Fidelity SME Forum: Finance key in business start-ups – Expert
A financial analyst and promoter of private sector-led investments in Nigeria has further reinforced the critical role capital plays in start-up companies even as the business needs enabling environment to thrive. Speaking on: 'Sources of capital for SMEs, the options and requirements', at the weekly radio programme organized by Fidelity Bank, Managing Director and Chief Executive Officer, African Capital Alliance (ACA), Okechukwu Enelamah said that the key thing an entrepreneur needs when starting a new business is funding. This, he explained could be sourced from family, friends and foes.
'In the industry, people talk of the three Fs, – family, friends and foes. People typically start off with their own savings, with family, friends and foes – those who are prepared to support them any way as an act of trust. What they all have in common is relationship with the entrepreneurs when they are building their businesses'. He explained that people naturally go to sources where they have existing relationships to access funds because they do not have track records that could help them access institutional capital. 'From there, they can move to the next stage and with the right legislation and encouragement in the arena they find themselves, they can always rise and thrive and then we can also come in to aid them rise to the next level. But they have to make the bold step of starting up first', he said
He, however, advised potential investors not to focus solely on ways of raising capital but to also spend quality time to plan and think through the business before starting up so as to increase their success rate in the business. 'To increase your odds of success, one of the most important things is proper planning and execution. Planning is where the business comes in. For a lot of people, when I say planning, here, I mean the ability to think through and it may be a fancy business plan but it has to be well conceived.'
He also stressed the need for human capacity development to enable entrepreneurs attract the right kind of personnel to their business. 'In execution, I would say the most important thing is to have the kind of people around you that will increase the odds of success. An entrepreneur may bring the idea but he may need a general manager that brings traditional general management skills to organize the team. If he can't afford that, then he might need somebody else that complements him because two heads are better than one', he said.
The ACA boss urged government to create the enabling environment for businesses in the country to thrive and succeed which according to him ranges from things like basic infrastructure or soft infrastructure like property rights, automated company registration process and other tools that entrepreneurs may not have when they are setting up. 'An entrepreneur might have a great idea but if you go to places like Silicon Valley, apart from getting people who have experimented or done business in the space, they get mentoring, access to market, access to technology and everything else that is not core to the business. So the core is brought and everything else is added'.
Fidelity SME Forum is a deliberate attempt by the bank to resuscitate the Small and Medium - scale Enterprises (SMEs) and create a new generation of entrepreneurs with the 'I can do' spirit in Nigeria. This is not only seen as the bank's believe in SMEs as a growth catalyst but also a clear commitment to efforts aimed at revamping the Nigerian economy. The weekly radio programme, essentially seeks to empower Nigerian entrepreneurs with knowledge, know-how and expertise that will help them build successful businesses. This it does by bringing renowned entrepreneurs to the show on weekly basis to share their experiences and encourage potential and existing entrepreneurs. This is aside the other financial, legal and business advisory services the Fidelity Managed SMEs Business renders to customers.