Nigerian Entrepreneurs Advocate for Structural Growth in SMEs
Nigerian entrepreneurs embark on their business ventures with aspirations for substantial growth; however, the realization of such ambitions necessitates adaptive systems, even amidst arduous economic climates.
This sentiment was echoed by industry experts and successful business owners during a recent BusinessDay event in Lagos, which celebrated the country’s top hundred rapidly advancing small and medium enterprises (SMEs).
Josephine Ehimen, the founder and CEO of Nett Pharmacy, emphasized a critical barrier to growth: the lack of division of labor within small businesses.
“Often, these businesses become overly reliant on the individual founder,” she articulated at a panel discussion dedicated to operational scaling. “You find yourself donning multiple hats—accountant, marketer, and cashier.
For meaningful growth, it’s imperative that your enterprise evolves beyond your singular involvement.” With 21 years of experience under her belt, Ehimen asserted that all enterprises, regardless of size, require coherent systems that foster alignment among team members. “This is essential for establishing structure,” she stated.
Another entrepreneur, Adetola Akinola, founder of Glitz Group of Companies, corroborated the importance of structure in scaling. “Achieving growth is not serendipitous; it emerges from well-defined structures, effective systems, and personnel aligned with the founder’s vision,” she remarked.
Akinola urged founders to perceive succession as a growth strategy rather than merely a means of exit, advocating for a transition from founder-led to systems-driven organizations.
“Our businesses must be treated as entities separate from ourselves,” she explained. She also underscored the necessity for founders to mentor others, fostering innovative ideas that can serve as substitutes during their absence.
“It’s imperative that we cultivate replicas of ourselves in others. An organization should not falter simply due to the unavailability of its founder. Fear that others may not perform as well only highlights the need for mentorship,” she added.
Chris Imumolen, another panelist, recounted his initial journey, starting with a solitary team. “Recognizing the need for structure over time was essential,” he noted. He acknowledged the regulatory challenges that SMEs face in Nigeria, urging entrepreneurs to establish governance proactively rather than waiting for external regulation.
Access to financing remains a perennial challenge for SMEs in Nigeria, a point discussed by the panelists. Ehimen shared her early experiences seeking loans for her pharmacy, revealing how her underreported profitability hindered her access.
“My bank was essentially in my handbag,” she quipped, alluding to the inadequacy of informal financial tracking.
Hassam Imam, managing director of Keystone Bank Limited, represented by Ganiu Adebayo, reinforced this notion. “Ensure that every transaction flows through the banking system.
Our businesses thrive with customer growth, which, in turn, sustains financial institutions. Maintain meticulous records,” he advised. “When banks observe growth trends, they are more likely to accommodate your requests.”
Ehimen further elaborated, insisting that thorough documentation encompasses more than mere balance sheets; it includes insights into customer behavior and peak sales seasons.
“Record what proves effective,” she instructed. “Know your customers, their buying patterns, and the frequency of purchases. Operating on guesswork is counterproductive.”
Olumide Gbadebo, founder of Adunni Organics, urged SMEs to diversify their supply chains to ensure resilience. “Your supply chain can dictate your success. Avoid dependency on a single supplier,” she cautioned, recommending the maintenance of multiple contingency plans.
“Consider having both a ‘Plan A’ and a ‘Plan Z.’ Always expect the unexpected and establish strong relationships with suppliers, ensuring that financial constraints do not disrupt the supply chain.”
Gbadebo also advocated for localization as a cost-saving measure. “Wherever feasible, utilize local resources,” she asserted. “I minimized reliance on foreign exchange, which reduced costs and streamlined procurement processes.”
According to her, Nigeria possesses remarkable quality raw materials, and small enterprises should stock wisely, avoiding unnecessary purchases.
“To scale effectively, one must plan and invest in storage solutions that capitalize on price trends during bulk buying,” she advised.
The panel also discussed another impediment to scalability: competition for both product offerings and talent. Experts contend that businesses should prioritize collaboration over competition, built on a foundation of trust.
“As a nascent organization, you cannot operate in isolation. Collaborations enable a blend of ideas that can outmaneuver competition,” Flora Mbeledeogu, founder of MABA, explained.
She cautioned, however, that partnerships should be approached with care. “Choose your partners wisely and ensure reliability. All agreements must be documented, and safeguarding your intellectual property is paramount,” she concluded.
Source link: Businessday.ng.
