LCCI, SMEDAN advocate financial discipline for SMEs’ survival
The Lagos Chamber of Commerce and Industry (LCCI), and Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), have urged entrepreneurs to be financially-disciplined to stay afloat in the present harsh economic times.
Indeed, the LCCI restated the need to promote conversations around continuity, sustainability, and the progress of Small and Medium Enterprises (SMEs) in the Nigerian economy, saying it has become very important in the light of the weak macroeconomic fundamentals following the adverse impact of Covid-19 on the economy and the business community.
Similarly, the Chairman Governing Board, SMEDAN, Femi Pedro, advised that for SMEs to thrive, they must reposition themselves for growth and sustainability, highlighting that the critical factors for any successful business are a set of foundational principles and fundamentals, which most businesses lack.
He said most businesses also suffer because the entrepreneur is not financially-disciplined; stressing that lack of integrity and character are also factors for failed businesses.
The President, LCCI, Mrs Toki Mabogunje, at a webinar tagged, “Repositioning Nigerian SMEs for growth and sustainability,” said SMEs account for 50 per cent of aggregate economic output and constitutes about 95 per cent of businesses in Nigeria, adding that they also account for 75 per cent of employment in the country.
In her words, “SMEs provide job opportunities, develop regional economies and communities by stimulating competition in the global market, fostering innovation and promoting economic inclusion.
“However, the performance and contributions of SMEs have been impeded as the country’s operating environment is characterized by high production cost, declining purchasing power, excessive regulations, high borrowing cost, poor trade facilitation and infrastructure.”
She said these challenges make it increasingly imperative for SMEs to survive, thrive and to compete favourably with their peers, and now made worse by the Covid-19 and its associate measures.
She added that supporting SMEs is the most strategic approach towards reflating the economy, pointing out that strategies that would help to position SMEs should be urgently developed.
Pedro described the theme as apt and timely given the economic shock of Covid-19, and the resultant shock of harsh and difficult business environment for small businesses, maintaining that every entrepreneur is feeling the impact of the recession amid the difficult business environment in the country.
“A lot of people get into business by accident, and do not have that entrepreneurial spirit in them. If you do not have that passion, you have not started. Any business you are doing you must have passion for that business,” he said.
He also emphasized that for businesses to thrive, entrepreneurs must invest in quality products and services, urging the business community to familiarize themselves with the new Company Allied Matters Act (CAMA) law to boost their businesses.
He advised that going by the present realities, entrepreneurs should not focus much on profitability, but place more emphasis on sales and cash flow to stay afloat.
“You must cut down on waste, and also be financially-disciplined, while also reducing your expenses to the barest minimum. More importantly, take advantage of every available opportunity around,” he said.
He urged entrepreneurs to take advantage of the Federal Government’s N75 billion MSME fund expected to last for the next three months, saying that most of the challenges faced by SMEs are self-inflicted.
The Chairman, Nigerian Association of Small-Scale Industrialist (NASSI), Lagos Chapter, Kuti George, charged the Federal Government to create an enabling environment for businesses to thrive, stating that many businesses are dying because of the current harsh business terrain.
He said for Nigeria to grow industrially, there is an urgent need to establish industrial parks and production centres in every state.
His counterpart at the Nigeria Association of Small and Medium Enterprises (NASME), Lagos State Chapter, Dr. Adams Adebayo, also urged a review of some policies to drive SME development in Nigeria.
He also called for strict evaluation and monitoring of incubation centres to groom youths with brilliant business ideas, to create wealth and job opportunities in the country.
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