Overcoming Business Challenges in a Recession Time
- September 8, 2016
- Posted by: Amuzie Christian
- Category: Business
IFE OGUNFUWA writes on how business managers can tackle obstacles in the struggle for business’ survival
With the business environment becoming unfriendly daily, it is time for entrepreneurs to identify possible ways through which revenue is lost.
Stakeholders in the public and private sectors note that micro, small and medium scale enterprises form a major part of the country’s economy, as such, their survival is of utmost importance.
However, the non-conducive nature of the business environment, unavailable capital to grow and expand the business coupled with excessive government regulations are some of the challenges that hamper survival of businesses.
In the addition, some entrepreneurs’ lack of business management expertise and the resilience to find a way out of their business problems have been noted as other factors responsible for business failure.
Entrepreneurs often complain of difficulties in raising capital as the major challenge they encounter, but experts posit that there are more fundamental reasons why small to medium scale businesses struggle to survive in Nigeria.
- Unfriendly business environment
The World Bank report on the ease of doing business has placed Nigeria in the 169th position out of 189 countries.
This report has been attested to as accurate by small business owners who have experienced one form of bureaucracy in public sector agencies that will facilitate their business deals.
However, the Federal Government has promised to remove all obstacles associated with doing business in the country before the end of 2017.
Despite the promise, policy impediments still exist for Nigerian enterprises.
The Managing Director, Pebbles Enterprises, Mrs. Damilola Soetan, says many people who pose as tax consultants for state governments are regularly feeding on small enterprises, requesting for tax payments that are not recognised.
To tackle this, she says entrepreneurs should have a proper understanding of the sector in which they operate as well as the taxes and levies they are expected to pay to the government.
This, according to her, will prevent them from being defrauded and will reduce their overhead.
- Poor packaging and marketing
Business consultants note that most Nigerian-made products are rejected by consumers due to their substandard nature.
Soetan says some brands have lost their market share due to the competitive products with better packaging and marketing strategies.
She emphasises that entrepreneurs should not only be supported with the funds but should be trained in the proper production, packaging and marketing of their products for local consumption and exportation.
According to her, every entrepreneur involved in production should learn the international best practices in packing and product presentation in their sector.
In promoting new products, Soetan explains that entrepreneurs should use a combination of traditional and new media.
According to her, the use of new media will provide feedback on the product or service while the traditional media will reach potential clients who have not embraced new media platforms.
- Cost of generating electricity
Many businesses that are grossly reliant on electricity have packed up over the years due to the high cost of generating electricity.
In most instances, they use their petrol or diesel generators more than the affordable electricity from the national grid.
To minimise the expenses from power generators, Soetan suggests that businesses can explore alternative clean and renewable sources such as solar energy. Though it can be capital intensive initially, it pays off later after subsequent use, she says.
Source: Punch Newspaper