In the contemporary business environment, digital solutions have become indispensable tools for enhancing productivity and driving growth.
For small businesses in Nigeria, leveraging digital technologies is crucial not only for surviving but thriving amidst economic challenges and competitive pressures.
The question however is, what is the criteria by which a business can be classified as an SME? The specific criteria for classifying a business as SME can vary by industry, yet there are common factors or key characteristics which define small businesses. They are usually privately owned companies, partnerships, or sole proprietorships that operate on a smaller scale compared to larger corporations.
They employ fewer people; less than 200 persons. Their owners are involved in the daily operations of the business, and according the National Policy on Micro Small and Medium Enterprises (SMEDAN policy), they have less than N500million in assets.
Nigeria, with its large and youthful population, is one of the fastest-growing technology hubs in Africa. The proliferation of internet access, smartphones, and digital literacy has paved the way for businesses to adopt digital solutions.
However, despite these advancements, many small businesses still face challenges such as inadequate infrastructure, high costs of technology, and limited digital skills. Overcoming these barriers is essential for small businesses to fully benefit from digital transformation and which is the driver for operational efficiency for SMEs.
They support the management of routine tasks, communication, record keeping, human resources, accounting, inventory, marketing and client relations and many others.
About a year ago, I consulted for a company which had been operating for over three years without an internal communication system.
Client requests fell through the cracks, deadlines were almost always never met and there were significant levels of client dissatisfaction, because without a communication and client relationship management system assigning responsibilities was a challenge, follow up and monitoring was almost non-existent.
We successfully introduced a digital workplace solution which supported collaboration, communication, scheduling, conferencing. Simply digitalizing these processes within the organization improved efficiency by over 30%.
When you visit some stores to purchase an item, an employee goes to the “parking store to confirm if the item is still in stock; stock management – a common problem for retailers.
One of my close associates an entrepreneur who is heavily invested in retail products has working for her only 2 employees, who majorly manage packaging and delivery. When how she manages her inventory, she shared an accounting management app/software which helps her to track her inventory, create invoices, handle bookkeeping and month end account report.
It was mind-blowing!
It reveals how much of employee costs could be saved by adopting just one digital product to support business operations? Streamlining operations through digital solutions can lead to significant productivity gains.
E-commerce platforms provide small businesses with the opportunity to reach a global market, expand their customer base, and increase sales.
They provide storefronts and marketplace that allow small businesses create digital stores for their products in order to access wider reach and enter new markets.
The platforms also allow for the set-up of payment gateways which supports the business owner in receiving payment from different locations and in some cases across multiple currencies.
To further promote visibility, digital marketing becomes essential for reaching a broader audience.
One of the clients we worked with had opened a new branch of their business away from the area where they had already built a strong customer base and was really concerned about low foot traffic in their new business office. Using digital marketing, and setting up an online consulting service, they were able to attract the kind of clientele they want for their business, and grew revenue by 50% within a few months.
As technology continues to advance, new opportunities will emerge for businesses to enhance productivity, reach new markets, and innovate. The future of digital technology for small businesses in Nigeria is promising.
The rollout of 5G networks in Nigeria will enhance internet speeds and reliability, supporting the adoption of advanced digital solutions and enabling new business models.
Addressing the infrastructure, cost, skill, and cybersecurity challenge is imperative for successful digital transformation. As technology continues to evolve, small businesses in Nigeria must stay well-informed of emerging trends and innovations globally to remain competitive and drive future growth.
Amarachi, is a Principal Partner at Marach Consul Limited and Founder of The Small Business Workshop, leverages 15+ years of expertise in Business Analysis, Process Improvement, Finance, Strategy, Sales, and Risk Management. She’s trained over 4000 entrepreneurs, enhancing business growth and operational efficiency.
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