RESTRUCTURING AND RESTRATEGISING for SMEs
On 20th September I was at the Small and Medium Enterprises Conference, hosted by the Enterprise Development Centre of the Pan African University, which event took place at the Main hall of the MUSON Centre. It wasn’t like I could pay my way through for the N10, 000 per head attendance fee (it coincided with a time I was trying to settle bills for the Clay Wall Limited, my one year old office in VGC. I got into the venue out of goodwill, really, and I must have enjoyed it more than those who paid-the event saw me scribbling on the provided notes like my life depended on it! At that point, I guess that was what it was. And in an accidental way, I got invited to the Conference by an in-law with whom I had shared how I was restructuring the business (The Clay Wall Limited). The seminar seemed to key into my state of mind at the point, as my interest peaked at the similarity of themes-in my personal email with this friend, and in the topic of the conference.
There were presentations and Q and A sessions that helped us entrepreneurs gain deep insight into the workings and mind-set of major business players. We were about 500 entrepreneurs present, all eager to hear from the distinguished panel answers to questions about how they grew their businesses to become major leaders in their fields of specialization; revenue generation to help brand and position the Small enterprise; effective causes of failure/success in business etc.
The first idea that struck me was that of Business Location and ownership of the Business Location by the Entrepreneur. That got me drifting on the persistent idea coming to my struggling business of relocating to Eastern Nigeria, where my family owns substantial properties that are uninhabited. I was at that point of decision in the business where I was wondering whether to continue in the Business or look for paid employment in some gallery.
One of the discussants, Tokunbo Talabi , CEO of Superflux International Limited, a manufacturing company that has grown from a two-man team to become an employer of over 250 staff, spoke about three major ideas that affect doing business anywhere-Strategy, Structure, and Culture. Being the Art man, my ears pricked at the very word ‘Culture’, and about local paradigms that have eaten into our society, and inhibited growth of enterprise in Nigeria. An entrepreneur should always go beyond negative paradigms that are propagated in the actions and activities of people in his locality; and have an international mind and appreciation of best-practise as eschewed in more successful economies.
Questions about expansion and partnerships were asked, but there was a general idea that such partnerships must be entered into with great caution; and best with contemporaries with like aspirations. Expansion which involves others is good for the business. Since there is a dearth of well-trained staff in Nigeria, one has noticed how many local companies and key multinational companies spend heavy resources in training staff. Tony Elumelu, Chairman of Heirs Holdings Limited, illustrated how he continually trained staff, and stood in on the appointment of staff for a conglomerate like UBA (when he was CEO). He asserted that it was necessary, and gave him opportunity to share the aspirations and dreams that made the brand a success.
On an aside, the answer came to me about brand identification and questions arose about brand growth. The entrepreneur should articulate his vision, mission and core values from the onset. The brand for the Creative person is himself, and when the brand survives on the good name accrued over the years, it behoves one to only do his work well. I have, on occasion, given myself the caveat that ‘this was the best that one could have done at the moment, in their peculiar circumstances’.
For one of the speakers, Finance is everything. This pregnant phrase was explained out to the eager entrepreneurs who sat and looked on with glazed eyes and open mouths- there seemed an uneasy silence from the awestruck audience. The speakers all had fantastic resumes, and some of them paid tribute to the impact their alumni, Pan African University, had on their businesses. The event was not only about garnering accolades for themselves (which came aplenty) it was a way keeping a commitment to supporting its MBA and EDC students in growing their businesses and opening meeting points with key players in the business world for networking and marketing possibilities. There was a shared familiarity with the speakers as members of the audience would occasionally hint at more than a formal knowledge of the antecedents of some of the speakers whom they questioned. One such question came from a man who seemed to have worked in a business, who wanted to get answers as to how Tony Elumelu lured some key players to join in his vision of growing UBA into a multinational banking institution. He wanted answers as to how Mr Elumelu got the best staff to become part of his team. Tony Elumelu mentioned how he continually met with staff, eliminating that servant-master relationship that is common in other businesses; and kept on indoctrinating staff (the Boss is a preacher of sorts)
The Creative must be a great socialite, who will embrace people through and in his work; who works ‘inside’ his passion. The very word ‘passion’ was personified by Clare Omatseye, keynote speaker and Managing Director of JNC International Limited, whose company provides high quality medical facilities. ‘Passion is the starting point’, insisted Mrs Omatseye, and this must be supported by a great customer care.
An interesting idea, which was challenged by some of the speakers, was the paradigm that states that ‘the customer is always right’. They explained that, away from the customer, the entrepreneur must realise that the company’s staff are ‘golden’, as they are the ones who push the dream forward, who share the dream with the entrepreneur; allowing for more moments of relaxation by the business owner.
What is the reason for being in business (buzzness)-to add value, to cater for the changing needs of insatiable consumers in every society? And yes, it is good to ‘be hungry’. Listening to the audio book The 49th Law of Power by Robert Greene, one can easily understand how the aching hunger in the hearts of entrepreneurs has driven growth, created innovations, and pushed inspiration a notch higher at all times. Hunger is an essential element for the Fearless Spirit, a need to succeed beyond his present circumstances, the ability to work out on a deal, if the entrepreneur finds it unsuitable for his vision.
Discipline is key, and one must always remember to suspend gratification, to pay self last. Peter Bamkole, Director of EDC and moderator of the conversations with Tunde Titilayo, and Tony Elumelu, led the conversations and clarified some questions from the audience. He continually pointed the conversations in relevant directions, and spoke of plans for creating a funding scheme that would not use the prevailing paradigms to lend to small businesses. He spoke from a background of interacting with entrepreneurs in the classroom for almost a decade(EDC will be 10years old in a few months’ time) There was a general understanding that no genuine business could survive if it needs to pay the requisite 30% interest to a bank. The entrepreneur was advised to look inwards for funding-to friends and family who already have one’s interest at heart.
Location is an important aspect to be considered as a business should have auxiliary businesses that could support the business; and there should be market within easCreating an identifiable, outstanding niche will go a long way also, while the entrepreneur must keep developing capacity. He must move in the relevant circle of his business contemporaries, join and participate actively in professional bodies and at events where his business and the competition are showcased.
The understanding of Location and its importance in doing business has metamorphosed with the growth of the world-wide web. This key element in present times has also altered the meaning of personal identities and boundaries; cultures and recent neo-global ethnicities.
The entrepreneur must identify the key success factors in his chosen business, find his niche, and be willing to engage the competition when called upon. This can only happen from a sense of best practises, and by a fearless spirit. These interactions, as at every other forum, one must take to advertise and promote the business. Think deeply about your competition.
One of the speakers, Tim Akano, who runs the a first class, top-ranked I.T. company called New Horizons, offered free online I.T to participants. Like the other speakers, his C.V. ran long, showing an apprenticeship in many multinational companies.
This theme hit the heart of the challenges facing most of the audience-SME Funding-POSITIONING BUSINESS FOR INVESTORS and covered by David Nwankwo, MD/CEO Leasing Company of Nigeria. He spoke about angel funds and the challenges facing SMES. He discussed how the fear of loss of control stops many SMEs from borrowing from the capital market. There is also a fear of disclosure of company secrets. Although leasing is a solid way of funding, the unclear regulatory environment and lack of efficient legislative to back leasing are strong hindrances. The huge operating costs of running SMEs cause a lot of failure amongst upstart SMEs. Borrowing from non-banking institutions is rampant.
Mr Nwankwo asserts that there are huge opportunities for SMEs that choose to be more competitive. The future is bright as funds from various places are coming for SMEs. To access these funds, SMEs must show a business track outlining the strengths and weaknesses of the business. To make the business more attractive to investors (the speakers generally alluded to the Business as a beautiful Bride), the entrepreneur must show that there is a growing demand for the product. For instance, I have noticed that, with the proliferation of cameras has come a growing need for better composed portraits. Photography and Art must move beyond the ‘point and shoot’, quick fix products, must preoccupy it with deep thinking, and planned work. In a wonderful way also, the demand for such work outweighs the supply in the open market. Many of my fellow Creatives (professionally trained artists) prefer the fast, old-school gestures for expressing themselves, and cling on to a dying culture when it comes to Portraiture, as if, for instance, that the advancements made in Photography never happened. In starting my business, I intended to build a watering hole-a meeting point for Creatives (artists and writers who graduated from Nsukka); to allow for internships and short periods of industrial training for students. I want to grow a team of like-minded thinkers who can then be engaged to work with me in my studio.
To underline aspects of the SME that a potential investor may be interested in, let’s follow these outlines:
1. Outline: The entrepreneur must show the magnitude of his vision;
2. Money: Show where the money is, how the money will flow into the business;
3. Share: Be ready to share ideas, resources etc;
4. Profitability: what is in it for the investor?
5. The entrepreneur must have a good market understanding, and invest in Communication and Branding;
6. Goodwill: what does the entrepreneur own (have to offer);
7. Put together pictures, referrals and other relevant material that show the approval ratings for the business;
8. Innovation: how scalable is the idea;
This entire gist drew the opposite thinking idea- what if the investor does not get attracted to the business? Somehow, throughout the session, this question had been answered in varying forms by the speakers, because summarily, all the questions asked by the audience were motivated by that question. The speakers had narrated their formulas for success- hard work, passion, self-development and knowledge of one’s chosen field, resilience, discipline, building the right team that will sustain and replicate the brand’s dream, and so on. The entrepreneur needs to know how to bring a distinctive flavour to his brand, and be willing to outsource. He must deal with mental laziness, and demonstrate cash flow and commercial viability of his business.
These and many more ideas spun in my head as I enjoyed all the sharing of experience and goodwill; encouragement and intelligent questions. In fact, Mr Tony Elumelu so enjoyed answering questions from the audience (at some point he wondered aloud whether the session was being recorded: he saw the whole experience as very educative- an opportunity generate useful material for mentoring) that he had to be stopped by Peter Bamkole.
The Pan- African vision of Tony Elumelu was inspired by an understanding of the power of economic transactions in integrating political geographies, as business is really about the movement of goods, and people. Since retiring as CEO of United Bank for Africa, Tony Elumelu has moved on into philanthropy, and also established the Tony Elumelu Foundation for this purpose. The Foundation, for him, is an opportunity to mentor, to build strong teams, and to encourage upstarts. He recently created a twitter account (@TE_Foundation) which he takes seriously, receiving and answering questions from people, and sharing his life ideals.
Business is a journey to be taken one step at a time. Before giving up, the entrepreneur should give a 5 year gestation period and create a rolling development plan. He must build structures, stay low-profile (financial discipline), and evaluate his location. to give access to funding for SMEs, Peter Bamkole announced that the EDC had plans to roll out an Enterprise Development Fund, an idea mooted by Tunde Titilayo, who also went on to promise donating the bulk sum for jump-starting the Fund.
Business combinations help in many ways, in helping one to align with the best interests. In planning, the entrepreneur must break his vision down into stages, and put a timeline to achieving these goals. Many private businesses have virtually disappeared with the death of the charismatic initiator, the owner. To forestall this, Mr Elumelu puts premium on creating a strong working team; bonding with staff, with an understanding that Success, to a large extent, depends on the team; and finally-mentoring for succession. At crucial times and points of decision-making, the entrepreneur must see these 5 elements as key-Customers, Investors, Staff, Regulators, Self. He should see how self only is a one-fifth of the whole process of decision-making, and be magnanimous enough to consider how the other four elements will be affected by the decision.
I wanted to share the lessons learnt with fellow sojourners who trod the wavy creative path, seeking to carve a niche in the major discourse of today, to earn a living, to professionalise their creative practise without becoming merely commercial, populist; to those who, due to unforeseen circumstances could not be in the MUSON to hear the things I heard. I also deemed it necessary to do a sketchy reportage, to, particularly, my friend and brother Fabian, whose idea it was that got me to the event. Thanks to my friend at the door who let me in; and the unknown bike man who is an important part of my days in Lagos, helping me meeting deadlines. I am still in one piece to write this.
Anthony Nsofor, Studio Master, THE CLAY WALL LIMITED, SUITE C228, IKOTA SHOPPING COMPLEX, VGC, LAGOS. Email: anthony.nsofor@yahoo. com
RESTRUCTURING AND RESTRATEGISING for SMEs