Is it time to fully embrace the idea of setting up your own business online? Starting up your own business, whether from home or full-time in a brick-and-mortar site is always a good move. Fortunes are made from businesses, if you just know how to approach it and undertake the business venture. People are jumping from corporate boardrooms to home-based businesses because they know what they want and they have the money to support their moves. And with news and stories suggesting that many home-based business owners have struck the gold, is it your time to venture as well and become an online entrepreneur?Starting your own business from home is not easy and having the idea is not the end-all and be-all solution. There are other requirements that need to be considered when you are setting up your own business. Here are five things that you should remember if you are at this juncture in your professional life.• Don’t just settle with a business idea, have a business plan. Though you are looking at a start-up business or a small home-based business with just one employee, still you will need some form of planning. Leave the official business plan to big companies and organizations. What you need to have is a simple planning session that will draw the direction of the business. On that planning stage, you need to come up with the amount of money you are willing to invest, the marketing plan and other minor details that can affect the flow of the business. Preparing a business plan should be easy, and you can even refer to online resources on the step-by-step process of preparing a business plan.• Ensure that you have the financial muscle to sustain the business. You need to come up with a plan wherein you can sustain the operations of your business even if the sales are running low or inquiries have stopped for a while. With this being said, it is not recommended that you immediately resign your day job. If you are dipping your fingers into freelancing and online business, make sure that you have the money in bank that can at least sustain the business for the next six months or so to pay for the bills. Take it one step at a time, and you can resign your post if the business is already established.• If you are planning to become an online entrepreneur, its best if you can find someone who can lead you and inspire you. Perhaps a mentor can help your cause and boost your foray in online business. It doesn’t mean that you need a real ‘person’ that can guide you every day. You can even count on industry websites and trade organizations for help and guidance. This will also help you network with other people who are also planning to own business from home.• Work on the business to make it competitive. Right now a number of tools and websites that can be used to help the business. Social media can be used to advance the interest of the business and to get in touch with potential customers. It is also best to conduct a market study so that you will know the advantages of your products and services over the competition. Even if you think that your product is unique, it is still best if you can work on it so that it will become more competitive.• Market your business. You can tap the different marketing tools to promote the business. Marketing your online business doesn’t mean that you will only concentrate your efforts; you can go for the traditional and offline marketing efforts as well.The first few months are the most critical for any business and you should be ready for this. Don’t get too excited when you are setting up your own business. Though you already have that eureka moment, still it is best that you are logical in all your moves when setting up the business. Count on the following suggestions as listed above if you want to be properly guided when you are just starting out as an online entrepreneur.Dany Cooper
Finding the Best Business Opportunities for Small Businesses is often thought of as being almost as difficult as the quest for the Holy Grail. While there may be a certain amount of truth in this view of things some up-front research and planning usually helps to get going with a reasonable degree of success.The best business opportunities are often derived from the simplest of profitable business ideas but unfortunately not all of them are feasible. In fact, a large number of business ideas are doomed to fail because of the lack of business skills on the part of the new business owner. In most instances there would have been a much better chance for success if the new business owner had taken the time to follow a small business course or some kind of structured setting designed to plan out precisely how a new business can and will succeed.Owning your own business can be exhilarating but at times it can also be quite difficult and downright frustrating. You can however make the choice to spend a little bit of effort and learn the ropes by following a small business course. Taking this very important first step will help to make the entire process of building a new business much easier and it will also offer a particularly critical element i.e. organizational skill.Starting from scratch and getting to the top owning your own business can be an almost insurmountable task. It is essential that you have everything planned out from a business feasibility study through to a well-ordered business plan that will be your blueprint to help you keep on track as you grow your business.Doing a small business course can also be the perfect solution for a business owner looking for more profitable business ideas to take an existing small business to the next level. Even if you have done quite well during the first stage of owning your own business, business expansion requires additional skills that are best learned up front if you want to avoid the bad mistakes that others have made. One of the most important issues is that the best business opportunities for expansion often require additional capital. Any business owner who has been in this situation and had to try to get a small business loan to support this expansion will agree that funding is almost impossible to get without a good business plan to support the application.Being successful owning your own business is really a matter of motivating yourself enough to keep a positive mindset that leaves little room for self-doubt and discouragement. Now, no one is saying that keeping a positive attitude is the secret to success but when you really sit down and think about it, you’ll soon realize that it has a lot to do with driving yourself towards your goals and staying on track.Many people unfortunately lose touch with their goals when things become too difficult but, if you learn how to plan to succeed you’ll discover that it is a strong element in motivating yourself to not give up on your business dreams. A small business course provides a great opportunity to learn plenty about self motivation, goal driving tactics and much more about the change in mindset needed to truly succeed with almost any business. Some may even go as far as to say that you would have a hard time making the most of even the best business opportunities for your particular situation without the help offered by a small business course.All in all, owning your own business will require many steps to be taken and taken correctly including designing that all too important business plan. You will without doubt be amazed when you find out that success can happen when you learn how to plan to succeed. The best business opportunities are really simple to find if you take the right approach to developing your personal business skills.
INTRODUCTIONThe Nigerian oil and gas industry is the primary source of revenue for the government and has an industry value of about $20 billion. It is Nigeria’s main source of export and foreign exchange earnings and as well a major employer of labour. A combination of the crash in crude oil price to below $50 per barrel and post-election restiveness in Nigeria’s Niger-Delta region resulted in the declaration of force majeure by many international oil companies (IOC) operating in Nigeria. The declaration of force majeure resulted in shutdown of operations, abandonment or selling of interests in oil fields and laying off of staff by foreign and indigenous oil companies. Although the above occurrences contributed to the drag in the Industry, perhaps, the major cause is the unfruitful presence of the Federal Government of Nigeria (FGN) as the dominant player in the Industry (owning about 55 to 60 percent interest in the OMLs).While, it is unfortunate that many IOC’s playing in the Industry divested their interests in oil mining leases (OMLs) and oil prospecting leases (OPLs) granted to them by the FGN; on the flip side, it is a positive development that indigenous companies acquired the divested interests in the affected OMLs and OPLs. Hence, domestic investors and companies (Nigerians) now have the opportunity and significant role to play in the sustainable growth and development of Nigerian oil and gas industry.This paper x-rays the roles expected of Nigerians and the extent that they have successfully discharged same. It also looks at the challenges that are inhibiting the sustainable development of the industry. This paper finds that the chief factor limiting domestic investors from efficiently playing their role in the sustainable development of the industry is the overbearing presence of the FGN in the Industry and its inability to fulfil its obligations as a dominant player in the Industry.In the first part, this paper discusses the roles of domestic investors, and in the second part, this paper reviews the challenges and factors that inhibit domestic investors in sustainably performing the identified roles.THE ROLE OF DOMESTIC INVESTORS/COMPANIESThe roles domestic investors play in promoting sustainable development in the oil and gas industry include:
Enhancing Personnel and Technical Capacity Development
Promoting Technological Capacity and Transfer
Supporting Research and Development
Providing Risk Insurance
Capital Injection/ProvisionOil and gas projects and services are capital intensive. Hence, financial capacity is essential to drive growth in the industry. Given the increased participation of domestic investors in Nigeria’s oil and gas industry, naturally, they have been saddled with the responsibility to provide the capital required to drive industry growth.As at 2012, Nigerians had acquired from IOC’s about 80 of the OMLs/OPLs (30 percent of the licences) and about 30 of the oil marginal fields awarded in the Industry. Dangote Group is currently undertaking a $14 billion refinery project, partly sponsored by a consortium of Nigerian banks. Another Nigeria company, Eko Petrochem & Refining Company Limited, is also undertaking a $250 million modular refinery project. In the midstream sector of the industry, there are many indegenous owned transport vessels and storage facilities; and in the downstream sector, domestic investors are actively involved in the marketing and sale of refined crude oil and its by-products through the filling stations located across Nigeria, which filling stations are mostly owned and funded by Nigerians.Capital is also required to fund education and training of Nigerians in the various sectors of the Industry. Education and training are vital in filling the gaps in the country’s domestic technological and technical know-how. Thankfully, Nigeria now has institutions solely for oil and gas industry related studies. Furthermore, indigenous oil and gas companies, in partnership with IOC’s, now undertake pieces of training for Nigerians in different areas of the industry.However, funding from the domestic investors is not adequate when compared to the financial needs of the Industry. This inadequacy is not a function of financial incapacity of domestic investors, but due to the overbearing presence of the FGN through the Nigerian National Petroleum Corporation (NNPC) as a player in the industry; in addition to regulatory bottlenecks such as pump price regulations that inhibit the injection of capital in the downstream sector.Personnel and Technical Capacity ImprovementOil and gas projects are often highly technical and complex. As a result, there is a high demand for technically skilled professionals. To sustain the growth of the industry, domestic investors have to fill the capacity gap through training, hands-on experience in the execution of industry projects, management or operation of already existing facilities and obtaining the necessary international certifications such as ISO certification 2015 and American Society of Mechanical Engineers (ASME) certification. There are currently domestic companies that undertake projects such as exploration and production of crude oil, engineering procurement construction, drilling, fabrication, installations, oil by-products shipping and logistics, offshore fabrication-vessel building and repair, welding and craft sales and marketing. Recently, Nigerians participated in the in-country fabrication of six modules of the Total Egina Floating Production Storage Offloading (PSO) vessel and integration of the modules on the FPSO at the SHI-MCI yard.Technological Capacity and TransferTechnological capacity in the oil and gas industry is primarily related to managerial competence in project management and compliance, the assurance of international quality standards in project execution and operational maintenance. Hence to build technological competency starts with in-country development of management capacities to grow the pool of skilled personnel. A particular research found that there is a vast knowledge gap between domestic companies and IOC’s. And ‘that indigenous oil companies suffered from fundamental lack of quality management, limited compliance with international quality standards, and poor preventive and operational maintenance attitudes, which lead to poor maintenance of oil facilities.’To effectively play their role in enhancing the technological capacity in the Industry, domestic companies started partnering with IOC’s in project construction and execution and operational maintenance. For instance, as mentioned earlier, domestic companies partnered with an IOC in the successful completion of in-country fabrication of six modules of the Total Egina Floating Production Storage Offloading (FPSO) vessel and integration of the modules on the FPSO at the SHI-MCI yard. Other instances include: the first assembled-in-Nigeria Subsea Horizontal Xmas Tree and the fabrication; installation of subsea equipment like flexible flowlines, umbilicals and jumpers on Agbami Phase 3 project; Installation of 32km 24″ Sonam to Okan NWP pipeline; the fabrication and load-out of the Okan PRP Topsides; Bridge Fabrication of Okan PRP jacket, amongst others.It is common knowledge that since the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in 2010, all projects executed across the sectors of the Industry have had the active involvement of Nigerians. The Act ensured an increase in technological and technical capacities, but also a gradual process of technology transfer from the IOC’s to Nigerians. The Act in its Schedule reserved specific Industry services to domestic companies. The rate of involvement and the quality of services of Nigerians has increased tremendously with the result that there are now many domestic oil servicing firms.Research and DevelopmentThe building of technological capacity and the ability to generate innovations that will drive an industry forward are hinged on research and development (R&D).Domestic investors are yet to pay attention to R&D. Nonetheless, the Nigerian Content Monitoring Board (NCDMB) has indicated its intentions to set up R&D for the oil and gas industry covering engineering studies, geological and physical studies, domestic material substitution and technology adaptation. It is hoped that domestic investors will pick up the slack in their support for R&D in the Industry.Risk InsuranceThe risks in the Industry are vast and substantial, especially in respect of capital assets. It is possible to reinsure pipelines and facilities against sabotage, depreciation, drying up of an oil well or such hazards that disrupt the operation of an offshore or onshore facility, including transportation.Initially, Nigerian insurance companies were not able to underwrite huge risks in the Industry. However, since the release of Insurance Guidelines for the oil and gas industry in 2010, Nigeria underwriters have been recapitalised. Each of the underwriters now has a minimum capital base of between N3 billion, N5billion and N10billion. The underwriters have taken steps to increase their technical capacity through training and retraining, to acquire the needed technical expertise to assess risks accurately and also to avoid the incidence of an underwriter exposing itself to risks that are beyond its capacity.Interlude: The drag in the oil and gas industry and the playersRegardless of the foregoing points that illustrate the efforts made by domestic investors in the Industry, there are still substantial limitations to the growth of the Industry, especially with reference to the upstream sector which is the soul of the Industry. The major reason is that domestic investors/companies are a fraction of the Industry players, particularly the upstream sector where they control about 30 percent of the OMLs/OPLs. Therefore, regardless of how well the domestic investors play their role in the sustainable development of the Industry, their efforts will still be undermined by the actions/inactions of the other players. The other players are the IOC’s and the NNPC/FGN, with the NNPC/FGN holding majority interests in upstream sector: noting that activities in the downstream sector are specifically reserved for Nigerians under the Schedule to the NOGICD Act, while the indigenous investors and companies have a fair share of participation in the midstream sector which is contractually regulated.The FGN operates in the Industry through the NNPC. The NNPC carries out its operations in the Industry through business relationships with its partners using any of the following three arrangements: participating joint venture (JV), production sharing contract (PSC) and service contract (SC). The most used of the three is the JV, whereby the NNPC/FGN holds majority interests, and to an extent dependent on which company is the JV partner (NNPC/FGN owns 55 percent of JVs with Shell, and 60 percent of all others).What is clear from the above is that the complementary roles of the dominant player, the NNPC/FGN, is very significant to the sustainable development of the industry, the efforts of domestic investors/companies notwithstanding. The NNPC/FGN has two main obligations of funding and policy direction for the Industry but has consistently fallen short of these roles. Therefore, the failure of the NNPC/FGN to play its role, diminishes the efforts of domestic investors.Factors inhibiting the role of domestic investors/companies in the sustainable development of the IndustryFirst, exploration activities in the Nigerian oil and gas industry are mostly operated through JV agreements between the NNPC (owning 55 or 60 percent interest as the case may be) and private companies. The JV arrangement is such that the NNPC/FGN has only funding responsibilities while the other partners have the responsibility of exploration and production of oil. Hence, the JV partners provide the technical and technological capabilities in construction, operation and maintenance of the facilities. Historically, the JV partners have kept good faith with their obligations, but the NNPC/FGN have consistently breached its obligation when called upon to remit its contribution.The NNPC/FGN have a chronic habit of either failing to pay or underpaying its JV funding obligations. It allegedly owes the JV partners about 6 years cash call arrears of $6.8 billion (negotiated to $5.1 billion in 2016) and $1.2 billion cash call debt for 2016 alone. This has resulted in waning JV oil production for some years. There are two sides to the issue of the FGN’s debt obligation to the JV partners. First is that the FGN, most of the time, does not have the financial capacity to meet its JV cash call obligations. Secondly, the bureaucratic bottlenecks involved in the approval of the FGN portion of the cash call which is funded through budgetary allocations and therefore exposed to the whims and caprices of politics and inordinate delays.Second, the JV partners usually wait for unduly long periods to obtain the consent of the FGN to execute projects from as low as $10 million, notwithstanding the urgency of project and which project may be incidental to ongoing JV operations.Third, the lack of clarity about the policy direction of the FGN is even more worrisome. The Petroleum Industry Bill (PIB) has been stalled in the National Assembly since 2008 and there does not seem to be any commitment to expedite the legislative process on the key areas of the PIB. Noting the vital nature of the industry to the health of the Nigerian economy, it is surprising that the current government is yet to indicate its policy direction in respect of the PIB and other issues bugging the Industry.RecommendationsEither of the two recommendations made below can position the Industry for sustainable development and profitability for the long-term:
FGN should transfer its interest to domestic investors/companies; or
Convert the JVs to PSCs.
Indigenous companies and investors have shown capacity and potential to shoulder the responsibilities of the Industry; it will be a good business decision for the FGN to deregulate the Industry and transfer its interest to domestic investors. This would promote corporate ethical standards and attract more investments to the Industry. More so, it would grow domestic capacity and the profitability of the Industry. With this arrangement, FGN/NNPC will focus attention on sound and timely policies for the Industry.In the alternative, the FGN/NNPC may decide to convert the JV arrangement to PSCs. Unlike the JV’s where the FGN has a funding obligation, and JV partners are required to wait for the long process of JV receipts to recover its operational cost; under the PSC, the FGN would be the sole holder of the OML while the JV partners would be converted to contractors. Hence, the contractor will obtain the necessary funding, execute the project and the cost will be recovered from oil production. The challenge with this recommendation seems to be that the contractor may not be entitled to the profit made from the sale of the crude oil.The domestic investors can only drive sustainable growth and development if they operate in a business environment bereft of the difficulties and poor business habits of the NNPC/FGN as a business player.