Important Statistics To Know As An SME In Nigeria
Many people dream of owning an SME in Nigeria and it’s not a bad idea to aspire to, considering that there are over 37 million SMEs in Nigeria. The truth is that the idea of starting a new business can be daunting. But by splitting the process into steps, it becomes easier to take the leap. One way to inspire yourself as a prospective or existing business owner is to look at statistics. These figures may seem a bit confusing but they come with great benefits.
Small Business Statistics That You Should Know In 2020
- Number of Smes in Nigeria
According to the SMEDAN National Survey of 2017, there are around 41.5 million SMEs in Nigeria. SMEs are businesses with less than N100 million in annual turnover and have less than 300 employees. The number of SMEs in Nigeria exceeds those in the USA. There are just 30.7 million SMEs in the United States. Interesting figure right?
- Number of Jobs Created by SMEs in Nigeria
Without even knowing the figure, from the number of SMEs in the country, it is obvious that SMEs are the chief employers of labor in Nigeria. A recent report shows that the SMEs in Nigeria have created up to 84 percent of the jobs in Nigeria. It is no secret that small businesses are usually the backbone of strong economies. If we want to make ours stronger, we need to create more small businesses.
- Most Common Reason for Starting Up SMEs
A study by Guidantfinancial in 2019 states that 55 percent of its respondents started their businesses to become their boss. Interesting right? It’s not a Nigerian thing, this reason prevails worldwide. The second most prominent reason is that people want to chase after their passion. 39 percent of the respondents of the same study provided this answer. Some of the other reasons include coming across the opportunity, a need for a retirement plan, and dissatisfaction with current jobs.
- Number of SMEs in Nigeria Hit by COVID-19
This is an important business statistic you should know as an SME in Nigeria. It is no longer news that times have changed because of the influence of the new coronavirus. How many small businesses in Nigeria have been hit by this pandemic? A recent survey shows that about 94.3 percent of the businesses in Nigeria have been hit by the pandemic. That number is so high considering the number of small businesses in Nigeria. With this figure, you can find encouragement to know that you are not alone in the pandemic. It should inspire you to take a bold step to restrategize and adapt to the reality created by the pandemic.
- The Percentage of SMEs that fail
When you know the number of businesses that fail after startup, it pushes you to do the right things. Research shows that over 50 percent of SMEs fail in their first year of operation. The study goes further to tell us that over 95 percent of SMEs fail in their first five years. These figures shouldn’t discourage you instead they should inspire you. Once you can find out the reason for their failures, you know what to do to succeed. It is impossible to eliminate risk 100 percent, but better understanding always helps.
- Reasons why SMEs in Nigeria Fail
The second most popular reason for failure among small businesses in Nigeria is lack of planning. Many businesses tie this reason to the first because they claim that they couldn’t study the market because of a lack of funds. Other causes of failure include reduced market demand, competitors, unfriendly products, inaccessibility to quality staff, etc.
- Number of Individuals using social media in Nigeria
It is no longer secret that social media is one of the strongest channels for SMEs to reach their target audiences. The question is this, just how powerful is social media? To know the strength of social media, you need to know how many Nigerians are registered to social networks. As of 2019, Nigeria had over 24.5 million social network users. The forecast is that by 2025, the number will almost double, reaching around 44.63 million users. When you consider this figure, it shows you why you need to take social media and digital marketing seriously. There are so many advantages that accrue to using social media channels for your advertising campaigns.
Without an iota of a doubt, 2020 has been challenging for businesses. Despite the challenges, so many businesses are restructuring to get the best results. You can do the same with your business.