Small and medium-scale enterprises are projected to contribute 49.5% to Nigeria’s GDP in 2024, which is an indication that Nigerian SMEs are in for another impactful year. In 2023, the sector performed incredibly well, as it contributed 45% to the Gross Domestic Product of the country.
That SMEs are the major drivers of economic growth cannot be overstated. However, in developing economies like Nigeria, there remain several clogs in the wheel of growth for players in this sector.
While they battle the perennial challenges, experts have observed that most small-sized business owners in the country also lack strategic awareness and acumen to grow their enterprise. To help bridge this knowledge gap, and further unlock the potential of Nigerian SMEs, Seven-Up Bottling Company, in partnership with Zenith Bank and United Nations Industrial Development Organization (UNIDO), recently organised a two-day Scale-Up Bootcamp for budding business owners. The bootcamp, themed “Dream big, Scale Bigger”, was aimed at providing SMEs with practical strategies for scaling.
After years with multinational companies growing brands across Asia, the Managing Director Seven-Up Bottling Company, Ziad Maalouf, came to Nigeria, and has spent the last 17 years with the company. He was one of the facilitators at the bootcamp held in Lagos, during which 40 CEOs of small-sized businesses, across different industries, had the rare opportunity of learning from his expertise.
SEMs currently employ 90% of the country’s labour force, and according to Maalouf, have immense potential for more. “Scale-Up Bootcamp 1.0 is aimed at giving back to the economy in a way that has an impact. If we empower all the SMEs present here to scale up and grow to become billion-dollar enterprises, within ten years, they will create more employment opportunities for millions of Nigerians,” he said.
In his corporate growth strategy session, he outlined ten scaling tips for SMEs: “Companies that must grow must pay attention to these 10 things: the big idea, passion, cash, value, teamwork, strong business acumen, purpose, network, artificial intelligence and business transformation advice,” he said.
Drawing from his decades of experience, Maalouf said not all business ideas will scale up. According to him, ideas with the potential for scaling are those with a blend of experience, passion, and value that meets global needs. “Matching these three gives you a sweet spot,” he said. “If your business doesn’t tick the three boxes, I’m afraid, you need a rethink. You might just be in the wrong business.”
He also warned businesses priming for growth of pitfalls to avoid and traits to imbibe. “As entrepreneurs, it is normal to want to get involved in everything, but it’s a pitfall you must avoid. Spend more time on ideas to grow the business rather than stalling the growth by trying to micromanage. Learn to delegate tasks. When recruiting, scout for talents and skills you lack, don’t employ people like you.
“Do your best to network. Your business won’t scale up until you elevate your relationships. Understand the difference between cash flow and profit. Never spend from your cash flow. It is the oxygen of your business. Lose it and you are gone. Also, alway be on the lookout for technology that improves your business. This is crucial to scaling in today’s market,” he said.
In his finance strategy session, GDM Head of Retail Banking at Zenith Bank, Lanre Oladimeji, highlighted the different offerings of the bank, which are suitable for SME scaling. He listed tips on how businesses can boost their chances of accessing loans from financial institutions. According to him, business owners need to be conversant with the five Cs of credit and know that character is key to accessing loans. He said “SMEs must have a business continuity and succession plan and know the type of funding available to businesses in their sector.” He further explained that to access loans, “an applicant needs to help the banker understand the business and explore the options they provide to support the business. Make every effort to service existing loan obligations. If loans go bad, stick with your bank and work out a remediation plan. In this digital era, there is no running away when a loan goes bad,” he said.
Speaking at the bootcamp, the National Director, UNIDO, Oluyomi Banjo, stressed that the difference between developed and developing economies is innovation. Banjo emphasised that UNIDO is committed to advancing Sustainable Development Goal Number 9, with Nigerian startups, through the GCPI programme. “The Global Cleantech Innovation Programme is a Global Environment Facility and UNIDO programme that supports entrepreneurs with innovative ideas to transform their cleantech start-ups and SMEs into investment-ready, market-ready, and scalable ventures. Nigeria is one of the selected nations for driving this programme in Africa, ” Banjo siad.
He disclosed that funding and global exposure opportunities are available on the UNIDO platform, and called on participants, who own waste recycling businesses, to take advantage of the GCIP, to access business support for scale-up.
Advising entrepreneurs in her people management session, Founder, Thrive HR Nigeria, Adeshola Aliogo, said entrepreneurs should set their value standards, then find workers with the same level of enthusiasm and who understand how everything they do ties to the growth of the business. “The cost of not hiring right is more,” she stressed. Aliogo added that entrepreneurs should set their business volume, recruit employees with shared values and endeavour that employees find MAGIC – Meaning, Autonomy, Growth, Impact, and Connection in the business.
Former Chief Executive Officer, the Federal Competition and Consumer Protection Agency, Babatunde Irukera, charged entrepreneurs on strict adherence to industry regulations if they want to scale their businesses. Irukera noted that while regulation is an existential threat to businesses worldwide, it also ensures that innovation is rewarded. “Several businesses have been killed by regulatory issues globally. This is why it is important to understand the regulatory scope within your business space. Without regulation, SMEs won’t have a level playing field to survive and scale. Regulation secures everyone. Your businesses won’t grow if there is no regulator to check competition. It is important to keep everyone accountable to certain standards,” he said.
The bootcamp was a platform for business owners in attendance to learn, network and leverage global expansion opportunities and funding. With a projected contribution of 45.9% to the GDP in 2024, empowerment workshops like this for SMEs, could go a long way in actualising national economic targets and overall growth of the Nigerian economy.
