The International Finance Corporation has assessed 84 per cent of small and medium-sized enterprises (SMEs) are being financially under served in Nigeria.
With the growing popularity of angel investors – individuals or groups who offer capital in exchange for ownership equity – and online crowdfunding, there are signs this is starting to change, although 30 per cent of Nigerian enterprise owners still the lack of funds as one of their primary business challenges.
Beyond funding, Sage have reported SMEs are facing problems marketing and building their customer base, especially online, which most business owners believe to be too costly or complex an endeavour.
In response to this gross underfunding of small businesses, government initiatives have been introduced to ease SME access to credit in the form of automated registration, as well as relaxed immigration processes to facilitate hiring skilled personnel – another key challenge for Nigerian businesses.
Further, some of the country’s most prominent banks have begun offering educational programmes, such as Diamond’s “Business Clinic”, giving free advice to any SMEs that enrol in the training, while offering investment opportunities and grants to the more promising ideas.
Yet, these initiatives are having a slower effect than hoped, with many other issues still preventing SMEs from maximising their growth; from damaged roads impacting transport of goods, to poor distribution of education preventing owners from learning of the latest government initiatives and training.
Thus, while it is incumbent upon the government and banks to do more to assist Nigeria’s business owners, there is more the SMEs can be doing to improve their own business strategies.
With many small businesses failing to take advantage of online opportunities, few are aware how easy it has become to use the internet as a tool to market goods and services, build a brand and client base, and directly engage with customers.
Blogs, podcasts and web magazines offer free information on anything from business news and strategies to the latest technology and tools available for optimising websites and marketing via social media.
While building a website from scratch can be a challenge for even skilled developers, VConnect allows businesses from Nigeria and Ghana to quickly generate connections online, manage their online presence, and even build a website using their intuitive creation suite.
In addition, SMEs can take advantage of free AI software, like Facebook’s Insights, to keep track of what content users are engaging with, allowing them to personalise their marketing campaigns, as well as using guides to ensure their website is optimised for search engines, making it easier for customers to find them online.
Establishing a business online will also allow SMEs to avoid some of the country’s infrastructural problems, as engaging with customers via social media content and blog posts is not only more instantaneous than physical travel, but serves to improve customer loyalty.
With loyal customers 67 per cent more likely to use a business’ goods and services than a first-time buyer, going online will not only help SMEs overcome their marketing, brand awareness and customer base problems, but will improve their financial circumstances, too.