Lagos — With plummeting economic downturn in the country occasioned by economic recession, the informal sector has been described as the viable and veritable option to revive the economy.
But more often than not, start-up owners managing small and medium enterprises (SMEs) have grumbled about little or no capital to jump-start their businesses, and even those with little capital to start off soon realise that the venture is dead on arrival. Experts say many start-ups in Nigeria often fail before taking off due to poor planning.
Recently, this debate came to the fore at a forum tagged 'SME 1000 Workshop' organised by Red Star Express Limited, sub-themed: 'Breaking Boundaries'. The event was intended to serve as a ground-breaking medium for Red Star Express to bridge the logistic gap faced by SMEs, give them support by sharing insights, information and industry advice as it affected them in relation to the growth of their business. It was also intended to identify business opportunities for the company while helping SMEs expand locally and internationally.
It was a gathering of financial experts and business managers united by the desire to help SMEs grow sustainably to contribute to the Gross Domestic Product (GDP) of the country and support efforts to take the country out of the current recession.
Speakers at the session included Dr. Emeka Osuji, a banker of 25 years experience who teaches at Pan Atlantic University; Mr. Ken Okpara, General Manager, SME Group, Fidelity Bank; Mr. Paul Foh, a Business and Sales Coach, among others.
Dr. Osuji started his presentation said "Most start-ups die before the first four years, and this is of great concern". He attributed the development to poor planning.
According to the financial expert, a prospective entrepreneur must first of all have a vision which he must develop into an idea.
"You must be in a position to create a vision of where you want your business to be in the next two to three years. Identify the challenges you face. You must fortify yourself with knowledge, enlighten yourself, be an encyclopedia in the business you do.
"Some of you are entrepreneurs because of circumstances. Whatever you are doing, you have to commit yourself to it. Have a goal, focus on it. You have a vision; then you create the strategies to bring the vision into reality."
Mr Okpara said it was not true that there was no capital to jump-start any business start-up, but that money was not the first option.
He said 90 per cent of start-ups did not exceed five years because the foundation was poor ab initio. He stressed that the success of a start-up was not premised on capital, even as he noted that the funds were available to fund any viable start-up.
"You don't need all the funding that you come across. You must be able to discover what type of funding suits your business and at what time do you need the fund? This is very, very important. You need to build a business model that supports the funding opportunities.
"Most start-ups hardly stay beyond five years and I will tell you the reason; that is because the challenges that affect small businesses are quite huge and endemic. Focus on critical sectors, recognise investment opportunities, build an internal strategy to survive, build your capacity as a business, build a process where investors can be interested in what you are doing, build a business model that supports your business opportunity and continue to innovate.
The President, Nigerian-British Chamber of Commerce, Mr. Adedapo Adelegan, reiterated the need for entrepreneurs to exercise patience while waiting for their businesses to grow.
"You must have the patience to wait for 10 years to grow. A business is like letter 'S' because when your business is at its peak, you start developing another idea. The reason for the second curve is to ensure that your business stands the weight of time. The internet brought information technology. I, however, urge you to use the internet to get customers," Adelegan said.
Similarly, the CEO of Tribute, Mrs. Hanna Einarsson, advised the young entrepreneurs to map out a clear vision which would be a roadmap to business growth.
She said: "Vision without a plan is just a dream, so you need to write down your goals, set clear goals, make good contacts, take care of your contacts, celebrate small wins, keep your team motivated and goal focused, always keep a positive mind, think deep, take advantage of great social media tools, partner with good people, build your tomorrow today and learn everything you can do."