Unlock Your Entrepreneurial Potential: The Essential Steps to Starting a POS Business

Hello and welcome to the show. I'm taking today's recording from the Mechanic and yes, I'm back. So expect to hear the usual interruptions in the background. Now this is your first time of listening to the podcast. The goal of the podcast is free business education. This is not the podcast where I razz mechanics about how bad they are. So don't worry, we're here for free business education. So by the time we're done, feel free to share, promote and talk about the show so that your friends and family members in Nigeria and abroad can benefit from the questions that we tackle.

They can do that by subscribing on Spotify, YouTube or Apple, any player of their choice. And if you, dear listener, have any questions that are sales and marketing related, then please bring them to me. You can call, you can SMS or WhatsApp on 08064662140. Today on the show, I want us to look at how to start Apos business. And no, this is not the kind of thing I would normally talk about on the podcast. It's just that I also have a radio show on Radio Maria 91.3

FM in Abuja. And so once in a while I get interesting questions and I figure if I tackle them over the air, I might as well tackle them over here as well. And just in case there are people who are interested, and for those of you who are still wondering why am I at the mechanic? Because like last episode, I was at the mechanic, you know, that's because the last time I was here, it was AC that was a problem. They fixed the AC and in doing that, they threw the fan belt out of alignment.

And because the fan belt was out of alignment, you know, the things are different and shy. I'm I'm back here. So what can I do? That's how it happens. You go to fix one thing, it knocks off something else and then you're back again. If nothing else, it helps you appreciate how helps you appreciate business growth. Let me put it that way. Because just like the mechanic works on one thing and throws off something else, business is also a system.

So for business growth, there are times when we're going to try and tweak one particular thing and we might end up throwing something off. And so just like these things happen with car systems, it also happen with business systems or with human systems, you know, health systems, you go to the doctor if you want thing maybe end up knocking something else. Basha, I guess what I'm trying to say is everything is a system at the end of the day.

So yeah, there's trade-offs when you're trying to walk around certain things. So let's go straight into the question about how to start Apos business. Now, First off, let me define what the POS business is. And of course, POS, the initials just stands for point of sale. And that's because when we're dealing with any business person, I mean most of us in Nigeria now anyway, we eventually get to that point where, you know, it's time to pay.

You bring out your card and then you have to swipe it. Well, for those of you in the UK and America, you guys swipe OK, No, in UKUI, think in UKU tap. I think in America you still swipe and I can't remember. Sure. I mean, I mean, last time I was in the UK, my sister-in-law, I mean, to me it looked like magic. She just whipped out the card and then she just hovered over contactless payments, you know, as in pretty impressive.

Although I hope we don't do that in hijack because I think 4 Niners, we just like they will make a killing if you can pay by doing contactless payments. You just take your card and just hover over the machine and then the thing just deducts like that. I mean, that's, that's crazy. That's mad. I mean, so that particular machine, whether it is the contactless, contactless one that you guys use in the UK where you just hover over the machine and then the thing deducts the money or the one that you use in America when you swipe or the one that you use in in Nigeria where you insert and then you put your PIN.

So whatever it is, that thing is called the POS, the point of sale, the point of sale terminal. So in Nigeria, it has become a booming business where you can have a single vendor sit outside under an umbrella, under a kiosk, you know, in a shop or in, you know, wherever because we need people like this to facilitate cash withdrawals, you know, so you can withdraw cash because the ATMs in the country are not enough. Supposedly, we have about 40,000

ATMs to serve the whole country of Nigeria and that's not enough. And then the POS business people, the POS people that we're talking about, we currently have about 2 million registered operators and that still doesn't seem to be enough. So it looks as if we still need even more people like this. So this is where the everyday person can withdraw and deposit cash without having to go into a bank. There was a time when you could do bill payments with them, you know, Internet, NEPA, blah,

blah, blah, things like that. What else? OK, fund transfer already touched that. And early on when this POS thing started, you could do account opening because I remember seeing some of those kiosks in some places, you know, where would say Access Bank something, something, come on, open your account here. You know, I never tried it, but I do think it's a good idea, at least for people that are, what's the word, you know, in Nigeria when we say people are on banks, you know, certain people in certain economic classes, you know, they don't trust banks.

They don't put their money in banks. So all these sorts of initiatives should make it easier for people to become part of the formal banking sector, you know, to put money in the banks. So it's actually that's what the POS is. And so I had two people call in not too long after each other to find out how do you start Apos business. Those Chitima in Abuja who called in, she's a hair stylist. And then there's Steven from era 11 who called in.

I can't remember what he does and I need to know how to do a time to the POS business. So I figured no, no problem, I got you. Let me do some research and I'll get back to you guys. So this is the result of my research. Well, First off, you need start up capital. And of course, startup capital just means the money that you have to set aside before you start a business because you definitely need some small coins to buy one or two things before you start a business.

So back in my wedding photography days, startup capital was needed. You'd have to buy your camera, you buy flash, you buy batteries, you buy the bag because back then we used to carry all our equipment in in bags. That was before they invented these. What's it called? Holsters before they invented the holsters that you put your, your put your cameras on so you get the bags, you get what else? Maybe you pay for studio space.

What should I get the point? But The thing is, before you start business, you reserve some small coins so you can buy one or two things. So you want to need some startup capital if you're going to start Apos business because you're going to have to buy the machine, you know, the terminal where people can insert and pay or swipe and pay or contactless an MP. Although I am definitely not going to do the contactless thing whenever they roll out in Nigeria, I'll wait first.

I'll give it like maybe 5-10 years, you know, until they sort out all the security issues before I start doing contactless payment in Nigeria. Then what else? OK, you buy the machine. Then you also have to get shop space or buy an umbrella or buy a kiosk. And then you have to do some basic kind of marketing so that people know who you are and what it is that you do. Then of course, you also need float. Now float is a certain sum of money that people in the financial space have to hold so that they can service their customers.

Because somebody like me, excuse me, I'm in consulting now. I don't need to hold float. I don't need to hold money because if you call me, I'm trying to solve business problems. If I'm trying to collect cash from you, so I'm not handing cash out, I don't need float. As a wedding photographer, I didn't need float. But then if you're a banker, you guys to hold some cash because some people come and say, give me physical cash, I need to have cash to give them.

So it's the same thing with pure as people. Some people are going to come and say, I want to withdraw 500K and you know, you're better have 500K on you to finance the transaction. So that's what float is. So because of all these things that are involved and excuse me, since you know, depending on where you are, your float doesn't have to be too much. There are different sources. Some people say you can start the POS business with 50K

startup capital, although I think that's too small, sha, because there's some people who say the machine costs like 15 K. So I mean, if you buy the machine 15K, are you going to say that your float will now be 35 Ki? Mean that's too small. But anyway, SHA, I'm just letting you guys know what I found out. So you can start supposedly with 50K to 250K and that should be enough to buy the machine. That should be enough to buy, to get you shop space, umbrella kiosk or whatever.

And then to do some basic marketing, you know, you just print out something and put on a blank, you know, to say POS here, that kind of thing. Then and then also the float. Well, like I said, machine costs, some people say 15, some people say 40K. But I noticed that GTB, at least in Abuja anyway, GTB has been advertising the the POS terminals, very nice orange looking things. And I think they're advertising some, is it 0% fees or 0%

Commission or something and I can't remember. So if you're curious and you want to start a POS business, maybe you can go and check out GTB and see what they have to offer. Now some of you might be asking why am I talking about GGTB? That's guarantee Trust Bank. When we're talking about POS and you're going to find out now that is because before you start this business, you're going to have to register with the CAC now as the Corporate Affairs Commission, the people who register all businesses in Nigeria and all charities.

Then you'll also have to partner with an aggregator. And an aggregator is a financial institution like a CBN registered bank. CBN is the create, I'm sorry, I say Christian, the central bank here, Central Bank of Nigeria, sorry, forgive me because CBN also is Christian Broadcasting Network. They're also here in Abuja. So you have to register with the CBN, the Central Bank of Nigeria and so financial institutions register with the CBN like banks and then payment processors, So GCB, Access Bank, Sterling Bank,

IBTC, all of them registered on the CBN. Then payment processors like Money Points, OPA, you know, all these other people also have to be registered by CBN. So to now be in this POS business, you have to partner with one of these big boys or big girls and they're called aggregators. So that's the reason why GTB has not entered the equation because if that's your Bank of choice, then that is going to be the aggregator that you're going to be going through.

So register with CAC, partner with one of these aggregators. And this is from these aggregators that you will now be able to obtain your CBN license. Because in this country, in Nigeria, it is illegal to be doing some kind money transactions, you know, money lending, blah, blah, blah, things like that without registering with the Central Bank of Nigeria. So just one of these things. So you know, be ready to change. Who else be ready to change POS

money lender. You know, all of you people, you guys need to be registered with the Central Bank of Nigeria. So both of POS people, you'll be going through the aggregator to get your license. Then let's see what else. OK, I've already mentioned that the machine is like 15K to 40K. Now how much floats do you need to have? There's some people that say 50K float is OK. I think 50K float is unrealistic. But anyway, it depends on your community.

If you're in the kind of place where people are withdrawing to 2K55 Ki, guess 50K float is OK. Some people say minimum of 300 K, even a 300 Ki think it's too small because I mean, I mean at least in Abuja now, anybody who comes to my mutual wants to withdraw like 20 K, you know, on the spot. So by the time 20 people come to you, you know, 20, I'll be 20 people are 20 K. Is that like 400 grand or something? And then you cash my point share.

I think that 300K is low, while they say, yeah, you can start with 50 to 300 K float. So the part that I like the most now, which is marketing, are you going to let people know that you exist? Are the services that you provide because it is the most pivotal part of being in business. I keep mentioning it again and again. If you cannot do sales, if you cannot do marketing, then you know, why are you wasting your time? Because it might be a good idea,

like in this case, it's a good idea. There might be room for some demand because we have 200, sorry, that we have 2 million POS operators in Nigeria. And some people say it's still not enough to service the market. So maybe there's room for more. But The thing is, if you lack your marketing game, then quite frankly, you're going to suck and you're going to die in the business. So part of the marketing plan that I advocated for on the air was I said that Chidima does the hair stylist and Steven from Area 11 that they should pay attention to foot traffic.

Maybe you should be looking at residential areas also. A foot traffic just means plenty of people to walk out past. You know, people are walking from here to there or people are taking a cutter from here to there, or people are driving past from here to there because it's from the food traffic that people will see you and be like, oh, OK, POS, they're here so that next time they need money, they'll come and meet you and say, oh, how far do you have?

Two, 100K, how much is your charge? You know, blah, blah, blah. So residential areas, if you can, to take advantage of food traffic, residential areas where people live, then you can partner with small businesses because there are people who stay outside some shops, you know, shopping malls, barbing salons, you know, these kinds of places. So that whenever there's a problem with payments, you know, the people in the shop can just say, well, go outside.

Well, I'm equally over there. He's our trusted POS provider. And then you can run sort of payment that way. So some people partner with local businesses. Then of course, you have to make sure that you have clear branding, make sure they have professional signage. So far, people in the POS space in Nigeria, they don't seem to worry too much about these sorts of things. They'll just put up a plank and then say POS here, you know,

that kind of thing. And then they're good to go. But shall I just try and make it look, try and make it look nice. Don't write it with pencil and paper because you know, this Niger as in we put a lot of what's the word? We put a lot of faith in these sorts of things. So you might be a Better Business person, but because you wrote your own POS here in pencil and crayons and the other person printed his own at the Cyber Cafe, and maybe the person after that decided to go to to a proper printer to get this thing printed out.

You know, people will look at that last guy as OK, this last guy is more professional than the rest of you too. So make sure that your branding, your printing, your signage, your whatever it is, make sure it's, it's clear, make sure it's on point. Just design something that looks decent. Then one thing that I suggested was to display pricing. You know, that is something that POS people so far are not doing. But in the financial sector, it is something that some people used to set themselves apart just by doing display pricing because what do they call it?

They call it transparent pricing. So transparent pricing policies sometimes give customers some confidence. So they roll up to your place and then they see everything is printed that if you're withdrawing 5K, this is the charge, 10K, this is the charge, 20K, this is the charge. You know, just makes you feel as if you're not just arbitrarily calling numbers out. And you know, that's a problem now, at least in Abuja anyway,

because I've noticed that in different parts of the city, different rates apply. And you know, there's no transparency in the prices. So I can go to some parts of Abuja and to withdraw 20K my, my fee is 500 bucks. And then in some places to withdraw 20K, my fee is 200 bucks. And in some places it's 300 bucks. So it just seems to be anyhow, So transparent pricing policies, maybe it might be something that you can use if you want to get involved in the POS business.

Maybe my help set you apart. And who knows, maybe people might like coming to your place precisely because they know that whenever they get there, they know exactly the price that they're going to get. So that is something you can use to set yourself apart. Then if I know anyone who's starting a POS business, if I feel starting a POS business, please reach out to me because I think there's some ideas that we can try out concerning concerning SMS and WhatsApp marketing.

So that's something that we can, we can, we can look at. So if you're about to get into this business, please let me know what's up. I would love to, yeah, share some ideas with you. Just run some experiments, you know, see if see if it works. So that's it pretty much. If I have any more ideas concerning the POS thing, I will come back here and make another episode. But just like I let people know on the radio, I'm letting you guys know here right now on the podcast.

I beg verify any single info that you hear from me. Don't take what I say as gospel truth when it comes to sales, sales principles, sales frameworks. Yeah, you can trust me. Whatever I say, ticket is as good as gold. When I go outside, I'm going to do small research and come back here and tell you guys what I found. I beg verify the information by yourself before you place reliance on it. But at the very least shy, I know this for sure.

You definitely have to register with CACI know this because I used to be a lawyer. And you definitely have to register with the CBN. And I know this because I used to be a lawyer and it's looking like you have to go through aggregators. Those are financial institutions that have been registered by the CBN. If there's an alternative route, how you get started in the POS business, you know, we'll do some research. I'm sure you probably find out.

So that's it. That's how to start the POS business. Just in case you're curious and just in case you're one of those people who heard the statistics that we have 2 million POS operators in Nigeria, that the PS operators we have are still, they're not, still not enough to service the market that we have. So that is all for today folks. Remember, if you have any sales and marketing questions, then bring them to me. You can call can SMS or WhatsApp me on 08064662140.

Thank you for your time and attention. I'll catch you, dear listener, at the next episode.