4th March, 2015
By Oluwagbenga Oyebanji
Businesses are facing serious crisis in the country as the Peoples Democratic Party, PDP, government has decided to play politics with the standard of living of Nigerians and economic growth. Big and medium scale companies are breaking new grounds but start-ups are finding it hard to transform their businesses from small to medium or from small to big businesses. The economics of revenue is very potent for the development and growth of a company. It’s like oxygen to the respiratory system and living organism in the ecosystem.
Can we imagine a world without oxygen for 5 minutes? Industrialisation and the world economy will get stalled, electric grid will not be powered efficiently because of de-oxidization, plane taking off will crash to the ground, while plane already flying will become dysfunctional. Every building made out of concrete will turn to dust. Oxygen is an important binder to concrete structure and without it the compounds will lose their rigidity. Every living cell would explode in a haze of hydrogen gas. Water is composed of one-third of oxygen. Without it the hydrogen turns into gaseous state and expands in volume. The ocean will evaporate and escape into space as oxygen disappears from the ocean. Living things in the water will die. Everything above the ground will go into free fall because oxygen makes up 45% of earth crust and mantle which means the world will come to an end.
That is how important money and revenue is to business. Be it start-up, medium, or large firm, the specifics of business must be understood. Customer, product and transaction are the hardware of business, while skilled employees, innovation and entrepreneurial leadership are the software. These specifics are primarily what stimulates money and revenue. Apple in 2013 generated revenue of $171 billion, today Apple has a fan base which are loyal to her products, like Barcelona and Madrid’s fans are loyal to Christiano Ronaldo and Lionel Messi. Apple created a culture of product loyalty like pop culture in music. When you lack an understanding of the specifics of business you will not generate money and revenue. The business will die instantly without money because you won’t expand. Also without revenue it dies slowly because you will not grow. As a start-up a deep understanding of the specifics of business is important to your development and growth. Factors of production are incomplete without entrepreneurship. It is a skill that is greatly underrated in the 21st century business world. It is not about MBA post-graduate schools, it is about a trait, it’s a genetic make-up. Knowledge makes you develop it, but if you do not have it, you can’t be taught.
Managerial skills can be taught, entrepreneurship skill is a genetic discovery, entrepreneurs are like eagles, they see farther than all birds, they are like lions; they are bolder than all animals. With entrepreneurship skills understanding money and revenue serves you and the growth of the company is justified.
The specifics are what a wise start-up should sought for, and money and revenue will continue to make the company always healthy. PDP’s government needs to be systematic about creating a conducive environment for entrepreneurs to succeed. With 200 naira to $1 exchange rate, 24% borrowing rate, less than 2hrs power supply, businesses will struggle. Many bottlenecks are making entrepreneurs to struggle. The monetary policies the government is adopting is dragging businesses down. Unemployment is this high because more jobs are not created, entrepreneurs are still the engine of driving the economy forward.
The 2015 budget is anti-economic growth, business growth was not factored into the budget’s equation. How do the we spend hugely on recurrent expenditure and less on capital expenditure? It is a fact that what makes business grow is economic development which is infrastructure development. Businesses grow faster when infrastructure development is the centrepiece of government’s policy.
Nigerian’s economy needs reforms that factor in entrepreneurs as the main catalyst of growth and prosperity. In 1978 China started her economic reforms through a man called Deng Xiaoping. Today China’s economy is the second largest in the world based on export, GDP and industrialization. China’s economy grew at 10.7% in the 80s, 9.7% in the 90s and 7-8% in the 21st century. Interest rate in China is 5.6% while in Nigeria it is 24-30%. It is just common sense that business owners in China will grow faster than Nigeria. When entrepreneurs can’t get money it distorts creativity, it reduces business inventions. Could Steve Jobs achieved that big if he was in Nigeria? Some have argued that Dangote is doing well. How many young people can find their ways to the corridors of power? What the economy is breeding is crony capitalism which is not good for innovation.
The economy should be created in a way that more entrepreneurs will be creative, that is how jobs are created. YOUWIN! programme of the government is not enough because it can only benefit a few. How many entrepreneurs can YOUWIN! cater for? The government has to quickly focus their energy on using both fiscal and monetary policy to create a conducive environment for economic growth. Nigeria’s economy can be great if we focus on job creation by using entrepreneurs to be the engine of our economic growth.
•Oyebanji, Publisher/motivational speaker, wrote from Lagos. E-mail:[email protected]