MSMEs in Nigeria (like their counterparts in some countries) are now feeling firsthand the impact of COVID-19 coupled with the backdoor devaluation of the Naira- an aftermath of the oil price war between Russia and Saudi Arabia, that has resulted in the drop in oil prices (less than $25 per barrel, a record low since 2002). Then top that with the recent S&P’s downward credit rating of Nigeria from B to B- and it becomes quite the recipe for a bleak future for businesses in Nigeria. With the odds really stacked against the country, one would wonder how many small businesses will survive these times? Well, survival will depend on their bounce back strategy. The fact is, life for small businesses as they know it, will change. Once the white flag is up, it is survival of the fittest, you will need to think on your feet and in your sleep if you want to remain in the market.
There are 5 things small businesses need to consider in planning their bounce back strategy after the pandemic.
- Your capital-base is no longer the same so what do you do? This is an important question to consider especially for businesses that are dependent on imports. First, find out how much you need to recover and then where and how to raise it. Do you have what it takes to raise the shortfall yourself? Do you scale down the business and build organically? Business owners must make that choice now and put measures in place to get the ball rolling once it is time. It is very important to note that short term bank loans aren’t your best choice for capital (truth is they aren’t a choice at all).
- Keep your customers close and engaged. This will work well for businesses that have a customer engagement strategy in place or those that collect customer data. You do not want your customers to forget you. The customer's purchasing power has been affected too, will they be spending their hard-earned Naira on you? Remember, you do not want to be a pest. So, it’s best to put an engagement strategy in place and follow through.
- Keep your staff closer, motivated and informed. Gain their trust and discuss what the current economic situation means for your business, share strategic and concrete plans on how you intend to survive and succeed in the current economy. Never had time to send them for training because of a tight work schedule? Now is the best time to do so. Find out the best way, platform and make it work. The objective is to get them ready to run once they hear the gun! You will need every help you can afford.
- It is better to see the glass half full if you want to remain in business. Be positive about the economic outlook. Go back to the drawing board- your business plan/2020 strategy and see where and what you’d need to tweak. Margins are thinning, do you want to adjust your budget or do more to meet the existing budget? What exactly do you have to do to achieve that? Have no clue? Get a Business Coach. This is the best time to figure it out.
- Leverage technology to stay connected to your customers/clients, staff, economic news and happenings within and beyond your immediate environment. While the business may not afford expensive tech, find tech that is within your budget (thankfully technology is getting cheaper for small businesses) and make it work. Information is the power and growth lever for today’s small business.
Finally, brace yourself for the journey ahead. Technically, if you snooze, you lose.
All the best!
Akanimoh heads the SME Desk for FirstBank and is responsible for implementing its SME value propositions.
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