ADESHOLA JIMMY-EBOMA is the founder of Small-Scale Enterprise Lab and MBA Business Showers and a business development expert. In this interview with CHARLES OGWO explained why MSMEs fail to access funds despite a lot of funding available for entrepreneurship development in Nigeria, and numerous challenges in the landscape. Excerpts;
Tell us about the Small-Scale Enterprises Lab and MBA Business Showers and how its launch will support Nigerian MSMEs?
During the COVID -19 pandemic when the corporate businesses were experiencing a slope, I was bored at home. Then, I needed to carry pepper abroad as I would normally do but I felt there had to be another way of taking this abroad instead of the wet form because now I am staying longer than usual because of the lockdown.
I felt the need to do this differently, and that was what gave birth to FreshOla Organics. FreshOla Organics offers a sort of dehydrated sauces and pepper mixes in dry form, preserving the true African tastes and spices.
My experiences with how I was able to scale with FreshOla Organics from its first year in the market gave me the drive to initiate giving back to other aspiring entrepreneurs, especially in the area of product-based businesses, which in turn gave birth to the Small-Scale Enterprise (SSE Lab), and the Manufacturing Business Accelerator (MBA) Business Showers.
It is one of the flagship programmes under the SSE Lab. Through the MBA programme, we prepare entrepreneurs to capitalise on contemporary business trends by offering modules on digital marketing, sustainable product development, and financial management.
Despite a lot of funding available for entrepreneurship development in the country, why is it difficult for small businesses to access most of these funds?
Most SMEs find it difficult to get loans, especially from the government even when the funds are there, because they lack the know-how to obtain the loans. I will say the challenge has to do with the documentation ability of the entrepreneurs.
I’m saying this based on my experience in a programme I previewed in my sixth month of starting professional guidance, AWB with the African Women Entrepreneurs, under the US, missions in Nigeria.
Thinking back at the criteria, you have to be a well-documented business owner to even benefit from such programmes. So many SMEs don’t know the difference between registering sole proprietorship, and a limited liability company. Besides, they lack knowledge of financial documentation.
Anybody who is going to give SME a grant will want to see how the business has been doing. A business plan or marketing plan is needed to see areas where it is facing challenges and how the front wheel the entrepreneur is seeking is going to benefit the business. Maintaining proper financial records is crucial for MSMEs to demonstrate creditworthiness and attract funding.
How can Nigeria grow its entrepreneurship landscape?
For Nigeria to grow its entrepreneurship, capacity building is needed first. When you look at capacity building, it takes cognisance of the current realities. That is looking at it based on how these people can tailor their businesses to address the needs of their community or consumers.
This cuts across marketing, human resources, and digital communications, among others, it is borne out of understanding and analysing the market.
The Central Bank has maintained a double-digit Monetary Policy Rate (MPR) for some time now, what impact is the CBN’s stance having on small businesses?
The CBN’s double-digit Monetary Policy Rate is currently at 18.75 percent, and increases borrowing costs, making it harder for MSMEs to secure loans for expansion or working capital.
To navigate this challenge, MSMEs can explore alternative funding sources like angel investors or grants. Leverage government-backed low-interest schemes like NIRSAL Microfinance Bank loans, or focus on operational efficiency to reduce costs and ensure sustainability in this high-interest environment.
They can also leverage fintech platforms such as Branch, Carbon, and RenMoney, among others that provide micro-loans without collateral requirements.
Moreover, MSMEs can utilise cooperatives or peer-lending schemes to pool resources and provide members with access to credit.
With the massive brain drain in the country today, what are the three main points you recommend to increase employee commitment and retention in start-ups today?
Many Nigerians are leaving the country, especially those that are skilled. However, to retain and sustain the able hands, entrepreneurs must create a reward-based system.
In my organisation, everybody is a sales manager, aside from the employee’s salary, everybody is encouraged to sell to earn commissions. There’s no amount of financial value that you can place on people that offer creativity.
Creativity can come in customer service or in the way of sales. It can also come in the way of marketing. Entrepreneurs need to work on their reward system. If an employee sees that his/her success is tied to the business, they will take it as their own. We need to learn to work on retaining staff through our rewards system as small business owners.
Why do many businesses in Nigeria, especially SMEs, fail within the first three years?
Understanding one’s market or business space is crucial to business survival. Sometimes many people go into business without validating their business. Everything we have done starts from validating the idea and understanding our product, target market, and consumer.
As an entrepreneur, you must know the people that are going to buy your product, and what they are saying. For instance, in FreshOla Organics, I’m not just creating a product because I like the product or because I want to create a product.
I tested the product to be sure it is a solution to a problem that people are going to encounter or are encountering and that they are willing to buy.
Going through the phase of testing my product, gave me a platform to get feedback; and from the feedback I was able to tweak a few things right.
If any entrepreneur can continuously and cautiously work on his or her target market, analyse interest before he or she gets into the market, there is no way such an SME is going to die as a small business because it is giving to the customers what they want, not what the SME thinks they want.
What are the key challenges to MSMEs and how can the problems be addressed?
Most MSME operators lack adequate financial literacy, especially bookkeeping and costing. I recommend that MSME operators get themselves up-skilled by embracing training programmes.
They should partner with organisations such as NEPC and the Enterprise Development Centre (EDC) to deliver financial literacy workshops. I also encourage them to use digital tools such as QuickBooks and Wave for bookkeeping which simplifies financial management.
There are also online courses they can leverage, for instance, platforms such as Coursera and Udemy offer accessible courses tailored to MSMEs.
They also need mentorship programmes, such as those integrated into the MBA programme, which provide practical guidance and support.
What challenges have you faced exporting FreshOla Organics products to the US and Canada?
Exporting FreshOla Organics products to the US and Canada has presented significant challenges. First, navigating the complex regulatory environments in these countries has been a major hurdle. The US Food and Drug Administration (FDA) and the Canadian Food Inspection Agency (CFIA) have stringent standards for labelling, ingredients, and packaging.
For instance, ensuring compliance with FDA food labelling laws required substantial investment in research and adjustments to our production and packaging processes. Then, shipping logistics and costs concerns. Freight charges, customs duties, and delays at ports can be overwhelming, especially for a small-scale manufacturer.
Moreover, building trust in international markets is challenging. Buyers and distributors often prefer well-established brands, necessitating significant investment in marketing to gain credibility and build our brand reputation.
As a successful female entrepreneur, what message do you have for upcoming ones?
To aspiring entrepreneurs, I will say; start where you are, with what you have. Entrepreneurship requires patience, persistence, and the willingness to adapt. Challenges will arise, but with resilience and continuous learning, success is achievable.
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