The article first appeared on the entrepreneur. 

You have a powerful idea for the next big thing, but before you sell it to anyone, you have to get it all down on paper. It’s time to make a business plan.

The infographic details some major questions that aspiring CEOS need to ask themselves like, what problem is my business going to solve, what’s my company’s mission, and what do we do better than anyone else in the market?

The Standard: A senior Kenya Airways official has compared the airline’s return per passenger to what hoteliers make on a cup of coffee.

Speaking at last week’s annual African Business Travel Association (ABTA) forum, attended by a cross section of players in the travel industry, Regional General Manager for Kenya Airways, Dirk Buitelaar said: “We do not make any more money per passenger than a cup of coffee — and it is not a good cup of coffee.”

He attributed this to the “super expensive” cost of airline operations, especially on the African continent. “If I fly from Nairobi to South Africa, I fly over seven countries,” he said, and pays a cost for flying over each foreign air space.

Kenya Airways also have to pay for flight control in these countries, as well as for using navigation aids, Mr Buitelaar added. “And airports open at night [so] I pay for that electricity,” he said. “If my son came and said he is working in the airline industry, I would shoot him,” Buitelaar joked, before adding that people need to be sensitised on such expenses to understand the difficult environment Kenya Airways operates in.

According to Buitelaar, this means if Kenya Airways carries 400 passengers in one of its planes, it makes an average Sh250 in profit on each passenger, which adds up to just Sh100,000 one way. Kenya Airways has in recent times been struggling with huge debt burden, amounting to Sh77.8 billion as at September last year.

This amount comprises short-term loans, cash owed to suppliers and pre-payments due in advance of carriage. Kenya Airways made a loss of Sh12.5 billion in the six months to September 2014; the first half of its current financial year.

The following feature was first published in the Business Daily.

The big man’s black Mercedes S600 — with the vanity licence plate ‘BA1’ — has not been seen in weeks making the dash from his home in Curepipe to the SSR International airport at one end of Mauritius or Port Louis at the other.

Read More: Britam re-posts lower net profits after exit of ‘Ponzi’ directors

Dawood Rawat, whose friendship with the country’s previous Prime Minister has been described by a current Cabinet minister as “toxic”, is on the run.

Once chairman emeritus of the British American group of companies, he is now a fugitive accused of profiting from an elaborate scheme to cook the books at BAI Co (Mauritius) that saw liabilities played down and assets overvalued.

[dropcap] ITS TIME TO TRY SOMETHING NEW[/dropcap]

While Mauritian authorities concede some of the former Britam director’s companies were clearly in trouble, it wasn’t until his failure to make a cash injection led to Bramer Bank’s suspension that a crisis was touched off, revealing the true extent of his deception.

“We found there was a huge fraud case,” Financial Services, Good Governance and Institutional Reform minister Roshi Bhadain said.

“Policyholders money which had come into the insurance company had been passed out through various subsidiaries in Mauritius. Some of the funds taken (from) new investors were being used to repay old ones and the interest rates that they were giving were high, in some cases going up to 10, 12 and even 14 per cent (well above the average of three to four per cent). It had all the hallmarks of what is commonly referred to as a Ponzi scheme.”

According to a confidential report from the firm’s conservators, as at December 31 last year, BAI Co (Mauritius) Ltd’s assets were “substantially overvalued” at 33.6 billion rupees (Sh89 billion) and were only worth about Rs17.2 billion (Sh45 billion).

The total liabilities, estimated at Rs26 billion by BAI, were worked out to be Rs28 billion (Sh74 billion). Of this, Rs23 billion (Sh61 billion) were the result of the controversial single-premium schemes that government officials say was being run like a Ponzi scheme, using new investors’ money to pay off old ones.

The value of key subsidiaries like Iframac, Courts and the Apollo Bramwell Hospital were also revised downwards with by the conservators.

As a result the firm was not in a position to meet its obligations, even if it had not lost Rs6 billion (Sh15 billion) loaned to Bramer Bank when the liquidity crisis led to the loss of the bank’s licence.

The interim document, BAI Co (Mauritius) conservator André Bonieux says, shows a clear trail of bad investments through subsidiaries involved in everything from car dealerships to a private hospital. Britam, the 4.5 billion rupee (about Sh13 billion) “jewel in the crown”, stands in contrast to distressed assets like Iframac and the Apollo Bramwell Hospital.

BAI Co also has a profitable toehold in Equity Bank and Housing Finance through its Kenyan investment vehicle.

“The main problem was the underperformance of BAI’s subsidiaries,” said Mr Bonieux, listing the largest “distressed” investments as Iframac, the Apollo Bramwell Hospital and Bramer Bank. “And, of course, some of the insurance products they were selling were (being offered) at too high a rate.”

Under Mauritius law, insurance firms are barred from investing more than ten per cent of their assets in related parties. But as at December 31 last year, BAI Co (Mauritius) had 58 per cent of its assets tied up in struggling related firms. This was down from a high of 85 per cent in 2009.

The company’s regular insurance products — such as its various life cover, education and pension schemes held by some 135,000 people — were okay.

The poison lay in three single-premium investment products, the most popular of which was called Super Cash Back Gold and offered unsustainable annual returns of up to 14 per cent. The involvement of Rawat relatives in the management of many of these subsidiaries, as well as other holding companies, is also a red flag.

Seaton Investments, BAI (Mauritius) Ltd’s loss-making holding company, was headed by Mr Dawood Rawat’s daughter, Adeela-Feistritzer Rawat. Its board was stacked with male relatives with the only person not a blood relation being Adeela’s husband Claudio Feistritzer.

Adeela’s sister Laina headed a division at BAI, and the failing Apollo Bramwell Hospital was headed by their sister-in-law, Valerie Rawat. (BAI’s ultimate holding company, Bahamas registered KLAD Investment, is named for family members Kerima, Laina, Adeela and Dawood.)

The path to recovering from this crisis almost certainly involves selling the best-performing assets — in this case Britam.

“We have to make sure serious bidders come to the table. There must be a proper bidding process,” Mr Bonieux said. “I’d certainly like to do that with full transparency for BAI policyholders and management (and shareholders) in Britam. It has to be planned. There is no rush. But, having said that, I don’t think there is a strategy to keep Britam for a very long time.”

Bhadain, whose relatively new Ministry champions good governance, says the crisis and Mauritius’ response are an opportunity for change.

“Fraud happens,” he said, citing Enron and Lehman Brothers in the United States, and BCCI, the Maxwell Affair and Polly Peck in the United Kingdom. “It has been dealt with swiftly.

“The Finance Minister decided the National Commercial Bank was going to take everything on board and safeguard the interests of (Bramer Bank’s) depositors and employees. We reassured (BAI’s 135,000) regular policyholders that the government is going to secure their policies. Then we started a massive exercise to understand what had happened, who was responsible and why it happened.”

The result was a decision to fire the chief executive of the Financial Services Commission, the head of the Financial Reporting Council, and a ten-person national committee on corporate governance.

“The name of the game is to learn from these (crises) and bring appropriate legislation to make sure the loopholes people are using to abuse the system are closed down,” Bhadain says. Changes to the Insurance Act are being proposed, for instance, to clarify the definition of related companies and prevent the sort of transactions that brought down Mr Rawat’s empire. Is that sort of thing possible in Kenya?

British-American Insurance (Kenya) Managing Director and Regional Director of Insurance Steven Wandera points out that Kenya has tight restrictions on related-party transactions in the insurance industry, with the limit at five per cent and no ambiguity over what counts.

Local regulators, he adds, are conservative over how assets and liabilities are valued, requiring the former cover the latter. The Insurance Regulatory Authority also insists on independent directors and investment committees, and approves all products offered.

Business Daily: Britam has revised its books for 2014 a month after they were published, reducing its after tax profit by Sh342 million. The reduction was revealed two days after the resignation of two directors caught up in a corporate governance crisis sparked by the collapse of a Mauritius bank associated with the company’s single largest shareholder.

Mr Dawood Rawat, the Mauritian business magnate wanted for fraud, money-laundering and embezzlement, and Mr Moussa Rawat, his nephew, left Britam’s board on April 22, according to notices sent to regulators the same day.

The notices were, however, not made public within 24 hours as required by law. The duo represented the interests of BAI Co (Mauritius), which had a 23.34 per cent stake in Britam and in which Mr Dawood Rawat had a controlling stake. The firm has been placed under a conservator by the Mauritian government after evidence of overvalued assets and understated liabilities emerged.

Britam’s revision to its financial statements has been attributed to “an issue with respect to… the carrying value of a local associate company”. The group has two associates — Housing Finance (46.04 per cent stake) and Acorn Group Limited (25 per cent).

Last week, the Mauritius government said it would take control of Mr Rawat’s stake in the Kenyan firm as it begins a global hunt for assets that can be seized and sold off to repay victims of his fraud.

The search has so far unearthed a castle near Italy’s capital, Rome, and property in places like the United Kingdom, Croatia and Romania.

The asset seizures are part of a plan Mauritius Prime Minister Anerood Jugnauth presented to parliament on Friday, whose aim is to compensate policyholders and investors caught in the Ponzi-type fraud affecting BAI Co (Mauritius) and its sister company Bramer Bank.

A yet-to-be-appointed national administrator for a proposed National Property Fund and SICOM’s board of directors will decide whether and when to sell the stake in the Nairobi-based regional financial services group.

The country’s Financial Services minister Sudarshan ‘Roshi’ Bhadain said the sale of BAI Co’s stake in Britam to interested parties was likely as the national insurer tries to get value for Mauritian policyholders.

The conglomerate that Mr Rawat owned is also invested in Botswana and Malta. Botswana regulators have delisted BAI (Botswana), in which BAI Co (Mauritius) holds an 80 per cent stake, and placed it in receivership.

This article was originally posted on MyTopBusinessideas

1. Handle the Information about Bank Fees and Hidden Charges with Levity
Banks are in business to make profits and they take advantage of ignorant customers in the bid of making profits. One of the ways banks rib you off your money is by deliberately handling the information about bank fees and hidden charges with levity. Marketers that work with banks have been trained to sweet talk their customers into collecting loans, collecting overdrafts (cash advance), opening special accounts and signing other special package without emphasizing on the fees and hidden charges it will attract.
In other to prevent this from happening to you, ensure that you ask all the questions that will enable you have good understanding of all the bank charges and any other hidden charges. If you are not comfortable with it, you can pull out from the deal. That is only when you can make informed decisions.

2. Increase the Costs of Maintaining Your Bank Accounts
In the bid to market their products to you, banks ensure that they step down their account maintenance charges (bank fees) so that they can attract customers. But the truth is that most people don’t even bother to check the percentage increase in the cost of maintaining their bank accounts after a year or more. Banks take advantage of this to increase these charges to as high as 300 % after a year or more in order to rip their customers off.
In other to prevent this from happening to you, ensure that you request for the modalities for increasing the cost of maintaining your accounts and if you are not satisfied, threaten to close your account with them. For example, a bank might increase the COT on your account without informing you that is why it is important to always request for your account statements at regular interval. It will enable you to see all the discrepancies in your accounts. Beside, you can negotiate your COT with your bank.

3. Encourage Consumer – Gouging Payday Loans (Cash Advance Programs)
One of the ways banks make money is through the interest they get from loans so they trained their marketers to force loans on their customers; those who they know have the capacity to pay back the loans. As a matter of fact, banks encourage workers who have salary accounts with them to collect cash advance. Most of these employees will feel that the bank is doing them a favor when in the real sense the bank is trying to rip them off. In other to prevent this, you must ensure that you avoid cash advance programs as much as you can and then try to live within your means.