5 challenges Nigeria’s small businesses face daily
It’s a known fact that building a company is a herculean task because to begin a business is one thing, making it stand the test of time, rigours and fiery dart thrown at its survival is another thing. Buttressing this fact is that Nigeria is ranked 170 out of 189 economies in the World Bank […]
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It’s a known fact that building a company is a herculean task because to begin a business is one thing, making it stand the test of time, rigours and fiery dart thrown at its survival is another thing.
Buttressing this fact is that Nigeria is ranked 170 out of 189 economies in the World Bank 2015 ease of doing business index.
A business owner in Abuja, Nigeria
In Nigeria today, many Small and Medium Enterprises (SMEs) have sprung up due to the unavailability of jobs for young people. It is difficult to admit but with the amount of problems we have to grapple with as a nation, the more solution discovered for these problems by SMEs, the more insurmountable problems arises.
Nigeria is a country filled with so many creative and productive minds but with too many unforeseen forces, the profiteer’s from corrupt practices the intentions of such productive minds will forever be relegated to the background.
READ ALSO: Recession: Another major investor exits Nigeria
In this piece, Abayomi Gbade Bello writes on the pains of running Nigeria’s small businesses.
Read below:
1. Harsh environment and fluctuating policies
In my interaction with a business owner some years ago, he told me that one of the most difficult places to establish a business is Nigeria, due to the harshness of its environs and the frustration creative minded individuals experience in the generation as well as selling their ideas. Coupled with the environmental problem creative people are made to go through is the fluctuation of immediate policies that affect business in the area of financing, taxation and budgeting.
2. Epileptic power supply
This has been the bane of many businesses in Nigeria, as it largely affects the productivity of many SMEs, businesses that depend on power have either crumbled or found it challenging to meet up to the high cost funding alternative source of power. Investors that once had business commitments in Nigeria have moved to other countries, the unabated power situation makes potential investors considering Nigeria as an investment destination have a rethink. Other investors and owners of small scale businesses in Nigeria are also reeling under the burden of huge cost of generating electricity to keep their businesses afloat.
3. Hard times
According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. A closer look into this reveals that all SMEs are subjected to this test. How many small medium enterprises survive this hurdle is another puzzle to solve entirely. Every business is bound to experience ups and down moment. But in contrast to how micro-enterprises cope with such times when they can fall back or concentrate on other major investments as a form of generating revenue, many SMEs don’t have such luxury and if there is no a solid structure that backs the formation of such establishment they stand the risk of been blown away by the wind of hard times as many businesses are currently experiencing all over the world in the form of economic recession.
4. Financing
Crucial among the pains and difficulties many SMEs encounter in Nigeria is the easy access to funds to help develop their business level. The impact of micro-finance banks in contributing to the maintenance and in some cases expansion is evident but in many cases because of their limits, the financial target of many SMEs can only be met through the support of commercial banks who have stronger financial muscle but the latter are usually held back due to lack of trust in small businesses, as they weigh them on the scale of possessions such as assets and collateral to meet the required financial aid from the bank.
5. Risk
Entrepreneurs and managers of SMEs can be likened to football coaches who receive the encomiums of fans, critics and his employers alike when his team is producing results but he gets questioned when his team begin to falter. This is why owners of SME’s are huge risk takers, because when the business is not doing well, majority of the reasons for such will not be shouldered by the employees, government policies, over tax or even the current biting economy rather the owner of the business will be solely responsible for the solution to his ailing business or risk losing it altogether.
The post 5 challenges Nigeria’s small businesses face daily appeared first on Nigeria News today & Breaking news | Read Naij.com 24/7.