Nigerian business owner, Basil Okpara may have at a time recorded failure in his businesses but didn’t fail to learn from his mistakes.
The founder of Bazz Group Limited has taken to Twitter to share how he lost about $100,000 and the avoidable mistakes he made in the course of doing business.
Hello friends, I am excited to share my first experience of importation and running a business in Nigeria, my mistakes that cost me over $100,000 and lessons learned.
I hope someone learns from some of my mistakes.
— Bazz™️ 🇳🇬🇪🇸 (@basilokpara) January 5, 2019
In April 2008, Okpara registered his first company Bazz Global Concept Ltd, and at the same time got his first product, Bazz Tomatoes registered with National Agency for Food and Drug Administration and Control (NAFDAC) and also secured his trademark. The product was produced in the Southern city of Italy called Salerno. NAFDAC remarked that the product was one of the best.
Eventually, Okpara secured an office, warehouse, vehicles for distribution, staff and distributors in Lagos mainly in Trade Fair and Ebutte Ero markets.
Mistakes and lessons learnt
The business tycoon may have gotten the harsh consequence of unethical means of recruiting people, as he warned in his Twitter series that employers of labour should not engage anyone because of a family tide.
Okpara warned that it’s very important in recruiting staff to make sure you recruit entrepreneurs who are committed to achieving the set goals and objectives, adding that employers should not employ staff who are only interested in getting their salaries.
According to Okpara, the first mistake he made while floating his business was entrusting a brother who was not committed to the success of the business. “You can love and care for your people from afar but focus on those who are not just competent but passionately committed to the success of your vision.” He stressed.
Having successfully started the business, Okapra and his company embarked on a round of radio adverts and jingles which at the time, according to the Bazz Group boss, was not necessary. He said, “It was a waste of resources. In doing business, ensure that you are frugal with your money and only invest in things that will increase your sales and profits.”
As if the reality was yet to be dawn on him, Okpara rented an office space which he now realised was not needed at the time. Okpara advised business owners to explore avenues where they can achieve sales and profits without unnecessary expenses.
While Okpara was yet to consolidate his Tomatoes business, he went ahead to venture into matches. So he floated Bazz Safety Matches, which he said recorded a huge success in the market. Okpara regretted that he couldn’t consolidate the Tomatoes business before expanding to other products, saying the move only made out budget and funds tight.
More so, Okpara didn’t fail to perish the mindset he had then. He was running the business with the mindset that owing banks was bad, a mindset he has distanced himself from. He recalled how he declined a credit facility of N100 million with a 20 per cent interest per annum from Skye Bank.
He said, “we developed a working relationship, I would visit the manager whenever I needed to do some transactions and she would come to my office at times especially when I’m upset with them. She would come running to pacify me together with my account officer/relationship manager.”
While making emphasis on the need to always engage personal lawyers in business dealings, Okpara reiterated how he decided to raise a Letter of Credit(L/C) for his manufacturers in Italy.
Before then, Okpara had a meeting with a bank manager and there was a verbal agreement that the bank would pay the custom duty while he focuses on the shipping company.
“We agreed on this before I authorized the Letter of Credit for 5 containers worth $100,000. The huge mistake was that I didn’t get them to write this down. I believed her and we proceeded. Everything was done and funds moved to the company. Bank received shipping documents but refused to pay the duty as agreed. This was where the problem started.
“Never take verbal agreements, they can be denied at any time. Every effort and proposals made to ensure the goods were cleared were not successful. We didn’t have enough cash to sort out the duties and shipping costs plus demurrages which were increasing rapidly.
“Another mistake was that we did not separate the containers, we had all 5 containers issued a single Bill of Lading so you can clear them one by one. Always ensure you have enough cash to sort out all charges and if you are doing multiple containers, issue single bill of ladings.
“In the process of trying to raise enough cash to clear the goods, the customs gazetted the containers and auctioned them,” Okpara stressed.
About Bazz Group
Bazz Group is a Nigerian import/export company. The firm manufactures and distributes goods like Bazz Tomatoes, Bazz Safety matches and Grandeur red wines in the Nigerian market.