SETTING UP AND FINANCING SMALL SCALE BUSINESS FOR DOCTORS

Pharm. Ahmed I. Yakasai FPSN FNAPharm

Former Commissioner of Commerce and Industry, Kano State

Managing Director/CEOPharmaplus Nigeria Ltd, Kano

Presented at the Maiden Meeting of Society of Gynaecologists and Obstetricians of Nigeria (SOGON) Northwest at AKTH, Kano

AUGUST 23,2014

INTRODUCTION

The process of starting a business involves planning, making key financial discussions and completing a series of legal activities. However, if you are thinking of starting up a business, you will first need to come up with a realistic ideas that you can turn into a product or service. Again, don’t just sit and dream about it; do something.No matter how painstakingly you might look and how painstakingly you plan it, this in itself is not enough. To succeed as an entrepreneur, you need passion. You need to believe in your project. And you need to be willing to put your heart and soul into making it work.

Entrepreneur develops a project and eat, drink and sleep it. It requires hard work, integrity and determination.

FIRST THINGS FIRST; What you need to think about:

What will the business do Where can it operate Will I need premises Do I need people to make it happen or will I be flying

solo for some time Can I fund the business myself, or do I need financial

support How long will it take to get the business into profit Have I got what it takes to make to work.

Then;1. Research! Research!! Research!!!2. Don’t be afraid to make changes and take your Idea back to the drawing board.3. Write up a business plan.4. Determine the legal structure of your business – Decide which form of ownership is best for you:

Sole Proprietorship Limited Liability CompanyPartnership

WAYS OF GETTING STARTED

There are a number of viable routes:

Start-up ventureBuying an established businessBuying into a business Management buy outOutsourcing Franchising.

MICRO, SMALL AND MEDIUM ENTERPRISE Definition of MSME in Nigeria

Most of the Small Scale Enterprises are sole proprietorships, a significant number are incorporated businesses.

Size Category Employment Assets (Excluding Land &

Building)

Micro Less than 10 People

Less than N5million

Small 10 – 49 People N5million – N50million

Medium 50 – 199 N50million – N500million

MSME are collectively, the largest employees in many low income countries, generally regarded as the engine room of economic growth and bedrock for wealth creation.

BUSINESS STRATEGIES FOR DOCTORS

Some of the best businesses for doctors include;Research Consulting Technology Other businesses.

1. Research:Working for Medical Research CompaniesResearch related to a particular disease for both private and public organisations

Clinical trials Establishing a research firm.

2. Consulting: Medical consulting may prove more rewarding than medical practice

Medical consulting is more interdisciplinary in character than medical practice.

Advisory services on healthcare Recruitment/Training Publishing of Healthcare Magazines, Books

and Newspapers. 3. Technology Doctors with technology skills can put their expertise to work to develop new medical technologies. Doctors can have a partner with computer or engineering background. For example of medical technology companies include medical software/hardware developments, medical technology sales companies and medical consulting firms.

Other businesses:

Fisheries Poultry Livestock production Bakery/Confectioneries Ice block making Importation Real Estate.

CASE STUDIES

DR. SONNY FOLORUNSHO KUKU, OFR

Dr Kuku is a world renowned Consultant Physician and Endocrinologist.  He holds several degrees and Fellowships in medicine including 2 doctorates. He has been the Joint Chief Director at the EKO Hospital (Ekocorp Plc) which he co founded in 1978.

Dr. Kuku has also been a trustee and a Distinguished Fellow of the National Postgraduate Medical College of Nigeria and President and Trustee West African College of Physicians and President of Pan African Diabetes Study Group.A past Chairman of the Committee of Pro-Chancellors of State Universities and Committee of Chairman of Federal Tertiary Hospitals, he was a recipient of the First Distinguished Alumnus Award University of Lagos in Lagos in 1991, Ambassador of Goodwill Award City of  Freetown, Honorary Fellow of the College of Physicians South Africa and Glasgow. He is a Fellow of the Nigeria Academy of Science.

Dr. Kuku was conferred with the National Honours of the Officer of the Order of the Federal Republic of Nigeria (OFR) in 2003. He was a Director of Midas Merchant Bank and is the Chairman of Midas Stockbrokers Limited, Clina-Immunoassay Lab and a Director of Ecobank Nigeria Plc and Total Health Trust Ltd. He was the Chairman of the Human Capital Policy Commission of the Nigerian Economics Summit Group.

He became the first African Master of American College of Physicians in 2005 and Honorary Life President, Nigerian Society of Endocrinology 2007.He is currently the president, King’s College Old Boys Association, Chairman Board of Management University College Hospital Ibadan, and the Board of trustes, Otunba Tunwase National Paediatric Centre, Ijebu-Ode.A highly cited individual in bibliographic in the world, including Who is Who in the World, he holds several traditional titles including the hereditary Oloriogun of Ijebu-Ode.

Professor E.A ElebuteDirector

Prof. E. A. Elebute is the co-founder and pioneer chairman of Hygeia Nigeria Limited. He is also a Consultant Cardiothoracic Surgeon. He holds the following qualifications: MA, MD (Trinity College Dublin),  FRCS (Edin), FWACS, FMCS (Nig).

Professor Elebute has been involved in the Nigerian healthcare industry for 50 years and was previously the Provost of the College of Medicine of University of Lagos and the Chief Medical Director of the Lagos University Teaching Hospital.He served on the Board of Evans Medical Plc (formerly Glaxo Nigeria Limited) for more than 25 years; and as Chairman of Glaxo Wellcome Nigeria Ltd. He has been awarded the CON (Commander of the Order of the Niger) by the Federal Government of Nigeria.

FLYING DOCTORS – Dr Ola OrekunrinA Nigerian health care entrepreneur

Provides, urgent helicopter, airplane ambulance and evacuation services in Nigeria and other countries across West Africa.

Pharm. Ahmed I. Yakasai

in South Africa

FINANCING OPTIONS OF SMEs IN NIGERIA

Small businesses use several sources available for start-up capital:

Self financing by the owner through cash, equity loan on his or her home and or other assets

Loans from friends or relatives Grants from private foundationsPersonal savings – save one-tenth of everything you earn.

Private stock issueForming partnershipsFundraising BanksSME finance - Nigerian Bank for Commerce & Industry (NBCI)- National Economic Reconstruction Fund (NERFUND)- Small and Medium Enterprise Credit Guarantee Scheme (SMECGS)

- Small and Medium Enterprises Equity and Investment Scheme (SMEEIS)

- Nigerian Export – Exim Bank (NEXIM)- Bank of Industry (BoI)- Agricultural Credit Guarantee

Scheme Fund (ACGSF)- Microfinance Banks - Commercial Banks- Micro, Small and Medium Enterprises

Development Fund Launched on the 19th of August 2014

- Fidelity Private Medical Support Scheme

It is a product for private medical doctors that offers facilities to purchase drugs and hospital equipment (N3million).

Financing SMEs by International Development Agencies:- International Finance Corporation IFC (A member of the World Bank Group)- CDC – UK’s Development Finance Institution (DFID) www.cdcgroup.com

- Organisation for Economic Corporation and Development (OECD)

- EB – 5 Investor Green Card in United States of America ($5million - $1million)

- African Development Bank (AFDB)- African Guarantee Bank Fund (AFDB)

- Exim Bank (USA).

CONCLUSION

If spending money brings you enjoyment you will never be rich, but if making money bring enjoyment, then your wealth is guaranteed.

Let me end my short presentation by illustrating the following scenario:Imagine two men, Alhaji Nour and Dr. Yakasai

1. Dr. Yakasai – Is a medical doctor – earns N3million per annum

– He has to show up to work regularly, using the rare skills he has acquired through a very expensive medical school education and years of on-the-job training

– If he dies or goes into coma, his family will receive little or no income because he is unable to work.

2. Alhaji Nour, on the other hand, owns a N10million limited service hotel that generates N3million per annum for him.

– He pays a management consulting company to set rates, staff the hotel and maintain standards. He doesn’t have to run it.

– if he dies or is incapacitated, his property will continue to mint money, drowning the family in cash.

3. In essence, Dr Ibrahim needs to take his earnings from practicing medicine and build a collection of cash generating assets that could work alongside him, pumping out money as he focuses on healing people at the hospital. Lastly, I have a formula for your dissection which will be helpful in becoming wealthy.

i. Wrong formula:Income minus Expenses = Savings

ii. Right formula:Income minus Investment = Expenses

THANK YOU AND BE WEALTHY