• Monday, July 22, 2024
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BusinessDay

Entrepreneurs say rising input costs is stifling businesses

Cry havoc and “Buga” dancing at the UN (Grime, ruin & remnants) (1)

Entrepreneurs in Nigeria have said that the continuous spike in prices of critical inputs is making it increasingly difficult for them to survive even as there is no end in sight.

From the impact of Covid-19 that forced many to shut down, to the Russia-Ukraine war, and FX scarcity, Nigerian entrepreneurs have continued to face numerous challenges.

To gauge the impact, BusinessDay interviewed some of the entrepreneurs, and below are their responses:

Chiamaka Eliogu

Eliogu is the founder of Derekmano Luxury Brand – a manufacturer of handmade leather shoes, belts, wallets and bags.

How are you coping with the rising input prices?

It’s draining, if I must say. But I try to keep a positive mindset as the day goes by. I also produce in bulk to maintain a balance.

Are you making more money compared to before?

Not really. But if there’s one thing, I always show up regardless because I didn’t come this far to give up on a brand I birthed from Passion.

Are customers buying your products?

Yes, they are. However, the business hasn’t been so stable due to the economic situation of the country. We’re also exploring other marketing options.

How is the worsening power supply affecting your cost of production?

Before May 2022, this has been a major challenge for me in business. Thankfully, I now use a prepaid meter which has helped to subsidize the cost. I run my generator when there’s no power supply.

What strategy did you adopt as a business to survive the COVID-19 pandemic?

I diversified into selling online training. I also run fumigation and cleaning company on the side so I focused more on disinfecting homes, hospitals and offices.

Is the business environment improving?

In all honesty, it isn’t. I believe it can be better if we have a working system.

Ayooluwa Moyinoluwa

Moyinoluwa is the founder of Korrey Leathers – an online brand that produces footwear for young men and women, located in Abeokuta, Ogun state.

How are you coping with the rising input prices?

The daily hike in price can be very discouraging for everyone, but as a business owner, one strategy I use is that I take all my orders at once and buy my materials in bulk, and I also make sure that I buy just the materials needed for production.

Are you making more money compared to before?

To be honest No! I just appreciate the few orders I get and try my best to deliver quality to my customers.

Are customers buying your products?

Yes, customers are buying my product but due to the inflation rate, sales have not been encouraging.

How is the worsening power supply affecting your cost of production?

The poor power supply has made production slow and most times I just power my machines with the use of a generator.

What strategy did you adopt as a business to survive the covid-19 pandemic?

I will say budgeting has helped me plan my expenses as a business owner and the effective use of technology.

Is the Nigerian business environment improving?

It has improved to an extent because almost everyone is trying to create an opportunity from what they know how to do best which is very good. But to be sincere, the current situation of the country is not giving the urge to do more.

Arinola Okeowo

Arinola Okeowo, chief executive officer at Ultra Farms

How are you coping with the rising input cost?

The hike has been really crazy but we have to keep developing means to cut costs by doing joint farming or conjoined farming. For example, it is more cost efficient for a tractor to clear an acre as compared to just two plots. This way, we incur costs as a group at stated discounts which we wouldn’t have had access to individually.

Are you making more money compared to before?

No, we are not. There has been a 300 percent increase in the cost of fertilizers, especially due to the Russia-Ukraine war. Also, there has been a hike in the price of farm inputs like seeds stemming from the weak strength the Naira wields against the Dollar in the exchange market. Currently fertilizer, NPK and urea are scarce asides being expensive.

How is the worsening power supply affecting your cost of production?

Not encouraging at all. I think every business owner in Nigeria is facing this particular problem. Especially for those of us that deal in perishable and processed foods. About two months ago, I lost over 15kg of strawberries due to epileptic power supply and I had to stop stocking them even though customers won’t stop asking. Production is currently double the normal cost all thanks to poor power supply.

What strategy did you adopt to survive the COVID-19 pandemic?

If there was one thing that the pandemic has taught us, it is to adapt to situations and make the most of them. We adopted going digital and we didn’t regret it. Cheers to making lemonade out of lemons.

Is the business environment improving?

From a personal point of view, I’ll say yes even though not at the expected pace with the main setbacks being government policies, the lack of basic amenities, poor access to loan facilities and inadequate funding.

Are people buying your products?

Well, regardless of the price increase, people need food to survive so yes, we make sales because food is a necessity.