A business development advocate, L.O, has advised small and medium-scale enterprise (SME) owners to begin their ventures using internal funds rather than relying on loans. Speaking in a podcast session titled “Growing Your Business Series,” she explained that early-stage debt can place pressure on new businesses and affect long-term stability.
“There’s always this mindset with most Nigerian businesses who always want to access funds and loans from bank to start-up business,” she said. According to her, this approach can lead to financial strain, especially when repayment begins before the business has built steady income.
L.O noted that starting with personal savings allows founders to build at a pace they can manage. She urged aspiring entrepreneurs to plan ahead and develop the habit of setting money aside over time. “You don’t want to start a business with so much debt,” she added, pointing to the burden of monthly repayments.
She encouraged individuals to view employment as a step towards business ownership. By working for a period and saving income, future entrepreneurs can gather funds for their plans. “So why don’t you get a job, work for a while, work for a few years and cast the goal on a vision board?” she asked.
L.O stressed the need for a clear plan. She advised setting a timeline for launching a business, even if that timeline changes. “Make sure you have a time-line,” she said, adding that planning helps people stay focused on their goals. She explained that a timeline provides structure and direction, guiding actions over months or years.
The session also highlighted the value of starting small. Many new founders expect to begin at a high level, but L.O warned against this. She said businesses can begin as side hustles and grow over time. This approach allows entrepreneurs to test ideas, learn from experience, and build income gradually.
“People will be willing to invest in your business if they see that you also have your funds and your investments in the business,” she said. She explained that personal investment shows commitment and can attract support from others.
L.O also spoke about saving methods. She advised keeping funds in accounts that are not easily accessible to avoid spending. Options such as fixed deposits or investment portfolios can help money grow through interest. This, she said, increases the total funds available for starting a business.
In addition to personal savings, she mentioned family and friends as another source of capital. This method, she noted, often comes with less pressure than formal loans. However, she warned that trust must be maintained. Borrowers must meet agreed terms to protect relationships and personal reputation.
“The stress or the headache of paying back is always less,” she said, while urging honesty and discipline in such arrangements.
Another option discussed was equity funding. In this case, a business owner gives a share of the company to an investor in exchange for capital. L.O advised that such agreements must be clear from the start. Both parties should understand their roles, contributions, and terms for exit if the investor decides to leave.
She stressed that a business idea must be clear and workable before seeking any form of funding. Planning, saving, and gradual growth remain central to building a stable venture.
“The bottom line is have a good idea to build a good business,” she said.
L.O concluded by restating her position on external loans. She advised caution when dealing with lenders outside personal networks, noting that such arrangements can lead to long-term debt.
Her message to aspiring entrepreneurs was direct: focus on saving, plan with care, and build step by step.
