The Nigerian Business Environment

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the Nigerian business environment

For many weeks, perhaps months, a question has been on my mind: Why do businesses not outlive their founders in Nigeria?

Interestingly, it so turned out that I was not the only one pondering about the issue, as today my mentor broached the topic and nicely dissected it!

Before putting forward the “autopsy report” though, let us talk business. Entrepreneurship has been a “fancy word” (sort of) going around gaining popularity over the past few years… define entrepreneurship and I will give you the meaning of “business”; perhaps the only difference being that “business” is broader and oftentimes used for a large-scale organization. For the sake of this article though, we will keep things simple!

 

So, what is business?

After reading many definitions, I summarized it thus: business is an organization (with legal backing) with people (staff) who share a common goal (subset of objective), bringing their resources (human/non-human) together (e.g. skills) to achieve set goals. A business or organization must either provide goods or services to meet certain needs.

Let us look into the key words:

  • Legal backing: in developed countries, it is difficult to see a brick and mortar company (an organization with physical presence e.g. office) that will not be registered. In Nigeria however, we get away with a lot of things, including the law! And I guess it is because of countries like ours that this clause is included in the definition, because if it is by default, it shouldn’t be necessary in a definition.
  • Staff: even if it is a one-man business, that one man is the staff! Staff are essential to the survival or otherwise of any business. Unfortunately, in Nigeria, once you employ your staff, the first thing going through the minds of 90% of them is how to make personal gains from your business, and this is the beginning of the end of that business. Mostly because of staff, businesses collapse even before they start in Nigeria.
    “And this is why I would rather not employ anyone”, someone might say. Hello! Even business owners in Nigeria kill businesses before they take off! And this has to do with policies, a subset for which is the next point.
  • Goals: even before the onset of a business (no matter how small), there should be a well detailed plan. Goals should be a part of this plan! Goals help staff harmonize resources and work to achieve the same end. Try to imagine two people in a boat, each rowing in a different direction. Plans (inclusive of goals) will direct the business and show everyone where to row.  Unfortunately, many organizations do not have a plan, and for those who do, perhaps 50% of them had it developed for them by someone who is not the visionary. Now while this is not wrong, it is essential for the plan developer to work hand in hand with the visionary so that the plan speaks his mind, and so that the goals are further hammered in his heart. The visionary should make it a point to read the plan over and over again till it is a part of him, and every now and then should remind himself (by reading again) so as to maintain focus. In the same vein, the staff should be made to read and digest the objectives of the organization, so as to be able to run with it.
    To this effect, organizations should have visual platforms that speak organizational goals to staff readily around the work place (avoid pressure though).
  • Resources: these are basically the raw materials needed to achieve the set goals of an organization. Human resource is a raw material, especially in service delivery.
    As I would not expect a large organization to lack these details, we should bring this write-up down to small/medium scale level. We should try as much as possible to make it a step by step process, easy to understand.

Why is this article relevant at this period?

For a country’s economy to experience sustainable growth, it must have a high number of small/medium scale entrepreneurs (SMEs) and this simply means you and I!

 

STARTING A BUSINESS

  • Idea: a business journey starts with the baby step called “idea”. The idea will birth the goals that will in turn drive the business.
    Idea is that good or service that comes to mind, to meet a specific need of the environment (society). In other words, open up your mind, identify needs and then find a solution to the need. The need is the “problem” while that solution is the “business idea”. The keyword here is the MIND. Your mind has to be sharp and receptive to identify a problem when it is seen.
  • Plan: a business plan is a “pen-on-paper” detailed writeup about the “idea” and how to make it work. Anyone who reads your business plan must be able to see into your mind and “feel” the idea.
    One important benefit of having a detailed plan is that it can be used as a tool to access loans.
    The downside in our own Naija is that there are many wealthy people around who do not have any viable business idea that can sustain their wealth and such are constantly on the lookout for a mumu that will pitch an idea to them; rather than teaming up with the owner of the idea, they steal it instead.
    However, you still cannot do without having a proper plan because the mind is always full and there is no way you will not forget some tiny details, and also there is no way to get your staff to read your mind; but as soon as the idea is developed into a plan, your staff have something to run with, and you have a hard copy constant reminder of why you are in business!
    As an old saying goes “if you fail to plan, you plan to fail”.  Lack of planning (specifically strategic planning) will surely result in the premature death of a business. It might thrive for a while, but only for a while.
    Planning entails a lot, and we will try as much as possible to look into it in detail.
  • Execution/Establishment: this is the phase where the ‘idea’ is developed (after strategizing) and brought to life to start solving that problem!
    It involves the running of the organization, business take-off, etc.  Of course, many challenges are to be expected at take-off and the early stages of establishment. As a matter of fact, it is wrong to expect profit within the first few months of establishment of any business.
    Any business is a venture into the land of the unknown, but risks have to be taken (this is an entire topic that will also be treated, for without considering the risk factor, there is nothing worth doing business for).
  • Business management: this is basically the running of the business, which can be short term (day to day) or long term (monthly/quarterly/yearly plans)

 

© 2017 Temitope Adelakun
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the writer, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

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