ARC

There are over 40 million MSMEs in Nigeria and most fundamental problem that they all face is the business infrastructure deficit problem. Business infrastructure problem are foundational problem that affects how businesses access capital, find and manage customers, provide benefits for its internal capacity building stakeholders etc. If a business can source capital, find and manage clients, and satisfy its employees, suppliers etc. it will stand a better chance at surviving any external factors that will disrupt its operations. However, for many SMEs in Nigeria, the infrastructure to meet these requirements are not easily available, especially for SMEs. Part of this problem is that service based SMEs are only equipped with the competency of service delivery and not the business infrastructure skill e.g., accounting to run a business. This leaves a business competency gap where a service provider cannot provide proper administrative support for their own business. It is typically that a service contractor may not have contracts to safeguard their business or a record book that will be useful for business loan applications.

ARC intends to build a business infrastructure solution to help service based MSMEs focus on their service delivery while we drive their business foundations through:

1. ARC v.1 is designed to provide a tool where every business engagement is recorded to build a financial profile, issue contracts and invoices to customers and vendors, and offer financial benefits (pension, tax filing, and insurance) to self and employees.

2. ARC v.2 would come with a service provider display page/recommendation where clients can get recommendations for professionals for services. For invoice financing feature, we are working with reputable organizations to onboard their vendors to access short term capital to finance approved procurement and service invoices.

3. We have built Circle which is a community for service based MSMEs across various sectors with mentors and members count over 100 across various professions since launch in December 2022. Circle holds weekly sessions on portfolio reviews, problem-solving and personal and general office hours for the people behind MSMEs to improve their technical capacity, introducing them to financial education and digitalization concepts.

The entire aim of this is to show MSME owners in that we intend to be a partner in their growth and offer them products and assistance to actually grow and survive. For example, we had a session where a fashion design mentor connected with a fashion designer to improve her Instagram page to drive more traction to her business.

ARC serves service based MSMEs who are usually more skill proficiency focused than business infrastructure focused. This means an independent worker would likely have the required skill level to attract clients, but may not all the business infrastructure capacity that well managed firms have. A typical firm would have a legal, accounting, HR, procurement departments etc., where every member contributes to the growth and survival of business operations. However, most SMEs do not have such capacity to dedicate limited resources (skill, manpower and capital) to such activities. ARC is a software that allows them to focus on their core service delivery, while we digitize the foundational operations that would impact their capacity to thrive.   

Access to capital and financial sustenance: To access capital and financial sustainability for the people behind service based MSMEs, loans and financial protection products are the most accessible short term solutions. I have worked as a vendor for a corporation and despite being able to compete for contracts, financing contracts for MSMEs after approval are very difficult. We would introduce a profit-sharing formula with vendors who have their invoices approved by reputable and verified organizations with a backoffice channel for verification.

We also provide a safety net product where businesses can subscribe to pension and insurance products for their internal stakeholders that protects them and the business itself (e.g. the professional indemnity insurance we provide)

Access to customers: ARC allows customers to display their services via a portfolio page and facilitate a recommendation introduction to potential customers. This process is sealed up with the ARC contract template and invoice to seal the transaction.

A service based MSMEs now only need to be very service proficient to commence operations with ARC as their business infrastructure provider.

I have run a service-based marketplace SME previously, and that experience showed me the issues faced by the individuals behind the business. We had projects that we could not accept because of funding problems even though we had the skill set to deliver those projects, which other competitors with deeper pockets were awarded. We had individual financial administration issues faced by the contractors within the marketplace.

I have worked in a benefits company where I understood the mechanics of pension and insurance, and how it provides a long-term safety net and financial protection that individuals may not see as important in the present.

I currently lead product management and design for ARC and Dodge systems. Building a community of service providers has also entrenched me into the target audience sphere of influence to understand their needs and the ability to build products that solves those needs.

Since December 2022, ARC Finance community program (Circle) has continued to serve over 100 creatives and professionals across 10+ sessions conducted weekly to get them started or better in their chosen craft. We organize weekly portfolio review sessions, problem solving sessions, office hours and capacity building sessions (Just Do Startup) between instructors and community members. This had given us a bedrock to provide values like technical development, financial education and digitalization avenues for these core members.

Circle community has a weekly addition of at least 10 members with no social media advertising or marketing. Just word-of-mouth outreach to prospective members.

We are excited to join a peer-to-peer network with teams creating value to MSMEs and the people behind them. In form of technical upskilling, financial education and digitalization. Through Solve’s global network, we want to learn from and meet various partners to help us deliver more value to MSMEs. We're looking to grow our institutional partners (both domestic and international training institutes, digital labour platform and labour communities) Solve's connections will be invaluable to ensuring access to a broader pool of  technical/financial/strategic resources to build more resiliency in our business capacity to deliver value to our customers.

We provide a tech-based solution to the business infrastructure problem as well as a human community for the people behind the businesses where interactive sessions for development are discussed. We also build specifically for MSMEs in the service sector to service a target human who doubles as their own business entity to establish a dual relationship.

Most small businesses do not have an easy and non-predatory channel to finance short term contracts and this infringes on their survival.

We also building a contracting template feature for MSMEs (contractors) to form issue and send legally binding contracts to their clients. This would ensure payment traceability and business structure professionalism.

We are a community-led company from product development to marketing. Members of our circle community showed interest in being involved in our product development and we clustered them to directly work as a team to help improve our product offering.

One year

User metrics: Grow to 500,000 MSMEs across various professions and beyond.

Engagements: Facilitate simultaneous professional conversations through Circle unlike the weekly sessions for a particular profession. By the end of the year, we should be able to facilitate various sessions running simultaneously every week. Also, we would enable collaborative engagements with partners.

Product and technology: Fully build out the prototype into a self-sustaining product with several moving parts that can be built on.

Five years

Our vision for the next 5 years is to unlock the growth potential of 30 million MSMEs in Nigeria and globally with our business infrastructure software. We plan to do this by:

1. Growing partnerships to create access to capital and customers for MSMEs.

2. Doubling down on creating value for the people directly behind the service based MSMEs through Circle community to create an emotional hook.

3. Using Circle as a word of mouth channel for user acquisition. 

Economic productivity through MSMEs access to equal credit and customers without bias, especially in developing countries: Our goal is to build a system that allows any competent person to contribute any business type to the total industry value chain of the country without bias or barriers. This is inline with target 9.3 of the UN sustainable goals. This will promote business inclusivity and fair market principles.

With ARC and Circle, we are unlocking the ability of MSMEs to translate to success and prosperity for their owners. Africans are known for their dogged work ethic, as shown by their ability to excel in climes where foundational problems are solved, but work ethic may not necessarily translate to successful business outcomes if the foundations are not well properly laid. Our vision is to transform the way service based MSMEs run their businesses in Africa, especially Nigeria by leveling the playing field to do business. MSMEs drive economies and the service sector runs our daily lives. An improvement in the service based MSME business infrastructure will improve productivity in the lives of the citizens.

Our business infrastructure platform is a software that solves the business foundations problems faced by MSMEs – this use of mobile and web tools will make our solution scalable and accessible to a high number of people.

Our community is starting a series event where we meet people in their place or point of learning or community to host sessions – this outreach strategy would enable us to acquire potential users with little to no cost since those people will eventually be the individuals behind future service based MSMEs.

We would build an ML/AI tool that would analyze a user’s previous financial data and client type, and use that to pre-qualify them for loans with loan partners. 

At ARC and Circle, we strive to create an environment that brings the power of diversity to life – where people with diverse experiences and background can thrive in their professional and personal lives. Circle is a community with various type of creatives with different personal profiles across gender, age, and geographical background.

ARC has a development that reflects the Circle community that is involved in it and that theme is reflected across other initiatives within the Circle community ecosystem. We have gender, racial and geographical representation within the team developing it and the team supervising the development.

We intend to codify this approach into our culture as we evolve from the early stages into the future.

The main driver of user acquisition is our ability to provide value for user at Circle. If we are able to lure in potential users at Circle to provide them with technical development, financial education value-add, it will be easy to market our business infrastructure solution to them. Our user acquisition cost is currently 0, and would be a little above that in the long run.

We have tested ARC with over 100 service providers with zero marketing spend. ARC has a monthly revenue subscription model to access the entire software, and also a commission-based revenue model for payment transactions and benefit subscription.

We would achieve more traction with a more comprehensive sales strategy and dedicated resources over the next 5 years.

ARC is a community-led project where the community that we have built handles product development and marketing. This has set us on a path of financial sustainability from the outset. The major expenses related to running this company would be the hiring of experienced personnel for specialist roles and technological/business costs e.g., cloud fees, fintech business fees, etc. 

From our community, we created a cluster that has a visual designer, a devOps engineer, 2 front end and 2 backend engineers, and senior mentors providing weekly evaluation of their deliverables, working on the product as part of the Just Do Startup program at Circle community to help them fast track their track record development in the technology ecosystem. This would enable them to learn live project execution and collaboration skills in the ecosystem. In return, we get a developed product.