Problems Associated with Micro-Businesses

Small scale businesses help the economy to grow faster because that is where a larger measure of citizen functions. The growth of small business activities influence standard of living and open doors of better economy opportunities. When the reverse is happening, How do stakeholders react? This implies that persistent decreases in small scale businesses need government speedy intervention.

Credit: Wealthresult.com

Government intervention must not be limited to finance alone as this is the case with most government agencies and ministries. The problem of micro-business is not limited to funding rather there are other factors that government should examine and profile corrective measures. Fixitsme sampling reveals that entrepreneurs need training and re-evaluation in this volatile economy.

"Hope is not a strategy".-USAF
 

The current economy has made price fixing difficult to most business owners, cost apportioning skill is poor as most micro-businesses charge base on what competitors are charging without putting all costs into consideration. Below are tips government and entrepreneur should improve on to ensure sustainability in this unstable economy:

Enabling Environment

We live in an environment where government pay lip service to basic amenities, utilities such as electricity, pipe borne water, good road, and good health services etc. Report reveals that 45% of businesses spent 25% of revenue on fuel and generator maintenance as a result of inadequate electricity supply, some spend avoidable costs which is solely because basic amenities are inadequate for example car maintenance as a result of the bad road. Government should intensify effort in project that can tackle this situation as this will save cost and increase profit on the part of business owners.Entrepreneur can review their route, outsource this function or/and get a closer market to save carriage cost.

Poor Management Knowledge

Most Nigerian entrepreneurs are autocratic and domineering, in several cases they feel too big to take advice from employees or subordinates. 72% of them do not engage in literate reading associated with their business and see no reason why they should attend workshop or seminar. Business owners who fail to understand the market trend will live in the ditch. Government should encourage trade union and association, hold periodic meeting and seminar with this association to understand their ordeals. Entrepreneurs must understand that their business network is vital to business development.

Basic Business Statistics

Most start-ups do not have strategy plan as to who, why, where, how the business should be position. Statistics data is important for planning and business decisions. This is where feasibility study comes in understand who needs your product, why is it important to them, where and when is it needed and how should i present my business to them. Government should give business statistics that will help entrepreneur for example, how much is the country spending on cosmetics? What is the foreign demand for our local product?

Lack of Adequate Financial Capital

Capital is a sine-qua-non in any business, It is amusing that 25% of startups do not know the exact amount needed to start a business, some did not recognize the cost of labour, administrative expenses, advertisement and many other cost elements. Financial institution operations should be review to help startup. Loan repayment plan, loan security, interest rate etc are on the high side and must be reviewed. Government agencies and intervention programs such as NAPEP, YouWIN!, BOI and other ministries need to be popular at the local, go to them if need be. 

Stable Government Policies, Fines and Tariffs

Business activities are controlled & sometime restrained by numerous laws enacted by the government. Fines and tariffs are no not fixed, this makes planing difficult for entrepreneur. A stable fee will help business, i hear startup complaining of different tariff from different agencies and government authority. Waiver of some of these tariff will encourage entrepreneurs.

Business Development Strategy

Over 50% of small medium enterprises see advertisement as an expense not an investment. 75% of them still embrace the tradition marketing system which is expensive compared with social marketing systems. Most employees complained that they employer do not recognise the important of training and motivation. Business development strategies should look through human resource, marketing, training and accounting of the business.

Problems associate with startups are not limited to the aforementioned. Businesses and government should carefully look into these and implement strategies that will make businesses survive.

What DO YOU think?

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