SME growth Lagos

Key to SME growth in Lagos state

Small and medium-sized enterprises (SMEs) are generally regarded as the engine of economic growth in any developing economies. Similarly, a large concentration of SMEs including micro and nano businesses are easily noticeable in Lagos state, the economic hub of Nigeria. The state enjoys a high presence of SMEs, micro and nano businesses more than any state in Nigeria. Why is that? The simple metric to this is that Lagos has a population size of about 15 million, according to United Nations (UN) projections and it appears like a country within a country considering the strength of economic activity and populace.

READ ALSO: FG Mulls Policy to Earmark Procurement Contracts for Women

In fact, without a doubt, Lagos has a population estimate that is higher than some West African countries, namely Guinea (13,132,795), Benin (12,123,200), and Togo (8,278,724), Sierra Leone (7,976,983). Even the population of the state is higher than that of some developed countries such as Finland (5,540,720),Belgium(11,589,623),Sweden(10,099,265), Denmark(5,792,202), and Ireland (4,937,786). Supportably, the population is even higher than the combined population of Liberia (5,057,681), Mauritania (4,649,658), Gambia (2,416,668), Guinea-Bissau (1,968,001) as of February 27, 2021. However, the painful reality is that over 60 percent of the residents of Lagos are poor and live in various high-density and informal settlements scattered across the state. These residents lack proper sanitation, power, and other basic services, and most of them eke a living from small businesses, which includes nano and micro businesses. A visible reference usually includes the operators of kiosks, commercial tricycles, motorcycles and many other informal business operations in the state.

The estimated figure of micro-businesses in Lagos is 3,224,324 and to add to this, over 11, 663 SMEs operate in the state, according to a recent statement from the Lagos ministry for commerce, industry, and cooperatives. In my opinion, this data is underreported and does not reflect the large informal economy that exists in the State particularly the nan businesses. From reliable data, the informal economy employs about 5.5 million people in Lagos, if not more. So, a reliable database is necessary for adequate planning in the state.

The small business economic activities in Lagos can contribute largely to the growth of the non-oil sector, employment generation, and the creation of sustainable entrepreneurship. These can largely be driven by businesses in the formal and informal sector in the state. Arguably, small business represents over 90 percent of private businesses in the state and contributes to more than 50 percent of employment. Yet the state government has not duly recognised the significance of this sector in the economic development of the state. For instance, the popular computer village in Ikeja, Ladipo spare part market in Oshodi and Balogun market in Lagos Island all consist of clusters of mostly micro-businesses with huge economic engagements but the government of Lagos state is yet to facilitate their formality and capacity building with the required policy and incentive considerations.

The novel Coronavirus (COVID19) and the harsh economic climate currently with us have made many of these businesses struggle and some have shut down due to these challenges which include perennial issues. That is, from infrastructure deficits (power, road, technology, and so on) to inconsistent government policies, security problems, multiple taxations, regulatory burdens, stiff competition from large companies, the entrepreneurial attitude of operators, huge financial and funding problems, lack of meaningful structure, longevity and succession plan among others. SME operators and entrepreneurs strive with different strategies and tactics to absolve many of these challenges and shocks to make any meaningful balance with little or no external support. However, the government needs to realise and recognise that small businesses are crucial to job creation, economic diversification, innovation, poverty reduction, wealth creation, and income redistribution in their policy-making activities. If this sector is well harnessed in Lagos state, it can be a huge catalyst in transforming the state economically.

The vivid truth is that a well-functioning SME sector would add more value to the economic fortunes of the state, sustain livelihoods, reduce poverty by creating more job opportunities in the economy than any other sector. Therefore, proper monitoring and evaluation of this sector are crucial for the economic development of Lagos state. When businesses survive, there will be a reduction in market failures and the more businesses are without survival threats the government can equally benefit from their growth and development. It can increase tax receipts and accelerate the growth of industrialisation in the state.

Therefore, the Lagos state government should focus more on policies and programs to widen the SMEs’ involvement in the formal sector particularly the micro and nano businesses. The state government, through the appropriate ministry, can implement policies that will enhance ease of doing business in the state to attract operators from the huge unregulated informal sector to the formal sector. The informal sector in Nigeria refers to economic activities in all sectors of the economy that are operated outside the purview of government regulation. Therefore, policies to attract business formality should be considered and formulated, and also the capacity and sustainability of these SMEs, micro and nano businesses should be enhanced. Because if all these are set in place it will encourage the development of the formal sector of the SME sector in the state.

That said, key stakeholders such as the Small and Medium Enterprise Development Agency (SMEDAN), Nigerian Association of Small & Medium Enterprises. (NASME), Association of Small Business Owners of Nigeria (ASBON), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Association of Micro Entrepreneurs of Nigeria (AMEN), The Lagos Chamber of Commerce and Industry (LCCI), Manufacturer Association of Nigeria (MAN), financial technology (FINTECH) associations, and groups in the organised private sector (OPS) advocate for ways government can create innovative measures to improve business formality, enable secured environment, improve on rule of law, encourage public-private initiatives, invest in infrastructure, and consider policies as the needed. Corruption has also remained a very serious problem that needs to be genuinely addressed because it can threaten any development policies and programs of the state.

The support of these teeming small, micro and nano businesses is also imperative and strategies to sustain their business operations should be key in the decision-making process of the government of Lagos. The National Bureau of Statistics suggested many Nigerian youths are unemployed, the majority of them can be meaningfully absorbed into this sector through self-employment, startups, and financial technology (FINTECH) if the SME sector is made viable with an adequate enabling environment.

In conclusion, the Lagos government should get more involved in the growth, development, and sustainability of SMEs within the state. More so, the state government needs to ensure the development and patronage of locally produced goods and content while putting in place adequate infrastructures. Besides corroboration with experts and consultants in the provision of external advice to government and these teeming small businesses on a range of topics such as strategy, having a business and organisational structure for business continuity, financial literacy, technology, and role of innovation to increase their output is equally significant. Concisely, going forward policies and programs of the government in the state should be rooted in deep rule of law, accountability, creation of a database on small business and uphold strict fiscal discipline. Good luck!

SOURCE: The Cable

FG PROCUREMENT CONTRACT WOMEN

FG Mulls Policy to Earmark Procurement Contracts for Women

The Minister of State for Industry, Trade and Investment, Mrs. Mariam Katagum, has said that the federal government is currently working on a policy that will earmark a certain percentage of public procurement for women owned businesses.

She also said all MSME groups and individuals would be granted level playing ground to apply and access government funding initiatives, particularly the MSME Survival Fund.

The minister spoke while she received the executive committee members of the NECA’s Network of Entrepreneurial Women (NNEW) Abuja, led by its
Chairperson, Mrs. Amina Zanna Ibrahim, on a courtesy visit to her over the weekend.

Katagum said: “Disabuse your minds about government contracts. We have this initiative that is going on about procurement processes for women.

READ ALSO: SME Loan opportunity for Studentpreneurs in Enugu.

“We are trying to take it at a policy level so that all these procurement processes will at least, try to earmark a certain percentage for women owned businesses.

“But we have to take it at the policy level because the men who are taking all the contracts will not want you to come and compete with them.”

However, the minister assured the women that the proposed framework will ensure that female entrepreneurs get a share of procurement contracts going forward.
She added that already, the Infrastructure Concession Regulatory Commission (ICRC) is currently working to ensure that women are considered in future procurement.

The minister also assured that all government’s funding interventions, particularly the MSME Survival Fund scheme, which was created to ameliorate the impact of the COVID-19 pandemic on small business, will be administered on a level playing ground so all applicants can get equal opportunities.

Katagum added that she will consider it a major, if applicant are able to access the funds on merits and without intermediaries or any kind of influence.

She said: “When we first started this MSME Survival Fund, I told the vice president that I would think I am successful by the number of people that would say, they didn’t know anybody or they heard this on the radio, or their friends told them or they saw it on the TV-and they applied and they got it.

“And we’ve got quite a lot of testimonies of people who even said their friends told them to apply and they said leave me alone; and then suddenly, they saw that their friends got it.”

She however, promised that her ministry will work with the group towards realising a common objective to advance the interest of women owned enterprises at all times.
Earlier, Ibrahim had conveyed the women’s visit to the minister, seeking for better collaboration to better collaboration with the ministry.

To group, among other things, sought to partner with the ministry in the areas of information on government’s interventions that could benefit women as well as capacity building.

SOURCE: THISDAY

Benefit SME

Osinbajo Highlights Benefits of SMEs

Vice President Yemi Osibajo has restated the belief of the federal government in the capacity of small and medium scale enterprises to stimulate economic activities and provide jobs.

READ ALSO: Raising stake in SMEs financing, growth in Nigeria

He made the remark as the keynote speaker at the 2021 P&G – BoI SME Academy, where the consumer goods company, Procter & Gamble, in partnership with the Federal Ministry of Trade and Investment (FMITI) and the Bank of Industry (BoI) provided access to training for over 700 SMEs during.

According to the Vice President, “The federal government believes wholeheartedly that SMEs are the bedrock of the economy and we are constantly aiming to support innovations that can help SMEs grow and in turn groom the economy and provide job opportunities.

“The government has been working diligently and creatively on engaging the most vulnerable businesses especially during this current crisis.”

The plenary session at the academy with the theme: ‘SME Development and Growth as a Precursor to Nation Building,’ brought senior government and private sector leaders to discuss proven strategies that could be leveraged to drive the growth and development of local SMEs as the bedrock of Nigeria’s economic development.

Also, the Minister for Industry, Trade and Investment, Mr. Adeniyi Adebayo reiterated the need to create a favorable business environment for SMEs in Nigeria.

He said: “The Federal Ministry of Industry, Trade and Investment is committed to providing SMEs the required support and trainings needed to consistently project their businesses in an upward trajectory.

“We achieve this through information-driven support vital in building a better playing field for commerce in the entire nation.

We are grateful to organisations like Procter & Gamble for their continuous efforts towards transforming their communities of operations through proactive projects like the SME Academy.”

In his remarks, the Managing Director, P&G Nigeria, Mr. Adil Farhat highlighted the need to continuously support SMEs in Nigeria, saying they have the potential to out rightly transform the country.

Farhat added that, “in line with the focus of Nigeria’s economic recovery and growth plan to drive industrialisation and economic growth through globally competitive SMEs, P&G in collaboration with the Federal Ministry of Trade, industry and investment and the Bank of Industry launched the SME Academy to improve their standard, ensure longevity, and facilitate integration into global value chains.

“For over 27 years in Nigeria, P&G has consistently partnered with the Nigerian government to promote strong investor policies and practices that drive inclusive growth, jobs, and welfare of Nigerian citizens”.

SOURCE: THISDAY

SMEDAN MSMES

SMEDAN unveils Initiative To Boost MSMEs Access To Global Market

The Federal Government has launched the ‘SMEDAN SELECT’ initiative to strenghten market expansion for Micro, Small and Medium Enterprises as well as support the creation of brand names for Made-in-Nigeria products.

READ ALSO: Nigeria’s SMEs Get FSD Africa Lifeline For Financial Inclusion

The Director-General of the Small and Medium Enterprises Development Agency of Nigeria, Dikko Umaru Radda said that the initiative which was designed to create brands from standard Made-in-Nigeria products in the food, fashion, beauty and goods sectors, would increase access to local, regional and global markets.

According to the DG, promoting the activities of the MSMEs is critical to the growth of the Nigeria economy as they collectively account for a majority of the enterprises in Nigeria and also account for the highest number of jobs created in the economy.

According to the National MSMEs Survey of 2017 conducted by the Agency in collaboration with the National Bureau of Statistics, Nigeria has a total of 41,543,028 MSMEs, employing 59,647,954 people and contributing 49.7 percent and 7.64 percent to nominal GDP and exports respectively.

He said, “Objectives of implementing SMEDAN SELECT are to increase access to local, regional and global markets for MSMEs; to support market expansion for MSMEs to support the creation of brand names for Made-in-Nigeria products as well as to increase awareness creation on standard Made-in-Nigeria products.”

Speaking at the launch of the SMEDAN SELECT Document,Wale Fasanya, Director, Planning, Research, Monitoring and Evaluation of the Agency, who represented the DG said the products, numbering about 150, have been specially selected across Nigeria.

He said these products would be displayed and marketed on the SMEDAN Website and other social media handles.

Radda noted that MSMEs, if properly harnessed, could trigger an entrepreneurial revolution in industrialization, agriculture and commerce in Nigeria towards creating the platform for job creation, wealth creation, poverty alleviation and food security.

He said, “Globalisation process for MSMEs can be realized through any of a range of cross border activities, including trade, international investment, and participation in strategic alliances, partnerships and networking arrangements.”

Despite the success of MSME strategies in a few countries, he said majority of developing countries have found that the impact of their SME development programs on enterprise performance has been less than satisfactory.

He, however, encouraged Nigerians to patronize all the products profiled as a way of supporting the MSMEs to achieve their collective goal.

SOURCE: THE WHISTLER

Osibanjo to NIPSS

Osinbajo Highlights Strength of SMEs

Vice President Yemi Osinbajo has restated the belief of the federal government in the capacity of small and medium scale enterprises to stimulate economic activities and provide jobs.

He made the remark as the keynote speaker at the 2021 P&G – BoI SME Academy, where the consumer goods company, Procter & Gamble, in partnership with the Federal Ministry of Trade and Investment (FMITI) and the Bank of Industry (BoI) provided access to training for over 700 SMEs during.

SEE ALSO: Enugu SME Center in Partnership with iCreate Africa need ‘Experts’

According to the Vice President, “The federal government believes wholeheartedly that SMEs are the bedrock of the economy and we are constantly aiming to support innovations that can help SMEs grow and in turn groom the economy and provide job opportunities.

“The government has been working diligently and creatively on engaging the most vulnerable businesses especially during this current crisis.”

The plenary session at the academy with the theme: ‘SME Development and Growth as a Precursor to Nation Building,’ brought senior government and private sector leaders to discuss proven strategies that could be leveraged to drive the growth and development of local SMEs as the bedrock of Nigeria’s economic development.

Also, the Minister for Industry, Trade and Investment, Mr. Adeniyi Adebayo reiterated the need to create a favorable business environment for SMEs in Nigeria.

He said: “The Federal Ministry of Industry, Trade and Investment is committed to providing SMEs the required support and trainings needed to consistently project their businesses in an upward trajectory. “We achieve this through information-driven support vital in building a better playing field for commerce in the entire nation. We are grateful to organisations like Procter & Gamble for their continuous efforts towards transforming their communities of operations through proactive projects like the SME Academy.”

In his remarks, the Managing Director, P&G Nigeria, Mr. Adil Farhat highlighted the need to continuously support SMEs in Nigeria, saying they have the potential to out rightly transform the country.

Farhat added that, “in line with the focus of Nigeria’s economic recovery and growth plan to drive industrialisation and economic growth through globally competitive SMEs, P&G in collaboration with the Federal Ministry of Trade, industry and investment and the Bank of Industry launched the SME Academy to improve their standard, ensure longevity, and facilitate integration into global value chains.

“For over 27 years in Nigeria, P&G has consistently partnered with the Nigerian government to promote strong investor policies and practices that drive inclusive growth, jobs, and welfare of Nigerian citizens”.

Furthermore, the Managing Director/Chief Executive Officer of the Bank of Industry, Mr. Olukayode Pitan, in his presentation reiterated the importance of the SME Academy, especially during the challenging economic situation across the globe.

“The maiden edition was held in October 2019. This second edition and first virtual event has been expanded to incorporate structured trainings. This initiative has become particularly important in this era of the covid-19 pandemic and current global economic challenges, which has left many SME businesses struggling to survive now. The Bank of Industry remains committed to transforming Nigeria’s economic sector through funding, strategic partnerships and strengthening of our technology and operations.”

This year’s SME Academy also featured key stakeholders in the industry including Ms. Yewande Sadiku, the Executive Secretary/CEO of the Nigerian Investment Promotion Commission; Mrs. Bola Adesola, the Senior Vice Chairman for Africa at Standard Chartered Bank; Mrs. Tara Fela-Durotoye, the CEO of House of Tara International; and other experts on procurement, investment facilitation, and access to finance.

SOURCE ThisDay

Enugu Government Loan Entrepreneursrs

Enugu govt. launches loan scheme for entrepreneurs

The administration of Governor Ifeanyi Ugwuanyi of Enugu State, through the state’s Small and Medium Enterprises (SMEs) Center, has launched a loan scheme for entrepreneurs in the state, known as “Enugu SMEs Micro-Credit Lending Programme”.

READ ALSO: Harvard Business Review: Igbo Apprenticeship System passes

According to the Special Adviser to the Governor on SMEs Development, Hon Arinze Chilo-Offiah, the programme was created to give entrepreneurs in the state an opportunity to access a maximum Enugu loan of three hundred thousand naira (N300,000) with 9% yearly interest (0.75% monthly), to grow their various businesses.

Chilo-Offiah who explained that the loan has a tenor of 12 months, added that applicants will enjoy a one-month moratorium. Disclosing that: “Terms and conditions apply”, the Special Adviser asked all interested candidates to “visit: www.enugusme.en.gov.ng/microloans or come to the Enugu SMEs Center- No. 2a, Market Garden Avenue opposite SMEs Roundabout along with Ebeano Tunnel, GRA Enugu state”, to apply. The Enugu SMEs Center has been in the vanguard of promoting and assisting entrepreneurs in the state to actualize their dreams of creating jobs and becoming self-reliant, through innovations and dedication.

SOURCE: Legit

Harvard Business Review

Harvard Business Review: Igbo Apprenticeship System passes

Professor Ndubuisi Ekekwe, founder and president of the African Institute of Technology, has revealed that the Igbo Apprenticeship System has passed the first phase of editorial work at Harvard Business Review.

– The Igbo Apprenticeship System has been adopted for decades by the people of southeast Nigeria

– Popularly called the ‘Umunne Economics,’ the system has taken many Igbo families out of poverty

– A Nigerian professor of Igbo ethnic stock, Ndubuisi Ekekwe, is taking it a step further by pushing for the system’s publication on a global platform

READ ALSO: ‘SMEs Could Generate $433bn Through 5G By 2025’

Professor Ekekwe made the announcement via his Twitter page on Tuesday, February 24, adding that there are more phases to go.

He wrote:

“The Igbo Apprenticeship System work has passed the first phase of editorial work at Harvard Business Review. We have more phases to go, but everything is looking fine. Due to the nature of the topic, it is taking time.”

Defining the system, Professor Ekekwe wrote:

“The Igbo Apprenticeship System is a business philosophy of shared prosperity where participants co-competitively participate to attain organic economic equilibrium where accumulated market leverageable factors are constantly weighted and calibrated out.”

He noted further that the system, via dilution and surrendering of market share, enables social resilience and the formation of livable clusters, engineered by major participants funding their competitors.

He said this comes with success measured on quantifiable support to stakeholders, and not by absolute market dominance.

He added:

“My postulation is that everything the world is looking for, to reduce inequality, the Igbo Apprenticeship System has frameworks that could be adapted, for the rise of all.”

Igbo people are known for their diligence and broad participation in business life in Nigeria. Igbo businessmen and women have been playing significant roles in Nigerian industrial and business spheres for a long time.

This explains why so many of them are quite wealthy.

Meanwhile, days after some leaders of the southeast stormed the National Assembly to demand the creation of another state for the region in the spirit of fairness, a former senator, Shehu Sani, has given reasons why the demand is a tall order.

Sani, who represented Kaduna Central at the Senate during the 8th National Assembly, asked the leaders to jettison their agitation for the creation of more states, adding that it is a cumbersome procedure in the constitution and they should shelve the idea.

Source: Legit

5G Techcnology

‘SMEs Could Generate $433bn Through 5G By 2025’

LAGOS  – Global telecom and communication service providers have been urged to do more to address the needs of Small and Medium sized Enterprises (SMEs) if they are to see a return on their enormous 5G capital investments. 

A new report, published by BearingPoint//Beyond, in collaboration with Omdia, highlights the potential of SMEs as a major source of future 5G revenue for CSPs. 

The report estimates that SMEs around the world could generate up to $433 billion in revenues by 2025. 

READ ALSO: Jumia Lending empowers entrepreneurs.

However, this market segment remains vast and untapped with the majority of CSPs focusing 70% of their resources on the 1% enterprise market. Despite this revelation, not enough CSPs are recognising SMEs as a major source of B2B revenue, especially in regard to 5G. 

Yet SMEs, many of which already see value in 5G, perceive CSPs as their trusted 5G go-to partner with 42% prioritising them to execute their 5G strategies. 

“CSPs are still trying to approach 5G the same way they approached 4G, with a clear focus on consumer and enterprise. However, 5G opens new opportunities for CSPs and one of them is the SME segment. 

“Digitalisation and Covid-19 have transformed the needs of SMEs and their awareness of the impact that new technologies such as 5G, IoT, and AI can have on their business to enhance productivity and efficiency, and boost sales. In fact, our previous research highlighted that on average 73% of global SMEs see 5G as important to their business. 

“However, it’s clear that it’s not 5G technology that they’re after, instead SMEs understand that 5G is one part of a broader technology solution that they need. In fact, 93% of SMEs told us that it’s more important for CSPs to collaborate with an ecosystem of partners to build solutions that better fit their needs than to simply provision 5G services,” said Angus Ward, CEO, BearingPoint//Beyond. 

The report argues that CSPs currently identify large multinational enterprises as the segment that will drive 5G revenues, however the large enterprises surveyed do not regard CSPs as their primary 5G providers. 

In fact, the report finds that 72% of enterprises would prefer to work with a service provider that is not a CSP. Findings show that 31% of large multinational enterprises will choose cloud service providers to execute their 5G strategies and 34% even favour taking a D.I.Y. approach. 

The report emphasises that CSPs should not squander the opportunity to support SMEs in realising their 5G ambitions, as SMEs look to digitalise their business amidst the deeply transformational impact of Covid-19. 

“We’re looking at a new type of SME, one that is seeking a partner that will orchestrate comprehensive partner ecosystems to co-create solutions to provide them with a better service. For CSPs, this is a unique opportunity, especially considering SMEs see them as a strong candidate to fulfil this role. 

SOURCE: INDEPENDENT

Jumia Lending

Jumia Lending empowers Nigerian entrepreneurs

According to the Country Manager Lendigo Nigeria, Seun Oyediran, the partnership with Jumia makes the lending process easier and allows the platform to make good credit decisions when dealing with business.

Small and Medium Enterprises (SMEs) are the key economic drivers in Nigeria. However, access to funds has been one of the issues affecting growth of this essential sector of the Nigerian Economy.

While government and relevant agencies have set up credit facilities to mitigate the finance challenges faced by small businesses, many still struggle to meet up with loan requirements, with collateral being a major stumbling block.

In the ecommerce sector, Jumia, the leading online marketplace in Africa, is taking initiative with Jumia Lending, to help entrepreneurs on its platform grow their businesses through strategic partnership with lenders who make loans easily available.

One of such partnerships is with Lendigo Nigeria, a lending platform that offers business loans without collateral.

According to the Country Manager Lendigo Nigeria, Seun Oyediran, the partnership with Jumia makes the lending process easier and allows the platform to make good credit decisions when dealing with business.

Country-Manager-Lendigo-Nigeria-Seun-Oyediran

“Our partnership with Jumia Lending helps build trust with sellers and allows us to have access to their transaction data which allows us to be able to make good credit decisions and finance their growth. We have been actively partnering with Jumia since 2017, and we are happy to continue financing the growth of their sellers,” he said.

A Jumia seller, who is one of the beneficiaries of Jumia Lending programme, Jumoke Akinsanaya, said the collateral-free loans has granted her business direct access to big companies, facilitated bulk purchase and improved her business workforce.  “I have been using the Jumia Lending platform to grow my business. At the beginning, we were doing it in bits and few times we were able to process our orders when we got them.

ALSO READ: How to start a wholesaling business in 2021

“But with Jumia lending, we’ve been able to buy in bulk and now have access to companies to purchase directly from them and that has helped expand our store. When we started, we had 300 assortments, but now we have 900. I have been able to increase my workforce as well. We started with six staff and we are about twelve now,” the owner of Deeski.com said.

Explaining what qualifies a seller for the loan, the Head Consumer Services, Jumia, Austin Okpagu, said sellers on the platform can apply for the loan from a list of Jumia financial service partners with their sale history, and get the loan within 48 hours. “Jumia lending is a lending marketplace that allows Jumia sellers to easily request for a loan from any of our financial service partners based simply on their past revenue on Jumia,” he said.

SOURCE: TechEconomy.ng

The new frontier of wholesaling

How to Start a Wholesaling Business in 2021

Wholesaling plays a fundamental role in the overall distribution and sales of a particular product. It is also a very competitive market, but you can be successful at wholesaling with the right resources and connections. 

Wholesaling gives you an advantage because unlike the retail business where the money is made one product at a time; the wholesale business allows you to earn more. Since your customers are retailers, they will need to buy your product in volumes to sell to their customers.

You might want to ask yourself; Do you want to stock your products or have them drop-shipped to your customers? What products do you want to sell, and where can you find suppliers?

In this article, we will run through tips on how to start a wholesaling business in 2021. Let’s dive in!

SEE ALSO: MSMEs To Receive Support Through SMEDAN

1. Choose a Market for Your Business

This is the most crucial part of starting a wholesaling business. You will need to decide which industry or market needs your product. You will need to ask yourself. What products should I sell? Who needs my products?

As an SME in Africa, it is important to choose products that are moving in your current economy. You will need to find dealers, store owners, retailers, and customers who need your product.

You would also need to know who your competition is, their prices and what kinds of products they sell. This will help you understand which market to target and what kind of products to sell. There are several profitable wholesaling ideas. You could wholesale in Jewelry, textile, or even organic food. The key here is research.

2. Choose a Location for Your Business

This is the next most important step. If you decide to stock your product, you will need to get a warehouse to run your business.

Choosing a central location for access and easy movement of goods is also something you would need to consider.

How to Start a Wholesaling Business in 2021
Choose a good location for your wholesaling business

Secondly, you will need to hire efficient staff to ensure that your product is not misplaced or damaged. You could opt for a family member you can trust.

3. Choose Your Manufacturers/suppliers

You will need to identify manufacturers who are willing to give you their product to sell. You might want to note that some companies might require you to meet certain sales targets. You can also decide to talk to distributors that can get you a dealership. Wholesaling is about networking and establishing relationships.

4. Establish an Online Presence

In 2021, going online has become an important business strategy. Your wholesaling business is no different. The online space has become saturated with buyers making several buying decisions every day.

Establishing yourself online will help build trust and establish you as an authentic brand. Not only does it build trust, but it also attracts retailers and suppliers. It is a great way to tell prospective clients that you are ready to do business.

5. Get an easy to use inventory software

With the number of goods going in and out of your warehouse, having inventory software will pay a lot and give your business a smoother run. Inventory software helps you keep track of your inventory and determine your business’s demand and supply relation.

6. Check for Return Policies

 When looking for manufacturers/suppliers, it is important to check for their return policies. You would need to check their return policies and how they handle goods being returned to them. If their return policy isn’t clear, it is best to stay clear of those manufacturers. Inventory not sold is a waste of money.

In return, you would need to create friendly return policies that allow retailers to return goods they can’t sell. To create a comprehensive return policy, you should check with your manufacturers and align your return policies accordingly.

We hope that these steps give you a good platform to start your wholesaling business. To grow and establish yourself in the wholesale business, you would need to identify product trends and have a good understanding of your market. Don’t be afraid to take that wild step in starting your wholesaling business. 

Do you have any questions or comments on SMEs in Africa? Kindly drop them in the comment section below!

SOURCE: SME360