Subscription Based Support, A Solution For SMEs In Nigeria – Kalu, CPPL Nigeria.
My association with SMEs started with a business enhancement program we facilitated for Mega distributors of Nigerian Bottling Company Limited in 2016. We have also trained and counselled more than 200 SMEs who have attended CPPL Monthly Training Programs, where I am the Lead Facilitator.
In the last two years, I have also mentored some SMEs through the Tony Elumelu Foundation and Lagos State Employment Trust Fund. These have helped me gain some considerable insights on what SMEs experience as well as the peculiarity of their needs.
Incidentally, SME needs are the same overall, particularly across Africa, and any discussion with an SME will highlight their basic challenges. Their businesses face unique challenges across the continent. These include:
- Not being easy to register a business (though a lot is being done to change this in Nigeria),
- The climate or context of business is not very favorable
- Culture is an issue
- Inadequate infrastructure (electricity, roads, etc.) pose even greater challenges
These obstacles are very real and the need to solve or workaround them, present a great opportunity for SME Consultants.
I believe that at a foundational level, SMEs everywhere face a common set of challenges. I can say that the potential solutions can be mutually reinforcing. The business challenges are characterized by the need for :
- Accurate and timely information
- Access to funding for the funding of setup and operating costs
- Knowledge of the markets and ability to choose the right niche
- Training for staff
- Access to technology and
- The urge to become more competitive.
Consultants in the SME field are quite familiar with these challenges and a lot is currently being done. However, we need to create a support model that SMEs can identify with.
In my experience working with SMEs, I have encountered problems concerning what to pay for the services they want me to provide. I was charging by the hour, or charging a fixed fee and worked hard to improve the situation of my clients and in some cases got referral businesses. However, I never felt anywhere near pleasant or comfortable. I felt dependent, like a supplier not a partner, and generally not in charge.
Whenever I mentioned an hourly rate during discussions with a client, it was never received well. I got immediate pushback, even in the most favorable of sales settings. It’s a reflex. SMEs can’t help themselves. A client once said to me, we had not anticipated an hourly fee this high. Another said ‘So, how long is this going to take, exactly? Charge or fees most times change the direction of the discussion and usually in the wrong director. Clients forget issues they wanted to solve and begin to major on negotiating fees.
Not long ago, I was negotiating another deal with a new client and it struck me: I don’t want to be in this space anymore, trying to convince a skeptical buyer (real or acting) that I can improve their business results. So, I just took the price part out of the talks.
One of the very interesting things in the relationship is that you get engaged for one assignment and before you know it, you are doing everything for them, ranging from Marketing to HR or Training etc. This is not bad in itself because it simply tells me they are looking for a generalist to help them sort out issues as they come up. So, you can start off as a Marketing consultant and end up assisting to prepare documents that could aid credit scouting. I recall having to get into Auditing and Organizational Structure Design and Change Management training and Culture Diffusion for a business that originally engaged me for marketing services.
I like to submit that what an SME is looking for is a Value Creation Consultant. Someone who will be to them what they want you to be to them. They have varying needs which when solved would allow them to continue in business and improve their competitive position. Any consultant that can help them through this will be perceived as a value creator.
I believe a subscription based solution is the answer I have been looking for. SMEs need marketing support, HR expertise, financial advice, ICT services and more. Each time they need something they end up negotiating in a field they don’t know a lot about. Without true knowledge of the discipline involved they resort to squeezing budgets. It’s a never-ending cycle of short sprints that do not elevate the company in a strategic way. Plugging holes, instead of building new roads.
I believe that for an affordable subscription fee, SMEs can get all the support they require to grow their business and deliver value to their customers consistently and improve results considerably. Better product quality, improved staff retention, efficient computer systems. These critical elements of business take running time, experience, sound analysis and decisions which an experienced consultant will deliver.
“I will manage the entire process for you – employ appropriate resources from our network of collaborators and ensure results are delivered with excellence”.
I guess the next question would be how do you measure the outcome and impact of the solutions you provide when the job was never really properly defined at the beginning? Not a problem. The real brief from the SME should be that “I want to grow my business from x to y”. The consultant will then break the goal down into different work streams and KPIs and focus on achieving them.
Finally, I would like to encourage Consultants to only focus on objectives and value when discussing with SMEs. Patiently explain how the work will be done and get their buy-in.
Twelve months is a good time to work with an SME and expect to show some exciting results. The first three months could show some losses, the next nine will be profitable.
To enable SMEs buy into subscription based fees, we sure would need to craft a strong value proposition in this direction and clearly demonstrate how our skills and tools will work for them as they would definitely want to know how progress will be measured and what the final outcome and impact of the engagement would be. These are legitimate.
Finally, I like to salute our SMEs and to appreciate the good work they are doing. They are indeed the engine of any economy. With the right support they would do more and Nigeria will be better for it.
Ikechukwu Kalu, BSc, MBA, DipM. FCIM, MNIMN is an experienced Value Creation Consultant, C-Level Marketing, Business Development & Retail Management professional with decent experience from manufacturing, telecoms and financial services. He is a Lecturer at Pan Atlantic University and Resourced Person at Lagos Business School, Lagos, Nigeria. He is currently the Lead Consultant at Customer Passion Point Limited (CPPL), a firm of Value Creation Consultants that provides Marketing and Training Solutions to small, medium and large corporations in Nigeria and Tanzania.