Selling Smart in a Tough Market: Nigeria's Business Landscape

Hello and welcome to the show. Today we're going to be looking at understanding the Nigerian business landscape. That's because of questions that I've received in the past about how we can understand the unique challenges and opportunities for local businesses in Nigeria. Now as of the date of this recording in 2024, the way the landscape looks at looks like rather or rather the things I'd like to emphasise about the business landscape today is we have a high cost push, inflation and then of course we have high energy costs because of the the increase in fuel prices.

Now the implications for this are quite straightforward. That's for those of us who are self-employed or who are business people. The living conditions obviously require more because it costs a whole lot more to buy stuff, drive around, you know, stuff like that. And then of course, from a business perspective, the cost of running the business is now higher. That's because we're a couple of you. You need to fuel your generators.

Of course there's fuel for the car. What else? Rent for office spaces and private accommodations have gone up. That's for those people who choose to convert a room in their house for office use. And generally factors of production have gone up. So for those of you who buy stuff in the common market to run your business, like let's say you're a Catra, you know, the cost of a goosey, for instance, keeps going up and up and up.

So for today, I bought a cup of a cup of a goosey at 1600 Naira. And I hear from my wife that back in the good old days, you could buy stuff like that for 200 naira, 300 naira A cup. So if you're a caterer in the city of Abuja and you started off your business running at 200 naira a cup for a cup of Ygosi, and now it's currently 1600 naira, then of course you see that the factors of production have gone up. And of course it comes with all kinds of attendant business problems.

Now the solution is this. Some people will say the solution is overturned the government. Some people will say the solution is voting Peter Obi. Some people will say the solution is people rise up, there should be a revolution. Other people will say the solution is what else, argue for price controls. And then some people say the solution is a reversal of the, the government's stance on the fuel subsidy. The fuel subsidy removal or.

Yeah, well anyway, some people argue has the fuel subsidy actually been removed? Now The thing is all of those, yeah, I guess they are possible alternatives. But The thing is for someone who is self-employed or a business person in Nigeria right now, these are things that are not within our control. So we cannot affect or affect the revolution. We can bring in Peter Obi, if you think that's the solution to the problem.

We also cannot ensure that price controls come into effect because, you know, we're not policy makers. Let's see, what else? What other solutions did I put on? OK, a revolution? Yeah. Then there's no way that we can affect the revolution. And besides, there is that naughty issue that once you have a legitimate government in place, whether you like it or not, and you're advocating a revolution, what you're advocating for is something,

actually something treasonous. And of course, treason carries the death penalty. So if you're a family man like me, I don't know if you actually should be advocating the treason solution right now. So The thing is, all these options that people advocate right now, no matter how reasonable they are, are not things that are within the personal control of you and I, individual business owners and self-employed people. So the only solution that is within reach, that is practical,

that we can do by ourselves cost effectively actually is to sell more. Because if you sell more you're going to be able to get more revenue to offset the business problems. If you sell more, you're going to be able to get more money to offset business production costs. If you sell more, you're going to be able to get more money to improve your quality of life. I'm sure you guys see the correlation that the only thing that we can do self-employed people, business owners,

entrepreneurs, mumpreneurs, dadpreneurs, solopreneurs, whatever it is you want to call yourself. That is the only practical option that we have available and that is to sell more. Now some people are going to say how can you sell more in this environment because everybody else, your potential customers and clients are facing the same things. They are also having their living cost go up, their their cost of running their businesses go up.

They're also subject to high rent, high energy cost, high cost, push, inflation, blah, blah, blah, blah, blah. So can you sell more in terms of getting them to buy more or can you sell more in terms of raising your prices because that's also, well, it's not raising the prices for some people it's not an alternative. It actually is something that you have to do. That's the reason why the cost of Igusi has gone up from 203

hundred and now it's 1006 is because for the person who gets, who has to procure the Igusi, cost of fuel has gone up. Yeah, the farmers have raised their own wages. Of course, there's some value add, you know, taking cleaning, processing, things like that. So all these costs have to be borne by someone and of course it's not going to be borne by the business owner. And so that's the reason why the cost of a Gucci has gone up.

So. Oh, sorry, not a Gucci. I made a mistake. Or boner. Yes, it's the cost of 1 cup or boner. So there are some businesses where actually selling more is not just the option, but selling more in terms of increasing your prices actually is a necessity, something you have to do, you have to do that or you go out of business. So the question can you sell more in terms of getting people to buy more or raising your prices, The answer is it depends because some businesses are seen as non essential.

So when the cost of things go up, some businesses fade and that's something I've been hearing from my friends who are involved in the alternative energy space. So it looks like when people are in the grind, so when people are in the bind, rather they cut down on some expenses like solar and inverter and things that are nature. So things get rough, dollar exchange goes up, the cost of batteries balloon. In fact, right now it's going to cost about 800 grand to replace my batteries if we need to replace the batteries right now for my own inverter.

So it looks like when people are in that kind of a pinch, then the demand for these sorts of things go down. So if you're that kind of business and that's indeed the case, then well, I don't know. Well, I feel sorry for you. But who knows, we might be able to sit down and do some thinking, some strategizing, and be able to find a way out of the whole Quagmire. Maybe consider business financing. Maybe some banks for instance might be opening, might be open to partnering with you to provide financing on some of these things.

So yes, two batteries, 800 grand. But maybe they might be banking products where people can finance it through their banks. Maybe partner through partner with let's say Axis Bank for instance. And if the person is a salary and then Axis Bank is taking 50K out of their salary for the next, OK, 50K for 800, How much is that? And then you get the whole point, taking 50K every month until the whole thing is settled. So financing, that might be an option.

Then there are other businesses. But there's one thing that I've noticed though, you know, the government comes in, there's a change in the subsidy thing. The macroeconomic factors seem to get worse, but it looks like people still get married. Weddings are still lavish. People still buy iPhones, People still buy the Samsung phones, including that flip one that a point cost 900 grand. People still buy cars, at least in Abuja anyway.

I still see supercars all over the place and they seem to be all these vanity purchases that are still happening. So The thing is, yes things might be getting tired but it looks like people are still spending money and they are business owners that have found ways to move their merchandise. Even people who sell things that are non essentials like weddings, phones, cars, the purchases still seem to be happening. So can you sell more?

I guess this has to be done by a case by case basis, but these are the sorts of questions that you have to ask yourself as a self-employed person and as a business owner in Nigeria currently in 2024. So what is required is you need to be deliberate and proactive. You need to learn how to sell, you need to prospect daily. I keep listening to the show because those are the sorts of things that we talk about. So thanks for your time and attention.

I'm your host Havishima Ayedee. You can connect. Please connect with me on LinkedIn. You get the spelling of my name from the link. We're currently listening to this episode. Also, connect with me on WhatsApp. Phone number is 08064662140. The country code is +234 for those of you who are not Nigerian. Thanks for your time and attention. I'll catch you guys at the next episode.