Thread by @greaterbayo

Post-Covid Business Financing Strategies- 7 Questions Businesses Should Ask.

With so many businesses affected by Covid 19, how can businesses prepare for life after Covid 19?

A Thread

First the stats:

44.3m adults in Nigeria own businesses. 23m adults earn their income daily or weekly according to the EFIn Access to Financial Services in Nigeria 2018 Survey. This shows the magnitude of impact when you consider that 1 adult has a minimum of 4 dependants.

Businesses should ask 7 key questions to situate their approach:

1. Does your business have sufficient cash? This speaks to your liquidity. That's the oil that keeps the engine of your business running. Your business needs cashflow to survive. It helps you survive day to day.

During this pandemic, cashflow is more important than profit.

2. What cost have you been able to do without? Your cost structure is important. Have you reduced travel, staff & other costs? Any cost you're able to outsource? Delineate your costs between core and non-core. Core costs relate directly to the business. Non-core are incidentals.

3. Are you financially exposed to any lender? Do you have existing loans? Are you able to service your obligations? What are your financing options?

4. Is your business exposed to fluctuations in foreign exchange? Have you dimensioned the risks? Can you explore local substitutes for your needs?

5. Do you have trade receivables? Can you shorten the cycle? Do you have a robust collection process?

6. Do you have liabilities? Are there other businesses you owe maybe for raw materials? Can you negotiate with them?

7. How have you been able to leverage on technology during this pandemic?

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