The Chief Executive Officer, Portion Consult, Mr. Lanre Akintilo, speaks on the challenges facing Small and Medium Enterprises and the way out, in this interview with FISAYO FALODI
Small and medium enterprises in the country have been complaining of lack of unfriendly business environment. How has it been for you?
I must say that accessing fund at the onset was very difficult; in fact it was not available. I can vividly remember that I started the business with N2, 000 in 2005 and the strategy we adopted was to plough back everything we made. We created a scenario where banks could trust us with funds; where they saw transparency and where they saw clearly that we were going to do things differently. I must also say that we were a bit fortunate because we had support from some people who believed in our vision and assisted when we needed them for financial assistance. I remember that the bank that first gave us a facility was the defunct Magnum Trust Bank now Sterling Bank which gave us N1m loan about two years after the company started. By and large, we were able to stabilise before we started getting funding from mortgage bank.
How do you advise other SMEs that are equally interested in growing?
I would say those who want to do business in Nigeria should have a focus and cultivate the culture of financial discipline. If they want to make success of their ventures, they need to be determined. I keep telling people that if they want their business to grow, they can’t do three or four things at the same time and expect perfection in all of them. So, my simple advice is that they should focus more on what they do; they should take one bite at a time, chew it, digest it and take another bite. That way, they would have been able to achieve success in what they set out to do. Again, I would say that professionalism has a role to play. If you stay through what you are doing to ensure that you have considerable level of training, it will help in no small measure. I studied Graphics at Obafemi Awolowo University, Ile-Ife, Osun State, and what I am doing currently is part of what I learnt at the university.
If you want to do something, do it along your area of learning. Except if you need to do a different thing, then, go on to acquire training because you don’t have to employ somebody, you can do two or three things by yourself, without having to pay someone to do them.
In what areas do you advise government to assist SMEs in Nigeria?
The government has a lot of role to play. As it is, the environment is not friendly to small and growing business. The cost of funds is killing. Imagine where an average cost of funds in Nigeria is fluctuating between 25 and 27 per cent. For start ups, it is almost impossible to break even, the truth must be told because the average margin is between 30 and 35 per cent. While other countries are willing to develop their own SMEs, the Nigerian government is not looking in that direction and you see that the SMEs form the basis and a large chunk of the middle class, which will catalyze the growth of the economy. The government will consciously work on the current rate of Bank of Industry. The rate is still high compared to what is available in other climes, where they are saying that it is a necessity for you to provide financial support to grow your SMEs. The government has a lot of things to do. Another example is power. Currently, we run three generators here. We have 100KVA and 25 KVA. These are money guzzling. Diesel must be procured almost on a daily basis. The supply we get from PHCN is not enough to power our equipments, so we use generator. The time we were using public supply from PHCN, we found that the supply were not full enough. We have 190watts as against 230 that we require to power the equipment. The damages were getting high for us. The cost of maintaining equipment was high, so we had to make a decision. Do we go with PHCN and incur more damages or stick to generator? So we chose generator. These are the costs that we can save. The government has a lot of role to play in ensuring that it provides the fund of small and medium businesses. Another thing I would want the government to do is to have a stronger policy that helps to protect the SMEs. Take for instance, printing. Quite a number of the books that are being used by Nigerian students are being printed abroad. Indians will come and take the jobs here; Malaysians will come and take the job here, simply because the cost of production here is likely higher. By the time we factor the costs of funding and power into our own cost of production, we reason the price of the cost of production of each of those things; and the publishers also want to cut their cost and make more money. So whoever takes the job to where these facilities are available, where they have lower cost of funds, where they have regular public supply of power, will reduce the cost of production. So, the government must find a way to mitigate the laws to ensure the availability of jobs being transferred overseas. If Nigerian parents will buy the books, Nigerian students will read the books, let Nigerian printer print the books. We request that Nigerian government should formulate policies that will help safe guard our inventions here. Whatever equipment is bought by overseas printers are equally bought by the Nigerian printers. And who gives out the contract anyway? It is the Nigerian government. So, why can’t Nigerian printers print? The government must put in place a policy that ensures that every book contract that is given by the Nigerian government to Nigerian businessmen or printers must be printed by Nigerians printers because Nigerian students will buy and read the books. So, we must protect our own business men. The government cannot fold its arms and say well, we Nigerians have the job, let the publishers print whatever they like. So, we need the government to safeguard our inventions and also protect and create jobs of our people. Not only should we create the jobs, we should also ensure that the jobs are protected. If we create an employment and that employment is not guaranteed year in, year out, 10 years down the line, then, what is the point creating that employment? So, we require the government to put in place policies that help to safeguard our investments.
You said pirates have almost destroyed business for Nigerian businessmen. What do you think the government should do in this area?
All over the world, piracy happens, but policies of the government help to reduce the impact of piracy on the economy. Piracy should be treated as an economic crime. The laws in Nigeria; I am not a legal practitioner, so I cannot claim to know the sufficient laws guiding piracy, but I know that if the government policies will change regarding the way piracy has changed the evolution, it will help to also protect the businesses that are being constantly and daily attacked by piracy. For every book that is pirated, I lose money, for every civil jacket that is pirated, for every printed material that is pirated, I lose money. So, the government must see that a pirate commits the same crime as the one who has stolen government funds, because for every book pirated, the government loses money. So, it is a vicious attack on the entire system and until we have laws that will make the ones who sell the pirated books and the ones who buy the pirated books culpable, then we have yet to begin. I do not think these laws exist at the moment, and if they exist, they should be implemented; they should be enforced. Honestly, I say something to you, I think Nigeria has enough laws. Let us implement and enforce the ones that have been enacted, then, we can move ahead and create more laws.
Advertising and PR is said to be a broad industry. What are the areas that have yet to be explored in this industry?
Well, advertising is a huge industry. While I was in school, my thesis was on sustaining advertising agencies in Nigeria, and I remember vividly that part of my research took me to various agencies as at that time, especially in Lagos because Lagos is the home of advertising practice in Nigeria. What I discovered was that the sector was not properly managed. There is a large population with people of various characters, who are described as not been properly trained who now suddenly get themselves in leadership positions. Again, the leadership at that time thrived within their powers to regulate salary payment so that they could have a template that all agencies would adhere to. We call it agency templates then, whereas the same amount you are paid here is the same you are paid there and even if it is going to be different, it is light difference. It enables the industry to civilise so that poaching is not rampant, you don’t find people moving from one agency to the other after one or two years because they want to get more salaries. It creates a shallow pull of resource people who are not deep in the art and science of advertising. When people drift and move to agencies because of what they get, it is no longer for the love of the profession but for monetary gain. So, you find that in the last couple of years, when I left active practice in the agency in my former place of employment, a lot of agencies were started not even by my contemporaries but people who are lower. These are not deep and you see that what they bring out is really not solid. Go and check the top 10 agencies in Nigeria. Look at their roots and adverts, they have worked incredibly, they have deepened their practice. We have the same power. A lot of agencies sprang up after a little practice and today they no longer exist, because the condition was not there. So advertising needs to be practiced professionally. You need to learn the rules. You can learn graphics and design and visualisation and be the best in drawing or whatever, if you have not printed a sellable art, then you are not yet there. You can read media management and monitoring anywhere, if you have not got and managed a campaign, you are not yet there. These are the areas I want the current leadership to look into. You must deepen the practice of advertising in Nigeria. The same thing for PR. Areas where people can practice are wide-damage control, lobbying, and grand management. The areas are extensive. These days, you find companies which are practitioners in advertising taking PR briefs, without having the experience, prerequisite and manpower to deliver the assignment. If our agencies stay through as one and practice professionally and deepen their people; let them learn the rudiments of the business and let them transit. At one point in Nigeria, we had several banks, now we have stronger ones that have swallowed up the weaker ones. I see this in advertising, so we can have a stronger hand to compete to the global level.
These days, we also see advertisements being cancelled by APCON. What do you think is responsible for this?
We have to go back to the kind of training these guys had. If you are of the old school, you will know what you ought to do. An advertising guy is a man of the community. He knows his community and what he has to say to his people. For instance, a South African cannot teach me to speak pidgin or Yoruba to my people. If I am going to be selling a brand, I will need to know the brand inside out. I will need to know how to connect the brand with the target audience. So by coming out, I become the mouthpiece of the brand. Whatever I want the brand to say will be my thinking. It must be something I know the brand owner or the community will accept. So you should ask about the pedigree of those whose adverts are rejected. You need to question them. Which agency produced them?
