In my last post, I established that the major cause of youth poverty in Africa is not unemployment, rather it is under-employment. My E20 model, therefore, builds on the premise that these youths are poor but not penniless, lacked opportunities, but do not lack ideas. They are therefore willing, like other entrepreneurs around the world, to start up their own businesses. Only, they don't have enough capital, to give wings to their dreams and let it fly. Here is my model on how to solve the issue of finding seed capital.
I call this E20 model. The "E" stands for 'Ezeokeke", my surname. The "20" stands for the possible number of people a business applying this model can employ from the start. The E20 model is therefore a model which enables potential entrepreneurs lacking capital to unite their resources and talents and most importantly their goals, and work together towards achieving their combined objective. This way each individual achieves his or her goal within the corporate goal. In sum, the outcome is the sum total of the goals of the participating individuals.
The fundamental principle of this model is that large number of people unite their little money to form the huge capital necessary in starting up a medium enterprise. These investors themselves are the owners of the business and they themselves work in this business. At the end of the month or year, they share a percentage of the profit in the form of salaries among themselves. This model solves two major problems: it removes the difficulty of obtaining seed capital and it provides job to numerous amount of people.
An example is necessary to drive the model home. To start a medium business in Nigeria such as a fashion designing business, rice farming, IT and others, one needs at least 5 million naira (about US$ 31,152). A young Nigerian graduate hoping to go into business cannot afford this. But he or she can afford 250, 000 naira (US$1,556.86).
In the case of Nigeria, this young graduate could obtain this 250,000 naira through savings from pocket money, savings from NYSC allowances, loans and gifts from family and friends and rewards for doing menial jobs. The main point here is that the future entrepreneur, if she is willing to put in the time and commitment with total discipline, can come up with this amount, no matter the timeline.
The second aspect is that of team work. This aspiring entrepreneur must seek out like-minded people- willing to start up a similar business, lacking money but willing to come up with this minimal sum, and willing to work in a team towards achieving his dream. The aspiring entrepreneur has to look out for these other people with whom to share ideas and raise the total amount needed as the business's initial capital. It would be a form of the Master Mind Group advocated by Andrew Carnegie.
This group could include up to twenty members who will be starting up similar businesses. They must brainstorm together and share ideas on how their businesses would go. And most importantly, they will be willing to start up a similar business, decide a particular location and agree on roles and responsibilities to played by each member of the group.
The important principles and fundamentals of this model and together with its limitations and how to go about them are discussed in three above. Also, how charities, foundations and private individuals looking to help African youths economically can apply this model in doing highest and more sustainable good in Africa will be discussed in 3 above.
(To be continued)
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