Stephen
Ojji is the Chief Operations Officer, Brimass Limited, a business
development and support firm based in Lagos. He tells OKECHUKWU NNODIM
why many young businesses fail, among other issues
Most young entrepreneurs run their businesses aground within five years. As a business support expert, what are the reasons for this?
Many businesses do not even survive
beyond the first year. High mortality rate of businesses among young
entrepreneurs can be largely attributed to inexperience and
incompetence. We have people who should be learning entrepreneurship by
working for others setting up shops. That is not to say that tutelage
and transition from paid employment to entrepreneurship is a sure
guarantee of success. However, it can adequately equip aspiring
entrepreneurs with the required experience and competence in their
business specialty, a key factor for attaining success which cannot be
overemphasised.
Other challenges facing young
entrepreneurs are poor leadership and management skills, dearth of
mentorship programmes, as well as inadequate infrastructure and support
system for business in their early stages. Lack of capital and poor
planning are also challenges that wreck start-ups and prevents them from
building a stable foundation. We always have the right intention when
starting a business, but many get anxious and excited and start the
business with little or no planning.
Apart from garnering experience, having
operational skill as well as leadership and management skills, it is
important for an entrepreneur to have a business plan laid out before
commencing business. This is extremely important if funding will be
sought to start up the business. Even if you are not planning to get a
loan to launch your company, this is the first thing anyone should do
when starting a new business.
Is the Nigerian business environment favourable enough for young entrepreneurs?
The Nigerian business environment has
its own peculiarity and comes with loads of opportunities which are
favourable for young entrepreneurs proffering solutions in these areas.
Businesses are meant to solve problems; so, when more problems abound,
more solutions are needed. In this context, the environment is
favourable. I am saying that there are lots of opportunities in the
Nigerian business environment for young entrepreneurs.
We can’t keep blaming the country when
foreigners are coming in and establishing sustainable and profitable
businesses. The margins on most business transactions in Nigeria cannot
be gotten elsewhere around the world. The environment is tough but the
gains are high – the riskier the environment, the higher the gains as
not everyone will want to play in that environment.
Most young entrepreneurs often say paucity of funds is a major challenge to starters in Nigeria. Do you share this view?
Honestly, I don’t share that view. I
believe that ideas rule the world and my thinking is that the
incompetence of the entrepreneur on how to sell his or her idea or
product is the main cause of his or her failure in finding funds. This
incompetence is displayed in the inability to make good presentations to
back up the idea that needs to be funded, not being able to find or
access the right source or mix of funding and not being able to scale
the idea down to a manageable size that can start with what’s available.
Do you think it is the responsibility of the government to financially assist young businesses in the country?
I think the job of the government is to
create the right environment and system for young businesses to access
financial support if and when needed. The government can enact laws that
will make those institutions that provide finance and financial
services to businesses to do their job better, faster and cheaper, but
the government has no business in handing out financial assistance
directly to businesses. This breeds inefficiencies, mediocrity and
creates rent seekers within the system.
From your experience in the country,
has the Nigerian government done enough in terms of promoting the
activities of Micro, Small and Medium Enterprises?
The role of government is to create an
enabling environment by providing infrastructure that supports business,
ensures security of lives and property as well as provides policy
support to MSMEs. When these conditions are met or reasonably achieved,
we can say that the government has done enough.
Interest groups have always consistently
urged the government to provide funding for small businesses, arguing
that it is the panacea for jumpstarting that very important sector of
the economy. However, the issues are beyond funding. Research shows that
in prosperous countries, 95 per cent of all businesses are small and
medium-sized companies, and they account for over 50 per cent of GDP.
Large multinational corporations account for about five per cent. But if
you look at emerging markets and poor countries, you will see that
there are a lot of very small companies and a few very large companies
and nobody in the middle. Yet, we know that it is the middle that
carries the economy, which is how you grow an economy and create a
middle class. That is called the ‘missing middle.’ There is the need for
multinational corporations in Nigeria to fully integrate MSMEs into
their value chains.
Would you advise a young entrepreneur to use bank loans to run his venture?
It all depends on what the entrepreneur
needs the money for and his or her ability to access the loan. Since
most young entrepreneurs are going into an unfamiliar territory, the use
of loans should be a secondary option. Entrepreneurs should look inward
for funds primarily from personal savings, family and friends. They
should also scale the business or project to sizes that require little
funding that they can access through these means. If it is difficult to
finance your venture from your own pocket, there may be the need to seek
funding from people who know and love you. That is family and friends.
Briefly tell us what you do at Brimass
We provide leadership, strategies,
support, education and guidance to businesses throughout each stage of
their development. In collaboration with the World Bank MSME project,
the Federal Ministry of Finance and Pan African University, we have
worked to establish and manage enterprise development centres in the
North-West region of Nigeria. This was for a project called ‘Grooming
Enterprise Leaders,’ where we equipped entrepreneurs with relevant
skills to grow their businesses.
We are looking at bringing young
graduates, business executives, aspiring and emerging entrepreneurs,
senior managers of organisations and chief executives under one roof to
learn from Brian Tracy, a world class leadership coach and mentor. We
are also working on leveraging the remarkable leaders’ conclave to
create a network of mentors and mentees among the expected 4,000
participants from various sectors of the economy.
The conclave aims to create an enabling
environment for emerging leaders to meet and look up to successful
entrepreneurs through mentorship and we are taking it to Abuja, Benin
and Lagos.
Tweet Follow @punshcomempower
50% off Hosting for your Website at GoDaddy.com!
It's a BIG Deal! $5.99* .COM from GoDaddy.com!
It's a BIG Deal! $5.99* .COM from GoDaddy.com!
Host a site without stress on namecheap eApps|YOUR APP HOSTING PROVIDER
Submit your Website
Free webmaster resources including SEO Tools, Computer Glossary, Templates Sign up to BIGTIMEBUX today!
0 comments:
Post a Comment