There has never been a time when resilience is needed by Nigerian entrepreneurs than now, given the current economic situation of the country. With inflation soaring, the exchange rate fluctuating wildly, and transportation costs skyrocketing due to the high cost of fuel, it is difficult to achieve entrepreneurial success. Nigerian entrepreneurs face an uphill task to continue to stay in business. Resilience is the ability to adapt, overcome challenges, and thrive even in the face of adversity.
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It involves mental toughness, flexibility, and a proactive approach to problem-solving. Resilience is a skill that is most needed at this time by Nigerian entrepreneurs. This article explores how building resilience can be the key to entrepreneurial success in today’s Nigeria, offering practical tips on how to go about this.
The Nigerian Economic Realities
The economic situation in Nigeria is challenging, to say the least. At over 35%, inflation rates have reached unprecedented levels, causing the prices of everyday goods and services to rise steadily. This impacts both consumers and businesses, squeezing profit margins and reducing disposable income.
Additionally, the exchange rate has become increasingly unstable, with one dollar now trading at about 1,500 naira. This makes importing materials or products prohibitively expensive for many businesses.
The inauguration day “removal” of the fuel subsidy by the Tinubu-led administration has led to a more than 200 per cent increase in the prices of petrol, dramatically increasing transportation costs. This decision, while aimed at reducing government expenditure, has had a ripple effect on almost every aspect of daily life and business operations, leading to higher logistics costs and increased costs of production. Alongside this, an increase in electricity tariffs has further worsened the cost of running a business in Nigeria today.
According to the Manufacturing Agency of Nigeria (MAN), more than 700 manufacturing companies shut down operations in 2023 due to the rising costs of operations. On Tuesday, May 28, 2024, during a press briefing to mark the government’s one year in office, the Finance Minister, Wale Edun revealed that over 800 businesses shut down their operations in Nigeria. Data from the Nigeria Bureau of Statistics (NBS), Nigeria’s GDP dropped to 2.9% in the first quarter of 2024, lower than the rate recorded in the last quarter of 2023, 3.46%. Given these challenges, entrepreneurial resilience in Nigeria is no longer just a nice-to-have; it’s a necessity.
Strategies for Building Entrepreneurial Resilience
1. Mindset Shift
One of the important places to start building resilience, especially during challenging times as we have currently in Nigeria is adopting a mindset shift.
Yes, the challenges are enormous but viewing them as opportunities to learn and grow, rather than insurmountable obstacles, can make a significant difference. Entrepreneurs who will carry out this mindset shift must believe they can improve and succeed with effort and persistence.
2. Financial Prudence
Financial prudence is essential in an economy with high inflation and exchange rate instability. If you’re an Entrepreneur, you should focus on efficient cash flow management, reducing unnecessary expenses, and finding ways to increase revenue without significantly raising prices. Building a financial cushion can also provide a buffer against economic shocks.
3. Innovation and Adaptability
Innovation and adaptability are also important to the building of resilience. As an entrepreneur in Nigeria, you need to look for ways to adapt your business models to the current economic realities.
This could involve finding local suppliers to reduce reliance on imports, developing new products or services that cater to changing consumer needs or leveraging technology such as social media to improve market reach.
4. Networking and Collaboration
Building a strong network can provide support and resources that are invaluable during tough times. As an entrepreneur, you should join industry associations, seek out mentors, and collaborate with other businesses to share knowledge and resources. This can open up new opportunities and provide a support system that enhances resilience.
5. Focus on Core Competencies
During challenging times, it’s important to focus on what your business does best, that is the core competencies or strengths of your business. By zeroing in on core competencies, you can deliver higher value to your customers and differentiate yourself from competitors. This focus can help you maintain customer loyalty and sustain business growth even when times are tough.
6. Mental and Physical Well-being
Resilience is not just about business strategies; it’s also about personal well-being. This is because you need to continue to build your business. Challenges as we currently have them in the country have tendencies to create anxieties and panic that could degenerate into medical illnesses.
You need to prioritize your mental and physical health to maintain the stamina needed to navigate difficult times. Regular exercise, a balanced diet, and adequate rest can help reduce stress and improve overall resilience.
A Reminder…
Just in case you’re thinking it’s the end of the world for you as an entrepreneur due to the present challenges, remember many other entrepreneurs around the world have faced and overcome significant economic challenges.
During the 2008 global financial crisis, many businesses were forced to rethink their strategies, cut costs, and innovate to survive. Those who succeeded did so by being flexible, seeking new opportunities, and maintaining a positive outlook despite the difficulties. You too can.
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Closing Thoughts
According to Robert Schuller, “Tough times never last but Tough people do.” It’s a tough time to be an entrepreneur in Nigeria, but it’s also an opportunity to build the kind of resilience that can weather any storm. By focusing on these strategies and staying adaptable, you can navigate these challenging times and come out stronger on the other side. Remember, you are not alone, and there is a community of fellow entrepreneurs who are facing similar challenges and are willing to support one another.
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