate liabilities with a fair degree of accuracy using mortality tables. As a result, they use funds to buy longer-term securities—primarily corporate bonds and mortgages. 

    #2. Pension Fund

    Pension fund is any plan, fund, or scheme that provides retirement income. They usually have large amounts of money to invest and are the top investors in listed or peivate companies.

    Additionally, Pension funds are very crucial to the stock market especially there’s a large number of institutional investors.

    The Federal Old-age and Survivors Insurance trust Fund is the world’s largest public pension fund which oversees $2.72 trillion USD in assets.

    #3. Investment Institutions

    Investment institutions, as the name implies are financial institutions that are focused on investments.

    They know which security, or stock market to invest in and can guarantee rate of return on an investment.

    Generally, they facilitate investments in financial assets by individuals and institutions by pooling resources and investing them according to desired objectives.

    Types of Investment Institutions

    The financial institutions under this category are;

    • Investment banks
    • Underwriters
    • Brokerage firms.
    #1. Investment Banks

    Investment banks specialize in providing financial services designed to improve business operations, such as capital expenditure, financing, and equity offerings, including initial public offerings (IPOs).

    According to Wikipedia, an investment bank is a financial services company or corporate division that engages in advisory-based financial transactions on behalf of individuals, corporations, and governments.

    Traditionally, investment banks are associated with corporate finance, and assist in raising financial capital by acting as a client’s agent in the issuance of securities.

    More so, an investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services ( fixed income instruments, currencies, and commodities).

    While an investment bank is also referred to as a regular “bank”, its operations are entirely different and big companies depend solely on them.

    RELATED POST: CORPORATE FINANCE: The Complete Guide (+ free courses)

    #2. Underwriters

    Another type of investment financial institution is Underwriting services. Underwriting services are provided by some large financial institutions and involve a situation whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liability arising from such a deal.

    An underwriting agreement may be created in different situations like insurance, issues of security in a public offering, and bank lending.

    #3. Brokerage Firms

    Brokerage firms are financial institutions that help you buy and sell securities. They act as the middle man between the buyer and the seller of the securities and become the principal party to the deal.

    Depending on the brokerage firm type you choose, you can either buy securities through telephone, smartphone, or internet.

    Also, brokers can represent the buyer or the seller but not the both at the same time. And they are very crucial in the purchase of financial instruments.

    Usually, brokers have the tools and resources to screen potential buyers and sellers for the perfect match. This is because, they are compensated by commissions after a successful transaction.

    Brokers are generally cheap especially in smaller markets with smaller accounts, or with a limited line of products.

    Wondering which financial institution to work with? Let’s go over the top financial institutions in the world below.

    RELATED POST: Student Finance: Grants, Loans, Applications (+ How to Start Guide)

    List Of Financial Institutions

    There are several financial institutions in various countries of the world. However, only a few make it to the top as some of the best financial institutions.

    Below is a list of the top financial institutions in the world as well as their assets, capital, and revenue.

    Bank (Rankings according to Accuity)

    BanksAssets( $M)Capital ($M)
    Industrial & Commercial Bank of China Limited4,319,862.0080,709.00
    China Construction Bank Corporation3,649,392.0035,870.00
    Agricultural Bank of China Limited3,569,338.0061,676.00
    Bank of China Limited3,266,821.0042,236.00
    BNP Paribas SA2,427,625.0030,358.00
    China Development Bank2,367,945.0060,437.00
    JPMorgan Chase Bank National Association2,337,646.002,028.00
    MUFG Bank Ltd2,217,261.0015,830.00
    Crédit Agricole SA1,982,329.009,705.00
    Japan Post Bank Co Ltd1,950,237.0032,364.00

    Insurance Companies (Rankings according to Insurance Information Institute)

    Insurance CompaniesRevenue( $)Industry
    Berkshire Hathaway254,616Property/casualty
    Ping An Insurance184,280Life/health
    AXA148,494Life/health
    China Life Insurance131,244Life/health
    Allianz130,359Life/health
    Japan Post Holdings109,915Life/health
    Assicurazioni Generali105,921Life/health
    Prudential93,736Life/health
    Legal & General Group90,615Life/health
    Aviva89,647Life/health

    Conclusion

    Financial Institutions are all around us, offering different type of financial products or services.

    So, as a customer you should first of all determine what type of financial service you want before choosing which financial institution you’d like to work with.

    Additionally, it is imperative that you do proper research before investing your money in a financial institution.

    I hope this post helps you.

    Good luck!

    PS: Don’t have a business plan yet? Or you’re still a bit confused about the idea of a business plan? Don’t worry, we got you! Click on the button below to have access to our list of workable business plans that has helped a lot of business owners in over 10 countries of the world.

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    Financial Planning: Overview, Types, Importance, Concept (+ Free PDFs)

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    Financial planning for a business is one of the critical aspects of running a business. The process is designed to predict the business’s financial future and to determine the best way to use the companys financial resources.


    The end product, which is a financial plan, serves as a roadmap that guides all your future financial endeavours.

    Want to take your business to the next level? Then let’s get to know all about the financial planning process.

    It’s your lucky day because this article is going to teach you all you need to know about financial planning for your business.


    Let’s get started!

    What is a Financial Plan?


    A financial plan is a document containing your business current financial situation and the several methods you intend to take to achieve your financial goals.

    To create a solid financial plan, you’ll need to analyze the main components of your business. In other words, the part of your business where the majority of the money goes. Hence, to discover this, ask yourself these questions.

    • How much money are you taking in and paying out?
    • What are your biggest costs, and where are they likely to increase spending the most in the near future?
    •  Where will you be able to cut costs?
    • How is competition likely to affect your business?

    Having the right answers to these questions will enable you create a financial plan that captures your current financial situation and future expectations.

    Now, to the main topic of the day.

    What Is Financial Planning?


    Financial planning is the process of determining how a business will achieve its goals and objectives. Generally, for every business to grow, it needs to have money to expand, hire more staff and buy tools required for production. So, creating a financial plan for your business will help you make better finance decisions.

    You can decide to create it independently or with the help of a certified financial planner.

    However, to properly plan your business, you need to have a well-defined business vision, goals and objectives. This is because, the Financial Plan describes each of the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the timeframes involved.

    It involves the following activities:

    • Analyzing the business environment
    • Identifying any risks and issues with the budget set.
    • Confirming the business vision and objectives
    • Calculating the total cost of each type of resource
    • Quantifying the amount of resource (labor, equipment, materials)
    • Summarizing the costs to create a budget
    • Identifying the types of resources needed to achieve these objectives

    Since financial planning is one of the major aspects of financial planning, it is important you critically think it through and analyze it before deciding to implement it.

    Because a poorly crafted financial plan from a bad financial planning process can cost you your business.

    Yes, I really mean it.

    RELATED POST: Financial Risk Management: All you need to know (+practical examples)

    Importance of Financial Planning

    The importance of financial planning cannot be overemphasized. Just as you need a business plan to properly direct your actions towards the success of your business, you also need a financial plan that will guide you on the several financial investments you’d take over the course of your business.

    So, below are some of the importance of financial planning for a business.

    1. Firstly, financial planning provides your business plan with enough details required to pull the business through. It shows that the business can be established financially and can equally be monitored till it starts bringing in profits.
    2. Secondly, it shows the commitment of a company to sound business practices. That is the ability to meet financial goals and spend wisely. This can encourage external investors and increase the potential for long-term success.
    3. Thirdly, it ensures there’s a balance between the inflow and outflow of money in a business.
    4. Next, It helps to sustain growth and expansion programs that move the business forward.
    5. Again, it ensures the company has enough funds to operate
    6. Finally, financial planning reduces uncertainties of a business which can hinder the company’s growth.

    Regardless of all these importance, some business owners still neglect the need for a financial plan. Some may even bypass the idea and believe they have it all figured out which isn’t entirely so.

    The truth is, financial planning isn’t just for large companies. Even with your small startup, you can create a financial plan for it to enable you remain on track towards the success of your business.

    So, while you can’t guarantee that everything will play out as you’ve planned, having a financial plan for your business prepares you for what is ahead.

    Objectives of Financial Planning

    There are a lot of financial goals to set, hence the need for financial planning. Below are some of the objectives of financial planning.

    #1. Determining Cash Flow

    The main need for financial planning for your business is to know where your money is going. Having a record of all the finances that go into your business will enable you to know what you really need to spend on and what expenses you need to cut down on.

    One way to determine this if you don’t have a financial plan yet is to check through your credit card and checking account statements. Together, there would be traces of what you spent your money on before you realized that you need to do financial planning for your business.

    To track your average spending per month, add up all your expenses in your statement and divide it by 12. This way you wouldn’t overestimate or underestimate what you spend monthly.

    #2. Determining Capital Requirements

    Determining your capital requirements depends on factors like cost of current and fixed assets, promotional expenses and long- range planning. Capital requirements have to be looked with both aspects: Short- term and Long- term requirements.

    #3. To ensure that financial resources are maximized in the best way possible to get maximum returns on investment.

    #4. To determine the amount of capital required in the business. This includes decisions of debt-equity ratio, both short-term and long- term.

    #5. To create financial policies with regards to lending, borrowing, and cash control

    RELATED POST: FINANCIAL RESOURCES: 7 Best Sources too look out for in 2021 (+ Detailed Guide)

    Types of Financial Planning Process

    The financial planning process for a business involves the steps taken to come up with a good and workable financial plan. Hence, below are the types of financial planning processes you can adopt.

    • A short-term financial plan
    • Medium-term financial plan
    • Long-term financial plan

    #1. Short-term financial planning

    This type of financial planning process lasts for as long as a year. Here, you take into consideration your current financial status and the financial resources at your disposal that can help you meet your financial goal.

    #2. Medium-term financial planning

    In this type of financial planning process, you are planning for a longer period of time. Anything between two to five years. You take into consideration your current income status, your business sector, If there’d be any switch to another sector, future income increment, and growth prospect.

    #3. Long-term financial planning

    Here, you are planning for a longer period of time, From 5 years and above. You take into consideration, the different types of investment opportunities that are open to you. To do this, you need consistent and systematic planning, savings, expenditure control, tax savings and carefully following the financial planning strategy.

    Concept of Financial Planning For a Business

    Generally, the concept of financial planning revolves around the following;

    • Cash flow management
    • Investment management
    • Debt Management
    • Tax Management

    #1. Cash Flow Management

    This involves managing the cash flow of your business. In other words, keeping an eye on the inflow and outflow of funds.

    To properly do this, you need to estimate your present and future expenditure, an keep the expenses under control, because that’s the fastest way to achieving your financial goals.

    In addition, it involves creating a reserve of emergency funds for unforeseen circumstances. I call it, “your life support”.

    #2. Investment Management

    To acheive those financial goals, you’ve set, you need to invest in various investment instruments through out your life.

    Doing the right investment is the surest way to accumulate enough funds to spend on the very important aspects of your life.

    #3. Debt Management

    This involves managing all the cash you borrowed in time past. Although they say you don’t always pay off all your debts, the best thing is to keep it at a minimal level.

    If your business can’t afford to sustain an expansion or a diversification into an entirely new product. Then there’s no need going to borrow money for an expansion in the first place.

    Putting your debts in check helps you control the amount of money your business spends externally.

    #4. Tax Management

    Paying of taxes is a major factor in your expenditure list. Hence, to maximize your real income, tax exemption and tax liability is of utmost importance.

    Consult investment planners or tax consultants to recommend the best tax saving instruments you can invest in, through various government and private investment scheme.

    RELATED POST: What Is BUSINESS CYCLE?- Definition, Internal and External Causes

    What is the Financial Planning Process?

    Financial Planning is process of creating objectives, policies, procedures, programmes and budgets regarding the financial activities of a business. This ensures effective and adequate financial and investment policies.

    However, to come up with a good financial plan, there are steps you must take that complete the financial planning process.

    Below are the steps involved in the financial planning process.

    #1. Set financial goals

    The main reason you are coming up with a plan is because there is a goal that you need to meet. So, wonder why it’s the first step to financial planning?

    Set realistic financial goals. Keep it achievable within the period of time you’ve set for it. Separate your needs from your wants.

    Also make it inspirational. What do you want your business to look like in the next five years? How many assets do you want to acquire in the next 10 years?

    Your goals need to inspire you or you wouldn’t work towards achieving them.

    #2. Gather your financial information

    In this step, you need to gather all the current financial information about your business. This is because the financial planning process depends on the quality and clarity of the information you have at your disposal.

    Here’s a guideline.

    • Find out what your income and expenses are, assets and liabilities, as well as, risk attitude.
    • Know where your money is. Know exactly what’s coming in, what’s going out, and how it is going out.
    • After you have created a financial plan, then the next thing to do is to
    • Find out if there are cash diversions anywhere and tackle them squarely.

    #3. Analyze your business financial information

    For this segment, you can decide to hire a financial adviser.  It involves monitoring all the financial information you have gathered about your business. Ensure what is on paper is exactly what’s happening in your business.

    Through analysis, you or your financial adviser will be able to determine what exactly your financial situation is, identify areas of strength and weakness, and narrow down your financial actions to what will truly benefit the business.

    #4. Create a financial plan

    Having followed the above steps till now, its time to create a financial plan. The plan is developed bassed on the final information you have from step 2 and 3.

    Additionally, the financial goals you’ve set will be included, to help you work towards achieving it.

    Your financial plan will include:

    • Net worth statement (a balance sheet)
    • Annual consolidated tax calculation
    • Annual cash flow report (displaying surplus or deficit)

    Now, you have a clearer picture of what you are looking to attain.

    #5. Implement your financial plan

    Once all the other steps are done, its time to implement what you have created. Usually, there’d be a recommended course of action to follow in line with the new financial planning process.

    A typical course of action may include;

    • Income and expenses adjustment
    • A new investment strategy
    • Or additional insurance.

    Either way, you’d implement the results from your planning process, and come up with suitable plans for your business.

    Personal Financial Planning Process

    This process involves strategically planning your finances for your future. It involves monitoring your income, expenses and debt.

    This process is not just for those with a lot of money. Its for everyone who has an income and expenditure. And at least 70% of Americans belong to this category.

    A well-planned finances will go a long way in saving your future.

    Here are the steps to take

    #1. Define your financial goals

    The first step in financial planning is often times the hardest. Because to clearly define your financial goals, you need to start asking yourself questions like. where do your see yourself in five, ten years?

    This helps you to consider what you value in life and determine what kind of life you want to live in the future.

    #2. Prioritize your goals

    Now that you have an idea of your financial goals for your future, its important that you prioritize them above anything else.

    Prioritize the important aspects of your life and save towards them. For example;

    • Save for retirement
    • Save for your children’s trust fund
    • For a down payment on a home
    • Save to go out of a debt

    Remember the 50/30/20 rule? Where 50% of your income goes to regular bills and expenses, 30% goes to personal needs and 20% goes to saving? Yes, employing it at this stage is really advisable.

    #3. Create a budget plan

    Yes, after you’ve arranged your needs in order of importance, create a budget plan and stick to it for the rest of your life.

    The budget will be based on all your incomes and expenditures. Here’s how to create one.

    • Make a list of your income and expenditure over a 30-day period
    • Group your expenditures into fixed and variable costs. Fixed means it’s the same amount, e.g rent while variable costs mean that it changes over time e.g groceries, night outs, etc.
    • Analyze your variable expenses and identify areas you can cut back.
    • Save that amount you’ve decided to cut back from your expenses
    • Review your budget monthly for possible adjustments.

     RELATED POST: Personal Finance: Basics, Importance, Types, Management ( + Free Softwares)

    Top Financial Planning Apps

    Below are some apps you can use to aid you in the financial planning process.

    Financial planning pdfs and research papers can be found online from financial reearchers across the globe.

    In Summary

    Financial planning for a business can be really hard because of some variables that affect the business. For instance, consumer behavior toward a new product or a change in the price of an old product is hard to predict, and this affects the finances of a business.

    Regardless, its still something that is worth trying as its better to plan and have a model, than to leave your business finances in the hands of your business. Literally.

    As you read this article, I hope it helps you make a good financial planning decision.

    Good luck!

    PS: Don’t have a business plan yet? Or you’re still a bit confused about the idea of a business plan? Don’t worry, we got you! Click on the button below to have access to our list of workable business plans that has helped a lot of business owners in over 10 countries of the world.

    Continue Reading

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    SME loans: The Updated 2021 List (+Detailed Application Guide)

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    What is an SME loan?


    An SME (Small and Medium Enterprises) loan is elementary funding of small and medium-sized business enterprises. The SME loan assures a thin gap of credit for attaining the borrowing needs of small and medium scale enterprises. It can be used as working capital as well as for long term requirements.

    Purpose of SME loans.

    As a matter of fact, an SME loan serves as working capital for a long time, he loan ensures that the borrowing needs of SME’s are met right away, and again, it is confirmed after checking the business nature, cash flow, the trend, and climax requirements.

    #1. Eligibility:

    To be eligible for this loan, one should meet up with the specified profits under the MSMED Act of 2006 for SME and also the microwave enterprise.

    #2. Security:


    Securities (collaterals) are needed to access some SME loans while requires no collateral. Some demand collateral depending on the amount you request but mostly when you come from a registered organization no collateral is needed.

    Features of SME loans.

    #1. It is easy to access.


    #2. Interest rates are attractive and also affordable, depending on your business strength.

    #3. The documentation is not rigid.

    #4. However, this entails easy repayment.

    #5. Creditors can offer you up to 2 years before you pay back.

    Some SME loans in Nigeria.


    In Nigeria, SME loans are also accessible and once you meet up the requirements, you will get them. In reality, some banks offering SME loans in Nigeria includes the UBA, GT BANK, the Central Bank of Nigeria, and other governmental banks like Bank of Agriculture, Bank of Industry, and the Development Bank of Nigeria.

    SME Loans without Collateral in Nigeria.

    In Nigeria, some platforms/banks issue loans without collateral and they include;

    #1. United Bank of Africa (UBA):

    Firstly, UBA has a program “NO WAHALA LOAN” and this is without collateral and might borrow loans for SME or to fix your car, pay bills, and for other emergencies.

    #2. GT Bank:

    Secondly, the GT Bank “quick credit” is super-fast and can be gotten in just two hours of official sanctions and this loan does not require paperwork. ou get it by dialing a shortcode and it’s a maximum of 5 million naira.

    #3. First Bank of Nigeria (FBN):

    Thirdly, the FBN operates the “first edu” loan and this is available for private educational sectors that are registered with the Corporate Affairs Commission (CAC). The loan obtainable is up to 10 million naira.

    4) First City Monument Bank Limited (FCMB):

    FCMB provides the following loans without collateral:

    #1. Auto Loan: This loan enables customers to own a car and pay over time.

    #2. Salary Top-up: This loan grants you access and grants you payment before payment.

    #3. Fast Cash loan: This grants instant cash to customers, up to 100,000.

    #4. Premium Salary loan: This grant is up to a minimum of 2 million naira.

    To access these loans, just dial *329# USSD code.

    On the other hand, banks like WEMA Bank, Access Bank, Stanbic Bank, and Fidelity Bank have loan programs without collateral. But for online purposes, you can search for the following platforms to get a quick loan without collateral in Nigeria.

    They are as follows: GROFIN, SMEDAN, LYDIA.CO, AELLA-CREDIT, ZEDVANCE, PAYLATER, KIAKIA.CO, ONE-FI, SPECTA, and QUICK CHECK.

    Federal Government SME loans.

    Basically, the Federal Government has released new details on the Micro Small and Medium Enterprises (MSMEs) support scheme being rolled out under the National Economic Sustainability Programme.

    Accordingly, estimate provides sum of N50 billion will be used to provide payroll support, N200 billion for loans to artisans, and N10 billion support to private transport companies and workers

    Correspondingly, the government disclosed in a tweet on the official handle of the government, the support scheme will include a Guaranteed Off-take Scheme for priority products, and an MSMEs Survival Fund.

    The Bank of Industry is there to provide transformation of Nigerian industrial/manufacturing sector.

    As a result, there are several intervention funds under the Bank of Industry. Examples include:

    #1. N235 BILLION CBN INTERVENTION FUND FOR MANUFACTURING RE-FINANCING AND RESTRUCTURING FACILITIES OF BANKS’ LOANS.

    #2. N300 BILLION CBN POWER AND AIRLINE INTERVENTION FUND (PAIF)

    #3. FGN SPECIAL INTERVENTION FUND FOR MSMEs (National Enterprise Development Program)

    Read More: Federal Government Grants

    Development Bank of Nigeria Loans (DBN).

    This is another of the Government SME Intervention funds that so many SME owners in Nigeria don’t know about. However, the DBN exists for one purpose, o alleviate the financing constraints that micro, small, and medium scale enterprises face in Nigeria.

    To qualify for a DBN loan, you must meet these criteria:

    #1. Be involved in productive enterprises.

    #2. Must be a customer of a certified financial institution.

    Agric Small Medium Enterprise Investment Scheme (AGSMEIS).

    The AGSMEIS initiative is specifically one of the many Federal Government Intervention efforts to promote agri-businesses in the country. It also provides support to other SMEs to facilitate employment generation and sustainable economic development.

    Furthermore, MSMEs can apply for up to N10 million at a return rate of 5% per annum. Some of the objectives of this scheme include:

    #1. Provide finance to Nigerian SMEs.

    #2. Generate employment opportunities for Nigerian youth.

    #3. Equally, facilitate sustainable agricultural practices and develop an efficient agricultural value chain.

    #4. Boost managerial capacity in SMEs and Agri-businesses so that they can grow to become huge organizations.

    Some sectors of the AGSMEIS caters for the following:

    1. Agriculture
    2. Health
    3. ICT
    4. Creative Industry
    5. Production and Manufacturing
    6. Services (restaurants, hospitality)

    World Bank SME loan:

    Comparatively, World Bank data, financing, and know-how have helped millions of SMEs to gain access to financial services to manage risks, survive temporary cash-flow constraints, and grow; thus creating jobs and raising incomes. The World Bank helps more than 60 countries provide an enabling environment for MSMEs, with an active portfolio of US$3.2 billion for MSME support through 38 active lending projects, with many more MSMEs benefiting through WB-supported financial institutions.

    How to apply for SME Loan.

    #1. Submit Application:

    Simply enter your personal, business and also financial information to receive an MSME/ SME loan.

    #2. Upload Your Documents:

    If you applied online then upload your digital data for verification but if offline submit your documents to the nearest branch.

    #3. Get Approved:

    Before accessing this loans just make sure you get approved legitimately to avoid any complications.

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