Successful entrepreneurs deserve praise. First, they had to confront and conquer the intimidating fear of starting a business. Thereafter, they battled and subdued the unavoidable myriad of challenges of doing the business. At the back of their minds, while starting out, were grim statistics relating to the rate businesses fail. They had either heard or read stuff that told them that the chance of their businesses surviving its first year was extremely slim or that 80 percent of them who knew next to nothing about marketing would not survive. They didn’t allow such statistics to bother them. They braved the odds and came out victorious.
This article is to open the eyes of entrepreneurs whose businesses are dying to strategies they can adopt to revive such businesses and be counted amongst successful entrepreneurs. As usual, the solutions come from tested hands – from a very experienced business coach and business owners who confronted their challenges eyeball to eyeball and revived their businesses instead of letting them die to become numbers in the infamous statistics of business failures.
Perspective Of A Business Coach Causes Of Business Failure
Mr. Yinka Fisher is State Coordinator, Small and Medium Enterprises Development Agency of Nigeria, Lagos. In his capacity as a business coach, he says, “A lot of things warrant businesses to fail. The major one is the capacity of the business owner. Does the person really understand what it takes to effectively and efficiently run a business? This might also be tied back to what is called experience, because some people are into business not because they understand the terrain of the business but because another person is doing the business and is making money.
A business might also fail if proper records are not kept. When you don't keep record of a business, you can't know the performance of that business. There are lots of other stringent conditions which might be internal or external. If you look at your SWAT analysis, there are some things that are under your control and those outside your control. There are some governmental issues, but as a business owner, when you are not well informed about such issues, it can collapse your business.
That is why we say, when you need businesses to grow effectively and efficiently, you need to come to SMEDAN. We will take you through the challenges you might likely face starting that business and while that business is on, we will monitor you because we do what is called extension services. It is like a medical doctor taking care of a patient, if you have a small ailment and you don't go to your doctor for immediate intervention, it might lead to serious consequences. It is the same with the issue of SMEDAN”.
Solutions
Fisher says, “There are lots of things that can solve challenges relating to collapse of business. As I have told you, SMEDAN is part of it. Your networking ability is part of it, because as a business owner, you must not just live within yourself - that is why I said a business owner must be an extrovert, not an introvert. An extrovert is ready to meet with new people and the more you meet them, the more you are getting a business solutions to a dying business. When you speak out about your problems, others will be ready to proffer solutions, but when you are not expressing yourself, what do you expect?”
Business Owners Speak On Nature Of Their Business
Mr. Azemobor Gregory, Managing Director, Bethel Mendels Nigeria Ltd, says his company is a marketing company that imports innovative products into the Nigerian market. “We have strong bias for empowerment and eradication of poverty through the products we market. We also empower Nigerians through the resale of our products. Currently, we are trying to diversify into manufacturing and we have started manufacturing of a product known as mattress protector – a complete mattress cover designed with a zipper. It has one side designed with American fabric and the other side designed for nursing mothers”.
Gregory says he started the business, which is in its 14th year, in 1999. “We started very small and we were consistent, despite lots of challenges faced along the line. If I must say this, most people who want to go into business always look at the bigger picture – they want to start big and in their attempt to start big, they will be waiting for the resources needed to start big before they will start. It is not very easy to start big, you can start small – this was how I started. It is going to interest you that I started this business with N20, 000. I borrowed from my mother in the village. But by the grace of God, today, it has grown to a multi-million naira business empire. You just have to be sure where you are going to”.
Mr. Philip Matthew, Business Development Manager, Exclusive Treat Cleaners says his business is a subsidiary of Exclusive Treat International Ltd. “We are into laundry and dry cleaning services and we offer cleaning services for garments, suits, wedding gowns and other types of clothes. I have almost five years experience in the business”.
Mr. Tony Umechukwu, Director, Zeton Integrated Service Ltd, says he is into Information Technology business, selling mainly computer products - laptops and desktops, software, projectors, access control systems, etc. “We also deal with networking, licensing and maintenance ... I have been into the business for over five years”.
On Challenges That Almost Killed Their Businesses
Gregory says, “I have faced very serious challenges. We actually started with the manufacturing of the mattress protector and we made a lot of money in 2001/2002, but something happened. Government came out with a policy banning the importation of fabrics. This affected the business and we couldn't get raw materials for production. We diversified into manufacturing of liquid air fresher.
The challenge we had with this was lack of enough finance and so, we could not standardize the product. There were times my boys went out to market the product, but because of NAFDAC number, they always got harassed and that affected the production of that product. 2004 to around 2008 was indeed a very trying period for my business. I can tell you, it was hell between that period, to the extent that I could not pay for the office we were using in Mafoluku, Oshodi, Lagos, and also I could not pay staff allowances”.
Matthew says intimidating challenges have occurred to his business over and over again. “In 2010, things were very tight, when my business was undergoing financial downturn. I wrote a business plan and made every possible effort in sourcing for finance to revive the business, but it was as if all doors to such opportunities were closed. It got to a stage, when a thought in me said, "Guy, you are a graduate with other professional certificates and you are a trained entrepreneur; why can't you get a paid job and leave this business to come back to it later?" That was how tough it was.
Umechukwu says, “One of the greatest challenges I have ever faced in this my IT business was when I did a business with an organization that involved a huge sum of money which my bank financed. Along the line, something happened and the organisation failed to pay as at when due based on our initial calculation. We had to pay the money back to the bank and clear off the interest. Then, I had to be running around to beg for money. Also, sometimes you will propose a plan, but bottlenecks might not allow its fulfillment, and as an importer there may be challenge of clearing the goods at the port”.
On How They Confronted Their Challenges
Gregory says, “Because of my experience in this trying period, I learnt the lesson of diversifying into the marketing of various products. I didn't start out with importation of products but by sourcing for products locally. So, within that period, I learnt that there is need for one to have multiple streams of businesses for multiple incomes. This is because the market is dynamic - whatever business you have today, there is going to be the challenge of competition.
Technology can also render a business obsolete. You can remember those that are into the business of cyber-cafe, technology has made it possible for one to surf the internet, even on one’s phone. So, as a business man, you must be up and doing, you must strive to market your business, because a business arena is a battlefield. You must be up and doing to be able to source for new products from time to time. Also, you will be confronted by government policies.
That period actually got me to look inward, to develop my capacity as a business man. I was, however, consistent in the kind of marketing I was doing for my business - I did not deviate, as that is the problem most business owners have. Once they have challenge in a particular business, they jump into another. It is obvious there must be a challenge in any business you are doing, but the only pill is that you must persevere and be consistent, because you can't be a master in a particular business, until you have spent years to learn the ropes, to develop yourself and to withstand the challenges inherent in that business. I am saying this for the benefit of those who are facing challenges and something inside of them is telling them to quit for a paid employment.
Every entrepreneur will always face challenges. This is to test your belief and decision to remain an entrepreneur. In fact, challenges give you the opportunity to look inward and learn so many things. Mind you, there was no formal training before we started then, but all we learnt was by experience, and thank God a newspaper like SuccessDigest was there to give me ideas. So, I am equally using this opportunity to give credit to SuccessDigest, because there are valuable lessons I have learnt reading it that helped me as a business man. I will advise our young business owners to invest in learning and retraining”.
Matthew says, “One thing that kept me going was the passion and vision I had for the business. It has always been a thing of joy when I see my staff and it is like I'm adding value to someone's life. Also, my dream and vision of being an entrepreneur and reducing unemployment in the country was one of the major things that kept me going. So, I tried to survive during that period. Aside this, you know as a business man, challenges occur on a daily basis. One of the major challenges is when clients are complaining on a daily basis and you are making efforts to satisfy them, but maybe one or two things are going wrong somewhere along the operational process. Some clients would shout at you not minding your status.
You ask yourself why you must take such humiliation. But you are there to serve them. So, in such a situation, I always remain calm, because I am a trained entrepreneur at the Lagos Business School and I have been to Entrepreneurship Development Centre of Business. So, with the experience, I used to take things calmly with them - I allow them speak their minds and I put myself in their shoes. At the end the whole issue, I try to find solution to the problem, in order to retain them as customers”.
Umechukwu says, “About that my major challenge then, I had to sell a property to pay off bank debts, though this might not work for others”.
On Their Advice To Someone Passing Through Hard Times In Business
Gregory says, “If I am to mentor anybody, I will tell him or her, "don't just jump into any business. There is need for you to carry out comprehensive research about the business. If there is need for you to undergo some kind of apprenticeship, you need to spend more on learning. Doing business is not just about money alone. I have always told people that, it is not just money you need to do business - this is one of the things I have learnt and I have told you how I started. If I'm to put them in various proportions of what you need, money is just about five percent or 10 percent. What you need more is for you to know what exactly you want to go into and what you are doing.
What you need is the passion for the business. What you need is adequate training. You need to equip yourself, because challenges will come. Don't jump into business because your neighbor is making headway in the business. You don't know the price the person has paid to learn all that he has learnt, that enabled him succeed in the business. Also, what I have realized is that, one of the things that ensures the death of most businesses is poor marketing. Eighty percent of businesses die as a result of poor marketing.
You have the product, how will you get people to buy the product? When you get them, how will you relate with them to convince them to buy the product and keep them afterwards as faithful customers? Some also say that the money spent on creating awareness or on advertisement is a waste - they are missing it all.
Here, what has been working for us is that we are not miserly with the money we spend on marketing, advertisement or making noise about our products. On a monthly basis, we spend close to a million naira placing adverts in various media, including bill boards. People should also make use of the advantages of Internet and all other social media to create awareness. Internet has really made it easier, as you can reach out to a whole lot of people at a very cheap rate. Marketing is a skill, so if you must succeed in doing business, you must take marketing as paramount”.
Matthew says, “If I am to advise an entrepreneur undergoing business challenges, the key word to have at the back of one’s mind is: "Why are you into this business?" If you can answer that question, the reason will keep you going in the business. But if you don't have answer to that why, then there is a problem somewhere - maybe you need to do a rethink or take another course of action”.
Umechukwu says, “It all depends on the nature of the difficulties the person is facing. When you know the particular problem, then you can advice. Take for instance, the person is faced with financial challenge - in need of money to stabilize the business and he or she doesn't have anybody to support, the person needs to source for loan. These days I think you can walk into any microfinance bank with your good business idea and you will be given funds.
Though, microfinance banks are claiming to help growing businesses, but I think some of them are killing the businesses, because the interest they charge is on the high side compared to commercial banks. You know it is very difficult to access loans from commercial banks, if you don't have collaterals and all that. It is always important to cross all the "T"s and dot all the "I"s before you go into anything that deals with banks. When in business, it has to do with passion and it makes you to drive your business forward. If you are facing, either managerial, financial or other challenges, the most important thing is for you to understand exactly where the problem is. It is when you know where exactly the problem is coming from, that you can proffer solution to it. If you are having managerial challenge in your business, it is good for you to get good advice to really manage the business - there are professionals to call to do that for you.
This is because if you are running a business and there are lots of loopholes, you will find it difficult to survive - you have staff in your company doing things the way they like and when you are not there, so many things go wrong. You have to check-mate them to really get it right. Another thing: for business to strive, there should be some element of financial backing”.
Fisher says, “Normally for such businesses having such challenges, there is something called business clinic that we normally conduct and the essence of business clinic is to diagnose the problems relating to your business. By the time we take you through that business diagnosis, we will be able to spot indices telling us that something is likely to happen. Once you start seeing that signal, solutions start coming in.
Different people with different ball games - I can't use client A to solve client B’s challenge. So, when you come on a different platform, I will be able to look based on your business challenges for solutions to be proffered”.
On Power Of Marketing In Business Revival
Gregory says, “For those just starting, there are less expensive below the line advertisements they can do. For instance, they can make use of fliers. Do you know that with less than N4, 000, you can print close to 2,000 copies of fliers? So, don't tell me that if you distribute 2, 000 copies of fliers strategically, you won't get response. If you don't have enough money, you can use bulk SMS, bulk e-mail, there are also free websites where you can place your adverts and products online - olx.com.ng - when they google, they’ll see your products there.
The bottom line is that, our people need to transmit from the traditional way of doing things to the digital way of doing business. Let me tell you, between now and the next ten years, if your business is not online, it will be obsolete. Right now, the office you rent doesn't matter - you can see where we are now; it is not along the road, but I can tell you that we have customers all over the country. We do export goods to other African countries.
The era we are now is not location based, as you can see many online shops springing up - Jumia, cheki.com.ng for cars and the rest. So, I don't need to go to Shoprite to buy what I need. My advice is that they should embrace the digital way of doing business - online platform. If you get marketing right, you don't need to stock products. It is the traditional business mentality to stock products. If you rely on only word-of-mouth to people you know, you can't go far. So, marketing is key - an investment in marketing is not an investment that is wasted, but an investment that drives sales and brings results.
Matthew says, “Just as cash is a live-blood to a business, marketing is the veins through which the live-blood circulates through the whole system of the business. Without effective marketing, no business can attain its vision. So, intensifying your marketing means, firstly, you have to understand your products or services. The next question is: “Who are the persons that need this services or products?” Then: “Where can we locate them?” “What price are they ready to pay?” Before you even go out for marketing, these questions should be answered. You also need to go out and do what we call marketing research.
By the time you do your marketing research, you will know the price your competitors are giving out and you will know why they are patronizing your competitors and also know the fair price your prospective clients are ready to pay to avoid over or under pricing. By the time you have this general knowledge, you can now hit the field - that is to say, you have already sharpened the cutlass just to start axing the tree.
You may also need to organize a marketing team. If you do not have enough resources to build a marketing team, everybody becomes a marketer – ready to go out for intense marketing like doing roadshows, distribution of fliers, sending of proposals to corporate organizations, depending on who is in need of your service. Online marketing is very important nowadays. You have to open a Facebook page for your organisation, join professional networks like LinkedIn, a very good professional network where you can get people that need your products or services. So, by the time you post your adverts and come out with promos, people are ready to patronize you”.
On What Should Be Done If The Downturn Has Anything To Do With Finance
Gregory says, “Honestly, I don't think finance should be the problem. Once you believe or you have the mind-set that all you need to start a business is money, what happens is that, your creative mindset will be shut down. It is shut down because you believe that until you get the amount to start, you can't start. But if your mind is free and you are asking yourself, "How can I do business even if I don't have money on my own?" There are lots of manufacturers there, looking for people to market their products - if you have the marketing skills. People don't understand that marketing is the key responsibility of an entrepreneur.
So, you can start out by reselling other people's products - when you will need money is the time you are going into manufacturing of your product. Let's look at it this way, when most people are going into a business and you go through their estimates, you will be amazed that office space will take about 10 percent. Why don't you look at how you can start a business without paying a dime for office? Furthermore, you will also see that getting the product stocked takes the lion percentage.
You can look for someone who has product to resell. So, I put it to you that you can start a business without you having money, if you have the marketing skill - this was what I have done. Giving you an instance, what gave us breakthrough was that, we understand the importance of marketing and advertising, so I place adverts regularly. It was as a result of this that an Indian man in Idumota called me through the advert and he told me he has about five loads of containers of some decorative candle stands. We met and I told him we can market the products, but we are not buying them and the man said okay.
That was how we wrote an MOU, got a guarantor and like three cartoons of it, through aggressive marketing, within four months, those five loads of containers of candle stands were completely sold out - this was without me investing a dime. However, I was able to realize N4 million - way back in 2008/2009”.
Matthew says, “In this part of the world, the major business challenge is finance. Most businesses, mainly small businesses, are under-capitalized, but what I would advise is to try your best to start small, focus on intense marketing and make every effort to reduce costs to the barest minimum - operate cost effectively. So, as time goes by, you will begin to see the light of the day”.
Umechukwu says, “In every business, the first and most important thing is to have the idea. When I started mine, I didn't have money - I was borrowing money from my brother's wife to transport myself to Ikeja. Somebody out there who wants to start a business only when he or she has N1 million, he or she is just deceiving himself/herself. There is never a perfect condition. Whatever thing you have, you have to start with it - if it is idea you have, go ahead and do something. By the time you start doing it, help will come.
For instance, if you want to do this kind of my business - IT business - what the person needs to do is to get a friend or someone who is into this business and be coming around to stay with that person every day, with a view to getting the idea of what they are doing and as you are there, you will be meeting people and getting their contacts. Later, they will start calling you to supply things to them and money starts entering your account. With this, you start to get money for survival”.
Fisher says, “Talking about finance for a business, I always say in our capacity-building class that, "as blood is to the body, so also finance is to the business." But one thing is paramount: finance does not start business. Finance only comes towards the end of a business. One problem Nigerians have is that they want to run the business all by themselves. Businesses are supposed to be a partnership thing. Initially when you are in business, you can jump-start it, but when the business starts growing up, there must be need for partners to come in.
Let me cite a case study. When I was running my poultry project, I was doing it alone, but when I realized that I needed a partner, I invited a partner into it and we are expanding now as we are doing the business. Doing business alone is like working hard and not working smart - a smart worker will always get higher returns on investment, but a hard worker will get a very low return in investment, because what he has been doing is "only me." When you allow people to invest ideas, inject funds, inject business management into your business,
it will go wide and that is where the issue of venture capitalists comes in. These are new breeds of people who finance businesses, with the aim of letting it grow. They are there to give you managerial, financial and human resources advice and at the end of the day, something you have been doing all alone, you will realize that two good heads are better than one. So, it takes you out of the shell. One thing about business is about trust and making it formal. When you are in business, let it be a business that is registered by Corporate Affairs Commission, so that all documentation can become an official thing.
If you have the lion share in the business, definitely, you still own the business, while others follow. But when you don't allow others to inject their ideas, knowledge and their know-how, it will not grow, even if it will, there is going to be a limit of growth.
Source: SuccessDigest
Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of OLATUNJISPEAKS.com.
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