RULES OF THUMB FOR GROWING YOUR IT BUSINESS
Mr. John Ajaju is a young man who began a small business on the streets of the popular Computer Village in Ikeja, the capital city of Lagos, in 2000 selling mostly software using someone else's shop as a base.
With N50,000 given to him by his boss as initial capital 10 years ago, Ajaju now 32, was able to raise capital to set up a small company, Success Systems Company, where he now sells computer accessories and software.
His shop which cost him N60,000 per month for which he paid N120,000 covering two years as the practice is in Lagos now goes for N100,000 monthly.
However, Ajaju says renting an office for his business is better because there is always a contact between him and customers and buying in large quantities is guaranteed.
Ajaju says owning your own shop is the first rule for running a successful information technology business.
'Besides, customers believe that products bought at the shops are more reliable, with the assurance of getting a replacement in case of any eventuality. Getting a permanent base for your business will also help in building relationship with customers who keep calling at your shop whenever they need an accessory,' says Ajaju.
With monthly revenue of about N50,000, he is now his own boss managing his N1.6m value business which he hopes to keep growing to higher heights.
With his shop located on Ola Ayeni Street, he says the shop for running IT business must be located at the right place, which is why he has to pay so much.
Ajaju's story is not different from that of Mr. Myk Nwanna, who runs one of the biggest computer firms inside the Computer Village.
Although, he started off on a bigger pedestal than Ajaju, Nwanna began in a very small shop. Now as the Charman of Genuss Investments Limited, his business in 2009 recorded a turnover of over N150m. He is also targeting to sell one million laptops this year.
Ajaju and Nwanna obviously have followed some similar rules which SME's experts say every small business must follow if it must survive and grow.
Nwanna says, 'To be able to get to this level, we have been patient and perseverant. Of course, every small scale business will need some kind of financial assistance, but it does not end there.'
'In computer business, you have to reinvent your business over and over again. Just like the products get obsolete, your ideas also get obsolete, if you fail to align yourself with the development in the business.
There used to be products that moved last year, but this year, it no big deal. So you must be able to foresee the future, read the time to know what will likely happen in the next four months. So, if you are not able to do that you will just fizzle out.'
Owner of one of oldest businesses in Computer Village, Nwanna believes that so many businesses have closed down because of their inability to reinvent and foresee the immediate future in the ever dynamic IT environment.
'There are so many people that started with us at the same time, but now, some of them are nowhere to be found. They have packed up from the Computer Village and some of them that are here are barely managing to survive,' he says.
He believes that like other businesses, IT businesses need financial support. He advises that IT entrepreneurs must be able to understand the business and come up an excellent plan that will attract credits from banks.
A managing consultant at Prime Resources Limited, one of the five companies prequalified by the Central Bank of Nigeria to consult for it on SME's, Mr Gbenga Oyewole, says people generally make mistakes when it comes to making business plans.
He says, 'When you hear that there is a business, do not just jump into it with your eyes closed. The first thing to do is to have a business plan. The problem again is that some people employ consultants without being realistic. Try to understand the business. Once you understand the business, do a business plan.'
He also recommends tutelage for those going into IT business.
'One advantage the Ibos have is that they go into apprenticeship, such that by the time they start their own business, they would have mastered the business. So the best thing is do a thorough business plan, try to understand the business, if possible, go through tutelage,' he advises.
Nwanna also advises that due to the wide nature of business around the computer, people should identify an area to begin with at the initial stage.
'Find the area in which you can do well and gradually add other areas. The mistake most people make is that they want to handle everything at a go. Most of the time, they make losses here and there. As big as we are, we do not have everything about the computer. We always get others to offer what we don't when we have such orders.
'Keep on watching the market and reinvent your business. We used to be known with mother board but we have completely shifted to laptops after we found out that people have discovered that the price of a branded system is coming down,' he says.