Micro, Small and Medium Enterprises (MSMEs) have been receiving a lot of attention from the government and the private sector, but this has not done much to improve the statistics of the businesses that survive to the growth stage. This is because financing is not all that is needed to grow a small business.

Some business owners think that having a corporate account will solve all their money problems for them, but even with that, many of them still struggle to break even and become profitable. While banks are an important part of the system, all the business owners get from banks are the cash flow statement, without any corresponding insight or operational tools to address challenges.

Co-founder of Prospa, Chioma Ugo was a guest on the Nairametrics Business Half Hour show where she explained how business owners can use the suite of tools provided by Prospa to create and maintain a financial operating system that will keep the business sustainable.

Prospa was our way of trying to solve for other business owners, the challenges we encountered in our businesses. I have actually launched two brands in the past, I have been a business owner and I have invested in some small businesses myself. So, I know the perils of trying to grow a business in Nigeria.

“Just trying to set up a business account can take weeks on end. Every business owner wants their business to grow without having to deal with such drawbacks and that is what Prospa does for you” Ugo said.

Founded by Frederik Obasi, Chioma Ugo and Rodney Jackson-Cole in 2019, Prospa provides a financial operating system for small to medium-sized businesses, with a suite of tools to manage their business finances. As cash flow is the bloodline of any business, these tools come in handy to keep the business better organised, with a defined cash flow and automated processing for recurrent tasks.

After downloading the mobile app from the play store, or the web app for desktops, business owners can create a business account in minutes. This saves them the long hours and processes it would have taken to go to a physical bank to get it done.

You can download the Prospa app on Playstore, fill in your details and you get an account within 5 minutes. If you are a registered business, you need your business details, CAC documentation and other things. But if you are unregistered, you register as a freelancer and you still have access to a business account and tools to manage your business,” she said.

Managing cash inflow, taxing and other expenditures can also be a bit of a challenge for small businesses, but the sub-accounts feature takes care of that so that such processes are automated.

“If you want to manage your money efficiently, you could create a subaccount for each specific item and have a unique account number for that purpose. When you receive it, it will be automatically disbursed into that account and for that purpose. People use it to manage different aspects of their businesses and even for savings.

“For instance, you could create a sub-account for VAT at 7.5%, and whenever your business account receives any payment, that percentage will be automatically deducted and disbursed into your tax account. So when it is time to remit taxes, you don’t have to start calculating or struggling with it. You could do the same for payroll, savings, loan repayment and anything you wish to. This is a way to structure your cash flow so that you do not continue to struggle with [such] things,” Ugo explained.

In this way, any business owner that has taken a credit facility or loan need not struggle with repayment. He can simply create a sub-account that takes a certain percentage of all revenue and use it to offset the loan. This comes as a huge relief for small business owners who mostly struggle to pay back loans.

There is a webstore feature as well for vendors who are ready to take their goods online to reach a larger audience, and it only takes minutes to set it up using the mobile or the web app.

Micro, small and medium business owners can also use the Prospa budgeting solution to create monthly and weekly budgets with which they run and manage their businesses.  Nothing helps cash flow better than deciding beforehand, how much is going to be spent and what for. With proper budget and revenue goals, business owners could begin walking their businesses to prosperity.

Prospa recently closed a funding round and this is being channelled towards scaling and expanding operations to reach more business owners across the country. With more than 40 million micro-businesses underserved in some form of banking service or another, there is a lot of ground to cover.