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Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to
- send an e-mail to info@themoneyafrica.com; or
- send a DM to any of our social media channels, or
- simply fill out this form. Don’t worry, your responses are kept anonymous.
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Question
My dad has a lot of debt to pay (about N1 million). He also has shop rent to pay and other expenses that include school fees. He doesn’t have stock in his shop, so paying off the debts is hard. Also, apart from the house we live in, he has two uncompleted buildings that have been roofed and an old car with the high cost of maintenance. What should my dad do?
Answer
We understand that dealing with a lot of debt can be really tough. It’s important for your dad to take some steps to improve his financial situation. Here are a few suggestions:
First, it would be helpful for your dad to create a budget. This means making a list of all the money coming in and going out each month. It’ll give him a better understanding of where his money is going and help him figure out areas where he can cut back on expenses.
Next, it’s crucial to prioritise debt repayment. Your dad should focus on paying off the debts that have the highest interest rates or the ones that are most urgent. It might be worth talking to his creditors to see if he can negotiate lower interest rates or come up with a more manageable payment plan.
Finding ways to increase his income could also make a big difference. Your dad might consider taking on a part-time job, starting a small side business, or offering services that he’s skilled in. The extra money he earns can be put towards paying off his debts faster.
In terms of assets, since your dad doesn’t have any stock in his shop, it might be worth considering selling or renting out the uncompleted buildings. This can generate some additional income that can be used towards his debt repayment. It’s important to weigh the financial benefits against any emotional attachment or long-term plans he might have for those buildings.
To help reduce expenses, your dad should look for areas where he can cut back on costs. This might involve reducing non-essential spending, renegotiating contracts or subscriptions, or finding more cost-effective alternatives for necessary expenses.
Lastly, when it comes to his car, it’s worth evaluating whether the old car is worth keeping, considering its high maintenance costs. Selling it and purchasing a more affordable and reliable vehicle could help reduce his recurring expenses.
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Question
I’m a student at the University of Ibadan. I’m looking forward to starting a thrift business in my school. I have written down my plans and how I want to run the business but I don’t have the capital to start. I have tried everything I could but nothing is forthcoming. I’ve had this business idea for over a year now and I haven’t been able to get the funds to start it. I really want to start this business.
What do you think I can do?
Answer
I completely understand how frustrating it can be when you have a fantastic business idea but struggle to secure the necessary capital to get started. It can make you question whether your dream is worth pursuing. But let me assure you, many successful entrepreneurs have faced similar challenges and persevered. So, let’s explore some options together!
First, starting small might be a viable approach. Instead of waiting for a large amount of capital, consider launching your thrift business on a smaller scale. Begin with whatever funds you have available, no matter how modest it may seem. As you generate profits and gain traction, you can gradually expand your operations.
You can also leverage your personal savings and seek financial support from family and friends. Another avenue to explore is partnerships or collaborations. Is there someone who shares your vision or possesses complementary skills? By joining forces, you can pool resources, share the financial burden, and benefit from each other’s expertise.
Leveraging social media for your thrift business is a powerful strategy to boost visibility, engagement, and sales. With billions of active users, platforms like TikTok, Instagram, and Twitter offer a cost-effective way to reach a wider audience, showcase your thrifted items, and interact directly with potential customers. Through compelling content and promotions, you can build a loyal online community and foster a sense of authenticity, ultimately driving more traffic to your thrift business and increasing revenue.
In the meantime, consider exploring part-time work or freelancing to generate some income that you can set aside for your business. It may require some juggling, but it can help you accumulate funds while gaining valuable skills and experience.
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