Startups and SMEs in Nigeria confront a number of difficulties, which may account for some of the country’s comparatively low number of starting businesses. Expert in business models Austin Eneanya is putting forth ideas to deal with these problems. Even if the goal of these solutions is to improve the business climate, there are still some things that might prevent Nigerian startups from becoming unicorns—private enterprises valued at more than $1 billion. These are some of the reasons behind the SME’s closure but not limited to these problems:
The Problem
- Access to Finance:
Limited access to affordable funding may impede a company’s ability to scale rapidly. Unicorns often require substantial capital for aggressive expansion, product development, and market capture.
- Regulatory Challenges:
Complex and inconsistent regulatory environments can slow down the growth of startups. Unicorns often need to navigate regulatory complexities swiftly and efficiently to maintain momentum.
- Market Competition:
Fierce competition, coupled with challenges in accessing markets, can hinder a startup’s growth trajectory. Unicorns typically need to dominate or disrupt markets to achieve their valuation, which can be challenging in highly competitive environments.
- Infrastructure Issues:
Poor infrastructure can affect the operational efficiency and scalability of a company. Unicorns often require seamless logistics and infrastructure support to expand rapidly and serve a large customer base.
- Insecurity:
Security concerns can deter investors and impact business operations. For a startup to become a unicorn, it needs a stable environment that attracts both local and international investors.
- Currency Fluctuations:
Exchange rate volatility can impact the financial stability of a company, making it challenging to plan for long-term growth. Unicorns often need financial predictability to attract substantial investments.
- Limited Access to Markets:
Difficulty in reaching new markets can slow down a company’s expansion plans. Unicorns typically have a global outlook and need to access international markets to achieve unicorn status.
- Skill Set Challenges:
The lack of a skilled workforce can hinder innovation and product development. Unicorns often require top-tier talent to drive technological advancements and stay ahead of the competition.
- Cost Management:
High operating costs may strain a company’s financial resources. Unicorns need efficient cost management to sustain their rapid growth and achieve profitability.
- Business Support Services:
Limited access to mentorship and support services can impact a company’s ability to navigate challenges effectively. Unicorns often benefit from a robust support ecosystem that accelerates their growth.
To overcome these obstacles, different stakeholders must work together to build an ecosystem that promotes innovation, encourages company expansion, and draws in both foreign and local investment.
The Solution
Source: Business Survival Growth Model (BSGM) Framework
Introducing the BSGM framework to address some of the highlighted problems. The Business Survival Growth Model (BSGM) framework presented here serves as a solution to addressing some of the challenges faced by startups and SMEs in Nigeria by providing a structured approach to navigating the business landscape. The key features of the BSGM framework, as outlined in the content, contribute to helping businesses achieve “camel and the unicorn status” while emphasizing business survival above all else. Laying the foundation for future business growth hinges on the skill strength of the professional implementing either the internal or external business forces required for a firm to survive and grow. Here’s how the BSGM framework aligns with the challenges mentioned and serves as a solution:
- Survival Emphasis:
The BSGM framework recognizes survival as a critical initial goal for businesses. In the context of the challenges faced by startups and SMEs in Nigeria, where many struggle to stay afloat, the emphasis on surviving tough business conditions is crucial.
- Internal Business Forces from The BSGM framework:
The framework considers internal business forces such as corporate culture, strategy, tactics, revenue diversification, business positioning marketing and management systems. Addressing these internal factors aligns with the solutions proposed earlier, including skills development, cost management, and market support.
- External Business Forces from the BSGM framework:
External forces, like strategic partnerships, economic factors, impact of competitors, technological advancement such as AI, global talent workforce on recruitment, and stakeholder’s management, are acknowledged. This aligns with solutions related to regulatory reforms, market access, and currency stability as part of the economic forces.
- Momentum Growth:
The emphasis on momentum growth over survival aligns with the need for startups and SMEs to not only survive but also thrive in the market. This reflects the importance of scaling operations and achieving profitability.
- Innovation and Human Resources:
The role of corporate culture, strategy, and tactics in motivating employees in logistics, operations, marketing, and brand positioning to innovate addresses the challenges related to skills development and the need for a skilled workforce.
- Strategic Development and Evaluation:
The BSGM Growth Framework theory underscores the importance of developing, implementing, and evaluating various aspects of the business. This aligns with the solutions emphasizing regulatory reforms, market support, and infrastructure improvement.
- Capturing Larger Market Share:
The ultimate goal of capturing a larger market share aligns with the solutions focused on market access, competition, and strategic development.
Solution Adoption
This model has gained widespread adoption by many unicorn companies in the United States. And has helped many more achieve unparalleled growth. An extension of this model is necessary to be implemented in Nigeria. For those eager to learn more about steering their startup, organizing training, seminars or business towards achieving unicorn or camel status, Austin Eneanya offers expert consultation. Contact him at austineneanya48@gmail.com or find him on LinkedIn under the name Austin Eneanya.
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