SMEs in Nigeria: Expectations vs. Reality
Let’s begin by stating a very interesting fact about SMEs in Nigeria. Do you know that there were 41.5m MSMEs registered in 2017 NBS/SMEDAN National Survey?
There are so many small business ideas running in the minds of potential business owners. However, research shows that some people who start businesses end up frustrated before the end of the first year. Why is this so?
They have been hit by reality. In this post, we will take a look at what expectations people have when starting up a business. We will take it further to see the disappointments that arise from the reality of running businesses.
What is an SME?
An SME is a business that has an annual turnover of less than N100 million and below 300 employees. Do you now see why there are so many SMEs in Nigeria? Most businesses you know fall into this category even if they have large offices with lots of packaging.
Starting a business in Nigeria: Expectations vs. Reality
When a new business idea pops into your head, you get excited. This excitement grows as you brood on this idea. You begin to fantasize about several things. Soon, you become Brain in the cartoon series “Pinky and the Brain.” All that is on your mind is “Taking over the WORLD!!!”
But are things as they seem? Sadly, the answer is a huge NO!!! The disparity between expectation and reality may be minute in some cases, but it almost always exists.
It is important to understand what reality presents before diving into your new business. Reality is not always bad, it might just be unexpected. Here are some misconceptions aspiring business owners have vs. what reality presents.
“Customers will find me once I launch“
You probably just had a good laugh after reading that line. While brooding on the business idea, your mind tells you that the idea will attract lots of traffic. You think about your business venue and the new touches that will drive traffic, not bad.
The reality is that without knowing you, customers will walk past almost all the time. Even the greatest brands in the world spend huge amounts on marketing. Without marketing, your business will end up at the bottom of the food chain sooner than you expect.
Reality tells you to find the latest marketing trends and invest in them. This is the only way to attract customers, not by “fine face” or “packaging” alone.
“The business will blow within few months”
This is not always the case. You need to give your business some time before it actually make the huge sales you are looking for.
You need to be very patient with your business.
“There’s lots of freedom, so I won’t be working so much“
This is another nice place to pause and laugh because it is one of the biggest deceptions ever. Many people working in regular jobs have the fantasy of starting their businesses because they want less work. You know that feeling of waking up when you want. Or strolling around your home in PJs until you feel like getting to the office.
It’s one of the deceptions of expectation. The reality is that you’re going to work a lot more, twice or thrice as hard. If you think that the work will reduce when you start getting lots of employees that again is false. Reality requires you to put in a whole lot of work every time.
You’ll end up not having closing hours or opening hours. This is because as long as your eyes are open, your mind will run to your business. Still wondering why your friends that run businesses are always busy? That’s your answer.
“Growing is very hard in a new market“
Like we said earlier, the reality is not always negative. The notion most business owners have about new businesses is that they’ll find it hard to grow. It is the same for business owners setting up a new branch in another part of the country.
Again, it is not as it seems. You don’t have to find it tough or spend excessively to grow in a new market. It won’t be an easy ride but it is pretty straightforward. Your job lies in understanding the new market.
Once you can, you’ll soon realize that your business is growing, even if it is not so rapid. In such cases, it is important to appreciate the growth process, no matter how small the growth is.
“I need lots of capital to begin“
Many business ideas remain ideas because of this expectation. Most aspiring entrepreneurs are still aspiring because they are looking for huge funds to begin. The key to a successful business is not having excess capital but being resourceful with your capital. Reality tells you to look for the most efficient ways to run your business and manage funds.
Running SMEs in Nigeria is no easy feat. It takes a lot of hard work. While we all have dreams and expectations, it is important to balance them with reality. What other expectations have you had and how has reality hit you in business? Share with us in the comments section below.