I honestly did not plan to pen Part 2 of this article (above) l did last week. But the response from our readers was overwhelming and many requested a follow-up. The message is very clear:
Many Nigerians are eager to leave paid employment behind and plot their own destiny on their own terms.
Even with all the bumps and spikes in the Nigerian business environment staked against entrepreneurs and small business owners, many still consider the Entrepreneur Route as the best route to their financial stability and future.
A job is a job. A business is a business! It would be pertinent at this stage to look at key factors that would be of profound interest to existing and potential entrepreneurs.
Do not take a loan from a Nigerian bank to start a business. It is dangerous to your personal health and financial
health of your business or enterprise. Such enterprise would be dead on arrival-even before you open shop!
September 21-27, 2015 “The continent (Africa) is changing. Nothing is pre-ordained. It depends on what we do and what our leaders
do. We need to ask ourselves: What is it that we should do today to make Africa what it should be?”
Donald Kaberuka Former President African Development Bank Nigerian banks are not small business-friendly or entrepreneur-friendly.
Our banks prefer to package loans for oil companies, multinational firms and importers of containers from China because they are in business to make quick money or earth-shaking returns which small businesses or entrepreneurs cannot generate for them in the short-term.
The naked truth is that our banks are not structured to support a startup from Conception, Birth, Infancy to Adulthood. They prefer doing business with ready-made businesses that can generate huge interests on investment as quickly as possible!
That partly explains why the Indians are making it big in Nigeria -they source credit from their home or international financial institutions at between 2.5 and 3 percent interest rate whereas Nigerian enterprises sweat on a benchmark of 22 percent, not counting Management Fees, Processing Fees and other sundry hidden charges that would ultimately Kill & Bury a new enterprise from Day One!
It clearly becomes a non-level playing field for local enterprises, leaving the Indians as Kings of the Market-right here in Nigeria. Looking for money for your startup?
I would suggest three tested options:
your personal savings, support from family and support from friends. The only factor at stake here is your credibility and honour to do well in your chosen line of business and pay back-Without Interest!
•The Line of Business
This factor ought to come first in the entrepreneurial hierarchy, but l deliberately chose to sound the money alarm first-lest somebody commit suicide even before starting out.
The basic rule is to do what you love, where you have market experience or core competence. The reason is simple-doing that will enable the enterprise to take off easily without formal training or incubation.
On the other hand, jumping into a business you do not love doing or do not have any form of experience or expertise means you are in it solely for the money. The success rate of such businesses is very small. The success rule is simple: stick to what you know-it brightens your prospect of market success or breaking even.
Naturally, nobody runs an enterprise alone. You need people to work with to realise the goal of the business. A major challenge of human capital in Nigeria is the quality of manpower available, especially for a start-up.
A start-up in the sense of having the capacity to attract, pay and retain the right caliber of quality people, who in most cases, are in competition with other employers.
In a typical demand and supply scenario, the few quality people are also wanted by other firms, maybe with a better working condition. The best rule is to engage those you can pay regularly without sweat and their number must be commensurate with your labour budget. Secondly, multi-task-to reduce the number of employees at the start-up stage.
For instance, one employee can handle two or three related tasks instead of engaging three persons for the three functions. It is a smart way of reducing overhead and maximising value from the available hands.
If your business or enterprise is a monopoly–goodluck to you.You can set the terms and parameters of the business and market right from your bedroom without losing sleep. Reason -the market has no choice but patronise your product or service as the only or sole provider.
But if there are other providers of the same product or service, then you have competition and the game changes dramatically.
Competition is both a challenge and opportunity. It is a challenge because you must contend with other providers of the same product or service. But it becomes an opportunity because it will bring out the best in you in terms of innovation, creativity and customer service.
The rule is very clear: you either beat the competition and remain in business or the competition will beat you to death! And the corporate graveyard is filled with tombstones of businesses that failed the rule. So-what is the solution?
Provide the same product or service in a different way, with added value at a cheaper price through better customer service. Folks– it seems l have run out of space. Well, the conversation continues next time on another burning (without fire) issue.