BUSINESS: The Nigerian SME Survival Guide – Gabriel Eka

PART 1: COOPETITION IS A MUST

Coopetition, from the words ‘Cooperate & Competition’; is the business theory that even while businesses need to compete against each other to stay profitable, they stand to gain more from cooperating and saving money on shared costs and resources before fiercely competing in other areas.

The good news for Nigerian businesses is we face mostly the same challenges, obtaining licenses is stressful, rent is always on the rise, loans are hard to come by and near impossible to repay at rates hovering around 24%, power supply is erratic and the cost of running generators is crippling many businesses, Managers are unprofessional and don’t employ best practices, this vicious cycle in turn affects potential customers and suppliers, who cut corners, delay patronage, payments, and thus further perpetuate the failing business phenomenon. Yes the playing ground is level in our common suffering. The odds are against a successful & sustainable business in Nigeria today, yet some businesses continue to thrive! The Corporate’s and multinationals have an edge over the Small and Medium Businesses (SME’s) because they’ve been doing it longer and are wiser in raising capital and using it as a weapon to ward-off competition, its time Entrepreneurs start to think like them and adopt some of their strategies for more success

Allow me to paint a vivid picture: ‘You’re in the Ikeja computer village in Lagos, searching for a Macbook laptop as you specifically need it for your specialist designs, all around you seem to be only HP sellers calling out, “bros/sister, which won u want? I get the latest HP, latest Dell, anyone you want!” their calling out to you, in their ten’s & twenty’s, you’re quickly scanning their stores as you walk past, no sign of that distinctive white apple packaging anywhere. This is the second time you’ve walked down this same street. Then some calm young man walks up to you and asks “which one you de find?” you answer ‘a Macbook pro’ he says no problem and asks you to follow him to his store. As you enter, you only notice a few Blackberry’s, iphone’s and more HP laptops. He asks you to sit and quickly fires a barrage of Ibo to his assistant in the store, all you pick is “Osiso!” (Hurry up!). He keeps you engaged while asking more questions about what you want and what for, you share, then he starts describing the ideal printer to go with your soon-to-be-purchased laptop, and how a less-mobile, more-desktopish product, the ‘Imac’ is ideal for you. You’re just about to glance at your watch impatiently when his assistant walks back in, as if on cue, with your Macbook in hand…’ Sound familiar? Where he got it from or how much he stands to make from the trade you do not know, but somehow you will remember who got your Macbook pro for you and where.

I imagine there are over 1,000 businesses operating at computer village, each striving for more customers, better margins and higher profits, yet they practice Coopetition. It makes their goods a bit safer, more accessible, easier to store and creates an electronic Mecca of sorts. As long as people come in droves to search for a product or service, they’ll realise there’s more available to take advantage of. It’s something we see often in different industries and businesses. Somehow the Lagos auto-part industry has converged around Ladipo and Owode-Onirin, Electronics at Alaba market and computer village, Car dealers at Apapa and Tin can Island, Banks and Financial institutions at Marina and Victoria Island.

The Banks converge around the same streets so they can share a fibre-optic network to make their systems faster. ‘Virtual offices’ are springing up around Lagos- there is nothing more convenient for the young-upwardly-mobile entrepreneurs and businesses with flexible/seasonal schedules. A fully furnished office, that is serviced with; power, internet, photocopies, meeting rooms, a Secretary etc where you only pay a fraction on what you normally would for rent and other operating expenses.

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