Friday, 29 July 2016

True Revelation - How I Went From N150,000/month To N0.00 Collapsed Business

Our Reader Wrote:

Keying into the trend and latest happening is a sure way t Find new business opportunity and key into them. Another thing which I have come to realize as a result of my collapsed VPN/Free Browsing Business, is that every product have a life cycle and failing to understand when to key out of a business can
course colossal losses and leave you with a lot of regrets, as well as valuable lessons.

This is my story.

It all started back in 2012 when MTN BBC subscription works fast and free when configured to a VPN like PDproxy and the likes, I'm sure you remember.

I just finished secondary school and because of the Nigerian factor and my bad attitude towards studying then, I couldn't secure admission into a university.

I decided not to just stay at home doing nothing, but start a business, and I happened to be conversant with Computers and Web Technology so I decided to start my web consultancy business.

My goal was to launch two products

1. Web design

2. VPN/Free Browsing Business.

I needed a capital of N120,000 to start up, from programming the VPN software, to getting Servers and printing proposals and others.

Nigerians hate risks, I found it so hard to raise that money, but luckily, a friend of my brother bought into my vision. He provided the while capital with an agreement that he receives 40% of Net Profit, and that I help him directly manage his importation of perfume bottles from China. I was indirectly serving him and paying him for it.

I had no choice but to agree since he was my only hope of capital.

Fast word to four months after, we successfully set up the VPN, did both local and online promotion and we had over 200 clients Paying N500 for server to browse free per month.

The money was steady coming, I even forgot I was supposed to develop a web consulting business in which my primary target market was Private Nursery, Primary and secondary school. To introduce online payment system, online results checking, database creation of all students etc.

I started to leave large, spending profit without any plan of diversication and expansion. After every month, I called friends, went to bars and close to down. In the word of Nigerians "I was leaving Large".

Around August 2013, MTN began to up grade Their system and gradually, profit began to strong down.

It was a sure sign that this was the time to cash out, instead I spent money consulting programmers in Indonesia, India and one Igbo guy(Nnamdi, he was gold) and still to no avail, and by the start of September, profit reduce to the extent that all that was left were customers that paid in advance, who complained bitterly.

And soon, we closed down.

My partner wasn't that affected because he saved all his profit, in the space of 11monthz, he had over N700, 000 to show for his investment, but me? NOTHING.

We closed down all Operations December 2013, and tha5 was about the period I got admission and entered Univsersity.

What I learnt from this experience?

1. Financial Intelligence is a must

After managing and failing in my business, I discovered that the main reason that accounted for my failure was the lack of financial intelligence. I kept spending and spending without thinking ahead of the days to come. Trust me, tommorow doesn't take care of itself in Nigeria.

2. Uncontrollable Variables should not be the basis of your bussines

Despite the fact the proper planning would have made me leave with something, the fact that my business would built around MTN technical issues made its survival difficult since I can control that.

3. Always Diversify

To increase your chance of success, learn to invest in other ventures. Even as a worker, it's good to have other places you make money from because, even the job can go away all of a sudden.

Another thing that came in play was the Teenage factor cuz I was young when I tried this venture, I don't need to explain this factor as we all have been there.

I can go on and on about what I learnt but I chose to stop here.

Source - Optimusmind

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