HOW TO GROW SMALL-SCALE BUSINESSES

Culled from the punch, Tuesday, October 7, 2008, page 4.

It is true that doing business in Nigeria can sometimes be frustrating. The situation is not help by pervasive decay of supporting infrastructure. This reality puts a lot of pressure on small businesses.
But experts say that no matter how harsh an environment may be, an entrepreneur can scale the hurdle if he adheres to certain rules.
They also say that how fast a business grows depends on the vision of the owner(s). A management consultancy, Mr. Cajetan Chukwuma, says that every businessman must know that the world is a global village and that businesses are competing across borders. According to him, size is not always an issue, noting that a business that starts small can become big if the owners have the right vision.
All one needs, according to him is environmental scanning, which involves identifying the opportunities in one’s business environment and the use of the relevant tools to access them. He explains that for anyone to succeed in his chosen business, he must be sure that a market exists and that he is the right sector at the right time.
He advices that for a business to grow, the owner must leverage on proven strategies, which include the use of internet, imbibing networking, moving to the international scale, developing a value chain and utilizing a franchise. On the benefit of using the internet, he says. ‘’ The use of internet allows small businesses to establish effective inter-business collaboration and also achieve global competitiveness since all site on the internet are equal.’’
Chukwuma also explains that imbibing networking allows small firms to establish formal and informal cooperation. He says, ‘’ Networking with research centres, local institutions and others provides external support at different stages of the business.’’ On the application for franchise to expand a business, he says it is a symbolic relationship between two businesses with specific roles, responsibilities and reciprocal obligations. From the franchise’s perspective, he explains that it enhances expansion rate through lower capital and staff requirements that are needed for growth through operating in branches. Commenting further, Chukwuma adds that franchising also aids in improving market penetration and reduces risks.
He says ‘’For the franchisee, it opens new business opportunities, creates access to well-established production systems and procedures; provide expert services and opens new markets.’’ He also says that developing a value chain through consumers and supplies help every business. This, he notes, is done with the objective of maximizing revenue and profitability by accessing higher value market and creating an environment that drives higher quality.
Experts also assert that in order to grow a business, particularly in Nigeria, the owner must take a comprehensive view and scan the environment through the use of SWOT analysis. This, they opine will help entrepreneurs understand the peculiarities of the environment and the ways to operate optimally.
The managing Director, Global Access Consult, Mr Ismaila Yusuf, says that SWOT, an acronym for STRENGHTS, WEAKNESSES, OPPORTUNITIES and THREATS, is a strategic planning model that is used to evaluate and specify the objective of the business. Yusuf adds that internal analysis examines the capabilities of the firm’ internal environment, which is done by looking at the organization’s strength ( the core competence of the business) and the weakness ( a limiting factor that can inhibit growth).
Yusuf explains further that the external analysis helps a firm to identify the factors that pose opportunities ( importance business areas that have not been explored) and those that pose threats ( obstacles that could make a business lose focus). He says that a business that intends to compete favourably with others in the same industry must be ready for continuous innovation and acquisition of knowledge. According to him, an important point in growing a business is that the owner of a business must show adaptive thinking by embracing change. This way the turnaround period is shorter and the business booms.

ESSENTIAL TIPS

· Use the internet extensively.
· Get a franchise.
· Be focused.
· Embrace change.