Dear Young Entrepreneur-Agroprenuer : the formalisation song
Of course, running an informal business means no tax and license fees to pay, no labour laws to observe and somewhat, you enjoy healthy profit margins. However, operating informally is costing you bigger and vital opportunities for the growth of your newly established business, primarily on access to business loans and entry into mainstream product distribution channels.
Operating informally is limiting your access to wider loans and other business support services. Generally, banks, microfinance institutions and other money lenders, do not advance loans to unregistered business operators or entities. Formalising your business enables you to open a personal and business account which confirms your relationship with a bank. In this instance, a bank will begin to understand you and your business more to advance business loans and other financial advice at cheaper and favourable terms. Your business bank account will also enable you to accept invoice payments from your customers, pay your suppliers and keep your business income separate from your personal accounts.
It is also quite difficult or impossible to sell your products to customers through bigger channels like supermarkets when you are not registered. A registered business is a basic requirement for one to be drafted into a suppliers' list of prominent grocery and other products retailers. When you have a registered business, you are able send your products for standard quality certification to propel an easy access into mainstream distribution and value
There are a lot of other compelling reasons for registering your business. Your ability to create own brand identity and being able to bid for government tenders is motivated by a having a business which is formalised. Moreover, the impetus for business continuity in the event of the death of an owner is clear and strong. Formalising your business gives you that urge to quickly transform or navigate your entrepreneurial and business acumen from an amateurish approach to a professional flair which favours ambition for business growth and generation of even healthier profit margins
