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Why the Biggest Challenge Start-ups Face is not Access to Funding -Emmanuel Otori



The Five Customer Types In Nigeria And How To Sell To Them - Emmanuel Otori

Author: Emmanuel Otori

According to a report published by the World Bank, it was observed that while Small and Medium Enterprises (SMEs) create 7 out of 10 jobs in emerging markets, access to finance has remained a key constraint to SME growth. The Report noted that access to finance is one of the most cited obstacles facing SMEs to grow their businesses in emerging markets and developing countries.

While access to funding is a challenge for most SMEs across the world and especially in Nigeria, ability to create jobs to support the ongoing efforts of the Federal Government of Nigeria has become a significant priority as several financial interventions such as the Anchors Borrowers Programme, TraderMoni, Survival fund, AGSMEIS initiative, the creative industry fund etc. seeks to drive economic development by directly impacting SMEs in order to create jobs.

A question of whether the interventions provided has been properly utilized has also been a major concern to the Central Bank of Nigeria as there has been a high level of defaulting in the ability of these SMEs to make repayment for the loans as well as a discovery of misappropriation of funds.

The challenges SMEs face are hinged on different factors and access to finance is one of them, however without fixing some other challenges that are cardinal to the success of a business, access to funding would make no difference in the operations of such businesses.

Some of the key factors that hinder the growth of SMEs aside access to finance are:

  1. Lack of Good Financial Records

One of the reasons for the failure of SMEs is lack of keeping proper financial records. Inability to understand whether a business is making profit or running at a loss is an assumption that owners of SMEs indulge in, thinking that as long as there is cash-flow, the business can survive. While cash-flow ensures that a business keeps running, survival does not in any way equate growth as growth comes from the profitability in order to expand, offer additional lines of product or services or hire extra team members.

Keeping financing records does not have to be rigorous. It simply has to be what forms the cost of running the business (expenditure) and what are the sources of revenue (income). Income has to be higher than expenditure in order to be profitable in business while still serving the client with quality value.

There are several tools in place to ease the keeping of good financial records e.g. Quickbooks and Sage 50. These tools can help even managers without accounting background to track their finances.


  1. Lack of Standard Operating Procedures (SOP)

Due to the lack of jobs for the teeming population, entrepreneurship becomes the best chance for most recent graduates and those in the informal sector, therefore leading to the emergence of accidental entrepreneurs. These sets of entrepreneurs lack the basic skills to compete globally with their counterparts as there are many gaps such as lack of adequate training to establish and manage a business. Standard Operating Procedures are a set of instructions that help to create structure on how a business is operated by the team, this helps to create cohesion and organization in the day to day activities of the business. SMEs usually run on impulse either due to ignorance or inability to hire an expert to create an SOP, leading to haphazardly running the organization in a fire-brigade approach, making deadlines almost impossible to reach and satisfying customers becomes a mirage.


  1. Inability To Leveraging on Social Capital

Social capital refers to the ability to leverage on key relationships with different stakeholders that are pivotal in running a business. This form of capital applies to the supplier of the raw materials required for production, to support the receipt of input at a reasonable price or provision of the materials on credit. Relationships with family, friends, associates and belonging to circles of social clubs can be the beginning of securing customers whose patronage would help secure capital for takeoff.


  1. Inability To Create Visibility Online

Creating social media handles on Face, Twitter, Instagram, LinkedIn and other channels as well as having a website are necessary for a business to become visible to its target market. SMEs are limited in customer acquisition as their dependence is only on customers that can access their physical location. Being able to gain visibility to markets outside the environment of operation will serve as a very competitive edge and also ensure they gain immense visibility online therefore increasing their overall efforts in acquiring customers and continuous cash-flow.

When these factors are properly tailored to support the growth of a business, having access to capital might not necessarily be a major challenge as reported by SMEs as a buffer of opportunity to benefit from the market has already been created as a result of putting the following constants in place.

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The Five Customer Types In Nigeria And How To Sell To Them -Emmanuel Otori



The Five Customer Types In Nigeria And How To Sell To Them - Emmanuel Otori

Author: Emmanuel Otori

The lifeline of every business is enmeshed in the number and interactions of stakeholders as well as their activities in relation to the business. These stakeholders include the suppliers of the raw materials needed for the business to manufacture its offerings, the employees or human resources who engage in the production and the customers who are the end users and the most important stakeholder in the cycle.

 The Customer

Customers are consumers or users who products or services are made for in order to satisfy their needs with a series of unique experience. The customer in-turn has a unique role to play as their consistent purchase makes them to become the most important stakeholder in a business.

The major reason businesses collapse is for lack of customers as customers generate cash-flow for the business whenever they make purchases therefore contributing to increasing the sustainability of the business to remain afloat.

The uniqueness of the customer does not trivialize the role of the supplier and employee but then without the customer, the aim of building a business without an end user is defeated.

The Nigerian market is characterized with different categories of customers and ability to understand the type of customers a business attracts through their purchasing behaviour and data driven approach will support the growth of a business as they will understand how to position their offerings in order to attract the specific customer segment they want and also secure a reasonable market share through intentional strategies

 Here are the five customer types and what we need to know about their personality traits in order to sell to them

 Innovators (2.5%)

Innovators are the type of customers whose buying decisions are risk driven. Innovators are the youngest in age and willing to experiment upon seeing a product or service they desire to use. The personality trait of innovators is that they are impulse buyers, their need for adopting a new product has no regards with respect to whether they have budgeted for it or not. Because they are risk takers, they easily adopt new technological solutions and while they can easily help brands to get exposure by putting these products in the presence of other potential users, they might lose their financial resources if such solutions fail based on some limitations. The Innovators account for only 2.5% of purchases made.


Early Adopters (13.5%)

These categories of customers are the second set of individuals to adopt an innovation after the Innovators, they are called the Early Adopters and they account for only 13.5% of purchases made.

The Early adopters are also very young in age just like the Innovators and have a high social status and reasonable disposable income. They are opinionated and can be regarded as thought leaders. Because Early Adopters are judicious in their choice of adoption, they can easily maintain a central communication position, especially in giving reviews.


Early Majority (34%)

The Early major only adopt new solutions when a degree of time has passed after the launch of the solution into the marketplace. The time taken before they adopt any solution is usually longer than those of the Adopters and Innovators. They usually tend to be slower when it comes to the adoption of a solution and only belong to the above average income class, however their contact with Early Adopters eventually informs their decisions about eventual purchases. They also rarely hold an opinion which is a direct opposite of what the Early Adopters do. They account for 34% of all purchases.


Late Majority (34%)

The Late Majority only adopt any form of innovation after the average in the society has done that. Their approach of innovation is with a high degree of skepticism. They are far from being risk takers as they are low on disposable income and want to avoid mistakes when making purchases since their income is limited. They are also characterized with very little financial education, are in contact with those in the Early majority and their peers, and possess not much opinion leadership. They account for 34% of all purchases just like the Early Majority.


Laggards (16%)

The laggards as the name implies are the last to adopt any form of innovation. These individuals have no respect for change as they hold on to their first generation of solutions and do not consider a change of such solution except there is a breakdown of such product or it no longer works again, only these circumstances makes them embrace change. They are traditionalists and are usually elderly, have very little disposable income, lowest financial education and are only in touch with family and friends

All customer types make their unique contributions to serve them and grow a business; their role in the value chain supports the sustainability of a business in different dimensions.

The early majority and the late majority are usually the difficult set of customers, however learning to sell to them by winning their confidence and serving them right, has the ability to increase repeat purchase as they both account for the highest percentage in overall purchases made.

Customers are never the same and understanding how to serve them uniquely in a particular market, holds the key to profitability.

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How to Validate Start-up Ideas With Design Thinking



The Five Customer Types In Nigeria And How To Sell To Them - Emmanuel Otori

Author: Emmanuel Otori 

Innovators are concerned about building a product that will have a huge impact on the lives of people by increasing the quality of living standards, addressing a pain point or an alternative that is cost effective for its consumers.

With these great thoughts comes a big question that has to be answered before launching a product or service and it is the question of “is there a market”?

The addressable market size becomes a question to answer in order to ensure that when a product is manufactured, it will find users or consumers who are willing to utilize the product based on the offer that is being given.

One of the techniques that most successful start-ups in the world has applied to ascertain whether a product will sell or not is called “Design Thinking”


Leading Change

One of the failures is the assumption that there is a market, is one that can be seen or witnessed in solutions that have been made for people. An example is the construction of an overhead bridge for pedestrians to avoid crossing the expressway. However, the humans who this provision has been made for usually ignore the bridge and use the expressway to connect to their routes, which even makes their transit riskier than the use of the overhead bridge.

Why would anywhere risk their lives to cross an expressway when there is an overhead bridge beside them?

Failure in the consideration of what would drive people to use the overhead bridge is what is lacking and why the preference for the use of the expressway.

Would these same people use the overhead bridge if there were possible factors considered before making the designs? The answer is an absolute yes. The failure in the use of the overhead bridge is driven around the fact that the normal tendencies of human behaviour were not considered before constructing the bridge.


Human Centered Design

Design thinking takes into consideration the natural tendencies of human behaviour before designing a solution. This will ensure shared responsibility from both parties such that there is already a market with reasonable demand to capture a market share than can sustain the business when eventually presented to the users. The failure of most start-up ideas is embedded in the emotional attachment that founders have to their ideas which makes it difficult for them to be open to feedback from the prospective users. However, a fact based finding should be prioritized against emotions when creating a solution.


How Design Thinking Drives Innovation

There are five stages in the design thinking process

  1. Empathize

Being able to empathize with customers most especially when it is a challenge or pain point that makes the purchasing or usage of a product or service difficult for them gives an opportunity to learn closely from them as it then creates an attitude that makes them to become difficult customers because there are bottlenecks that hinders the what they expect to be an ideal purchasing process. Customers also have a reference point of a better offering and would always voice out. Active listening to their challenges becomes a great feedback for start-ups. This stage consists of interviews in getting to know what the ideal scenario is to prospective customers.


  1. Define

Having interviewed the prospects, it then becomes necessary to begin to define what the challenges are from all the opinions gathered from several interviews conducted with stakeholders. The age group of those facing these challenges, their income level, experience, education and location becomes parameters to pay attention to.


  1. Ideate

The aim of conducting interviews and surveys by visiting the field is to be able to generate a product or service that has a fit for the market. All the feedback that has been given now needs to undergo divergent or convergent processes where divergent takes the several opinions and create solutions around them while convergent thinking helps to narrow down to the best idea. These two thought processes helps to come up with what the proposed solution to be developed would be.

  1. Prototype

Prototyping involves making a Minimum Viable Product (MVP), a minimum viable product is one that is made with the minimum resources in order to furthermore see how customers interact with the product or service in its pilot or beta phase. The feedback from the usage and engage would then help to determine whether a full product would be manufactured or not. For digital products such as web or mobile apps, tools such as Figma or Adobe XD can be used to make a prototype.

  1. Test

The testing stage helps to pick the ideas that work and move very fast to implement them. If there are impediments or bugs, then it has to be corrected. When the product passes the testing stage, a complete product category can now be created and ready to make entry into the market.


The first two stages in the process of design thinking helps to look out for evidence by carrying out Primary Market Research (PMR) to ascertain by means of qualitative and quantitative analysis the fact there are evidences to either support whether a challenge really exists or not for a solution to be created.

Founders should learn to embrace what the primary market research presents in order to avoid losing big as a result of the assumptions of what they either expect the market to be or their emotional connection to the product.

Emmanuel Otori, the writer has worked on the GEM Project of the World Bank, Conducted training for entrepreneurs and professionals at the Abuja Enterprise Agency and has over 8 years of experience of working with over 50 SMEs across Nigeria.

Author’s LinkedIn profile –

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How Superstores are Utilizing Superior Customer Experience to Increase Retention Rates and How SMEs Can Adopt Technique



The Five Customer Types In Nigeria And How To Sell To Them - Emmanuel Otori

Author: Emmanuel Otori

“A happy customer tells their friend, an unhappy customer tells the world”

One of the major challenges Small and Medium Enterprises (SMEs) are faced with is their inability to keep customers coming after the first purchase. Repeat sales from the same set of customers over time have been observed to be an underlying factor entrenched around loyalty. However customer loyalty is not developed if SMEs cannot get the customers to keep coming.

The reason why it is important to have strategies for both customer acquisition and retention is that it takes as much as 3x efforts, time and resources to acquire a new customer than to retain them. Therefore ability to manage an already existing customer helps a business to build loyalty and profitability eventually.

There are several examples to draw from how different businesses have used customer experience to boost customer retention.

A major shift in consumer’s purchasing behaviour can be seen in the emergence of superstores across Africa. There have always been supermarkets within neighbourhoods where residents make regular purchases, however their inability to create a unique experience for buyers has caused customers to visit these superstores that can create the experiences they desire.

As customers emerge, their needs begin to shift from just satisfaction of these needs to getting an experience that helps them create memories whenever they go shopping and with this evolution brings businesses to begin to think about how to capture these experiences in their offerings

Some variables that has seen the surge of customers to superstores from already existing supermarkets include


  1. Ambience

Ambience could be in the form of a serene environment with greenery or a properly lighted space where customers with their families can sit, have informal discussions and relish the memories and experiences that comes with being able to enjoy their shopping experience. An environment that creates a background for good pictures put the shoppers in a position of wanting to experiment with different scenery. These range of experiences is a major factor that would keep customers loyal to a brand.


  1. Competitive Pricing

Superstores have also learnt the ability to engage their supply chain to get competitive pricing for the bulk purchases made in order for retailers to benefit from obtaining goods at what they consider reasonable and affordable.


  1. Entertainment

Music playing in the background from loud speakers across the building of these superstores helps to also create some refreshing moments in the minds of the shoppers, which makes them loosen up as they enjoy the home made artistry of popular performing artiste and musicians.

  1. Hygiene

Shopping in an environment that considers hygiene a priority is one that customers consider for unique in terms of experience especially as the covid-19 pandemic is yet to be completely wiped out. Seeing the janitors continuously working around the environment to ensure there is cleanliness makes shoppers become confident not just in the offerings but in the conveniences.

  1. Parking Spaces

A superstore expects to get a lot of customers and there becomes a new challenge to create ease while they shop. Ease could come in the form of creating parking lots to not just accommodate their vehicles but to also guarantee the security of their assets.

Africa is a unique market and for a superstore to thrive, an understanding of the driving factors needs to be considered in order to create unique offerings.

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