In my contribution to the last edition of this magazine, I had noted that 2016 will bea difficult year for Nigeria in particular and the rest of the world at large,as the economic headwinds which characterized 2015 still extend to the New Year. It is no longer news that Nigeria recorded a negative Gross Domestic Product (GDP) growth rate of -0.36% in the first quarter of 2016. Should this be the case by the end of the second quarter, then the Nigerian economywill officially be in recession.
A recession is defined as a period of economic downturn. Technically, if a country records negative GDP growth rates in two or more consecutive quarters, then such economy is classified as being under recession.
Managing your business through a period of economic meltdown will be severely daunting. Ordinarily, small businesses face myriads of obstacles even in normal times ranging from financial and sales challenges, to human resources and management of suppliers. These impediments become even greater during periods of recession.
Often times, recession is characterized by extraordinary market-place pressures, decreased staff morale arising from inevitable pay cuts, downsizing and other rationalization measures, weak market demand, inflation and hike in the cost of basic amenities, and exorbitant taxation as the government struggles to generate enough revenue to stimulate the economy.A research by HBR suggests that only 9% of companies come out of recession stronger than ever.
Of these few, small businesses are better positioned to navigate the turbulent waters of recession. They are small and nimble, courageous and innovative in approach. They are more flexible and better placed to take advantage of obstacles, and see opportunities even in hard times. They are less bureaucratic andhave more elastic operating systems.
Here are six steps that will help you steer your business through the tide of economic meltdown:
- Check your Cash-flow and Income Statement Regularly
There is no better time when “cash is king” than during recession. Entrepreneurs must maintain a clear trade-off between increasing sales and maintaining a healthy cash flow. To succeed in these hard times, you must establish a strong credit policy which seeks to contract credit expansion. This step is important because with the attendant high risk of job losses being one of the major consequences of a recession, retailers and small businesses are likely to suffer credit losses where some of their customers lose their jobs.
Akin to this fact is the need to minimize concentration of credit exposures on certain customers and segments of customers. This, in effect, means that businesses must have a good understanding of their customer segments and must properly dimension the possible impact of a recession on such segments. The most effective strategy to contain this risk is to diversify credit sales across major segments and customers. There should be a defined credit limit per customer segment.
- Manage your Costs Effectively
Experts agree that one of the quickest wins under a recession is to cut costs. However, cost structures differ across industries and businesses. You must examine your cost profile to know what percentage is fixed, semi variable or variable. Fixed costs are those cost items which do not change with change in volume or number of outputs, sales or units. They are said to be fixed over a relevant range. These are called committed costs. They include rent, depreciation, license fees etc. Notwithstanding, all costs are variable in the long run.
Variable costs are those cost elements which change as a result of changes in business parameters such as sales volume, number of customers etc. In order to contain variable costs, managers must be able to identify the key drivers of such costs. To manage such costs, you must control the drivers. For instance, to manage your fuel expenses, you must reduce the distance your car travels daily.
Effective cost management requires that you focus on the major cost lines that are variable within the relevant range of activities. Focusing on the most significant variable cost lines can provide levers for profit improvement and enhancement of your financial performance. Stop every activity that is not a value driver for your business in a period of recession.To do this, and do it well, you must clearly define what “value” means to you. Value analysis, is therefore central to havingan effective cost containment strategy.
Shedding workforce may seem like the lowest hanging fruit, but the truth is that this measure should really be the last option open to you. Staff cut can be counterproductive both in the immediate and at the turn of events. It has the potential of weakening the confidence and commitment of the surviving employees. When the economy rebounds, you will be faced with staff shortages, and high replacement cost in terms of recruitment expenses and learning curves. Therefore, managing staff cost should be a strategic agenda of your business. Businesses must design recruitment policies that adequately protect it against indiscriminate hiring leading to excess workforce. Full time employees may be complemented with a squad of contract staff whose employment terms are renewable yearly.
- Provide Excellent Customer Service
Attracting and retaining customers under a period of downturn requires customer service qualities that not only meetexpectations but wows the customers. The nimbleness of small businesses coupled with the inbuilt flexibilities in their operating systems enables them to provide tailor-made services to their customers all year round. SMEs are able to maintain close contact with their clients and can also effectively track their lifestyle.
Keeping a close contactwith your customers is a prerequisite tool to having an excellent customer service. You can do this by sending constant messages to keep yourself in theminds of customers and making them feel you care about them. This is much easier for small firms than for big conglomerates. Your operating margins may shrink, but you need to hold on to your customers at all cost.
- Incentivize your Employees for Customer Acquisition
As recession bites harder, it is possible for small companies to acquire more customers who may be looking for smaller and cheaper providers of their product/service needs. Remember that what some blue-chip companies may be selling is their brand, and not utility. So higher prices may not necessarily translate to higher quality or better utility. In periods of recession, many customers seek utility rather than prestige and packaging.
Customer acquisition will be further enhanced if you provide incentives in form of bonuses and commissions for employees who win new clients. Acquisition and retention of new customers is the key to surviving the recession.
- Be innovative
Creativity, intellect, vision and experience are levers of success for small businesses under economic meltdown. Emotional intelligence, technical skills, competence and a mastery of the digital world will count as a major point of departure in the business climate of today. Where these features manifest, they enhance the ability of the company to employ the steps discussed above to win in the market. Winning is the only option for you.
- Keep the presence of God
Finally, and most importantly, you must keep the presence of God all the time. God’s promise to bless the works of our hands is not absolute. The scripture tells us in Psalm 1 that those who work in the way of the Lord shall be like trees planted by the rivers of water that bear fruit in and out of season, and whose leaves will never wither. We have a duty to do things in the way that God teaches. Our father in heaven is a just God and He expects us to do our business with fairness and justice. We must neither cheat our customers nor maltreat those who work for us. When we play by the principles of God, then the words of Psalm 1 will be our portion.
NB: Mark Oguh, a Fellow of Institute of Chartered Accountants of Nigeria and a Financial Management Expert wrote in from St. Anthony’s Parish, Gbaja, Surulere, Lagos. Contact email@example.com
The World Bank says substantial progress has been made to reduce global poverty in the past few decades. Its report claims that between 1990 and 2011, global poverty was reduced by half to 14.5% (or about 1 billion people) of the global population.
The same report shows that sub-Saharan Africa recorded 46.8% rate of poverty prevalence. This translates to about 415.4 million poor people in the sub-region. The global standard for defining poverty is the number or percentage of the population living on less than $1 (approximately N200) a day.
In effect, poverty has nothing to do with the number of people flying private jets but a lot to do with the number of people not sure of the next meal. This is where successive Nigerian leaders have always got it wrong.
An economy worth about half a trillion US dollars is a very big one. Nigeria has one of the fastest growing economies in the world. Oil and natural gas resources play a significant role in her economy. Nigeria is the 6th largest producer of crude oil in the world; the 8th largest exporter of oil and has the 10th largest proven reserves of the commodity. After the rebasing of the economy early 2014, the National Bureau of Statistics (NBS) announced that the nation’s Gross Domestic Product (GDP) was about $510 billion.
This makes Nigeria the biggest economy in Africa. This notwithstanding, the World Bank Report on poverty situation in the world, released May 2014, ranks Nigeria as the 3rd poorest country in the world after India (home to 33% of the world’s 1.2 billion poor people), and China (13%). Nigeria accounts for 7% of this number. The question is, why should a country so blessed rank among the poorest.
The reasons are many The World Bank identifies corruption, harmful economic and political systems, insecurity, human rights abuses, inefficient and ineffective government and lack of respect for the rule of law, environmental conditions and population growth as the major reasons for the level of poverty in Nigeria.
In my view, one can conveniently say the primary cause of poverty in Nigeria is lack of“shared prosperity”. Ten per cent of Nigerians control over 90% of the nation’s wealth while the rest watch in utter helplessness, and dismay. The wealth of the nation does not trickle down the chain. The rich gets richer, while the poor get poorer. The drive to grab and loot the common wealth has reached a feverish pitch.
The poverty level in Nigeria has nothing to do with population. A lot can be attributed to the weak justice system which is a direct impact of the endemic corruption in the land. According to President Muhammadu Buhari, corruption distorts the economy and worsens income inequalities. United Nations Children’s Fund (UNICEF) says although Nigeria is rich in natural resources, its economy cannot meet the basic needs of the people. The Fund says such disparity between growth of the GDP and the the nation left every other thing and followed oil wealth.
Reducing poverty requires ambitious actions of government and people across the land. Providing an enabling environment for enterprise, infrastructural development, entrepreneurial support services, and access to fi nance remains the surest ways to pull Nigeria out of the poverty trap.
A report says Nigerians spent a whooping N1.7 trillion on fuel in 2014. Over half of this must have been spent on generators to power companies and households. This is one way the absence of reliable public power supply and lack of alternative energy sources causes extreme poverty in Nigeria. The cost of living becomes exceptionally high with the added burden of citizens providing electricity. Savings and investment suffer as people are unable to provide for immediate needs. Improving energy supply is key to checking poverty and redistributing income in Nigeria.
The high cost of doing business in Nigeria arising from double taxation, harassment by government officials, and corrupt practices are other causes of poverty in Nigeria. Many Nigerians today prefer to import goods and sell rather than invest in local manufacture and expand the productive base of the economy, create more jobs, and reduce the pressure on the nation’s foreign reserves. This reluctance stems from the incessant harassments and highhandedness of government officials who overreach themselves in dubious enforcement of extant laws.
Their sole purpose is to extort money from business men and women in the land. The consequence of this abuse is that most businesses are going under; swelling the number of unemployed youths, and increasing crime rate. The foregoing explains why the recent encyclical of Pope Francis on the climate change should be read beyond the literary context. In the 73-page document, the Holy Father called attention to the harm humanity has inflicted on mother earth “by our irresponsible use and abuse of the goods which God has endowed her”.
We may run into the error of thinking that this call relates only to the consequence of our human actions that lead to environmental degradation. But it demands of us to account for the impact of our individual and collective actions on the environment.
….to be continued
NB: Mark Oguh, a Fellow of Institute of Chartered Accountants of Nigeria and a Financial Management Expert wrote in from St. Anthony’s
Parish, Gbaja, Surulere, Lagos. Contact firstname.lastname@example.org
“It’s not enough to say “we need money in order to grow.” You need to know precisely what
the money is for, how it will earn a return and what your return would be in the worst possible
scenario. This must be based on hard data rooted in business that you’ve already done successfully….”
In the course of my regular consulting with many small business enterprises around the country over the past three years and while discussing financial management challenges with these entrepreneurs, only one issue keeps coming up.
The average business man or woman in Nigeria believes that when you talk about financial management in their business, it sums up to seeking assistance from a bank in form of granting credit facilities. Most Small business owners in Nigeria think that when their business is not doing well, it is because they do not have adequate financial resources to plough into the business concern.
And when they want to scale up, the only option open to them is a bank loan. Time and again, in such sessions from Lagos to Abuja and from Kano to Calabar, I have labored to change this mindset. The reason for this misconception is not farfetched.
The easy excuse for the rampant failures of small and medium businesses used to be the paucity of finance, or high cost of funds, inability to access finance, and all that. The human mind always seeks easy justifi cations. So the average man on the street immediately believes that given more money, he will do better in business. But how wrong they are!
The approach a business will follow to scale up will depend on what the goals of the enterprise are. Business goal is like compass that directs the affairs and forms the DNA of the enterprise. What we choose to do, and how we choose to do it will be determined by what our core objectives are. This is why we always emphasize the place of a properly articulated business plan at the onset of any enterprise. It helps to set a direction for the business. Entrepreneurial experience is like a long voyage. It must anticipate turbulent weather, traffi c jams, terrific wind and possible breakdowns along the road.
Therefore, a business plan must address funding requirement, its timing and the best source of funding to seek at each phase of its life-span. There are various sources with varying benefits and consequences. The business man must be abundantly clear about what all these mean for him. Your strategy must answer the questions:
– Should you seek outside funding for your business?
– If so, what is the best way to approach funding, and
– When is the right time?
The answers depend on what you want for your business and for yourself. One way to think about raising additional funding for your business is through equity participation with other investors. This can\ be a Venture Capitalist (VC) that has the financial resources to invest in your business. This comes with added advantage if the VC has a good track record of experience in a similar business.
It can offer advice and help scale your business in ways that you as an independent, lone entrepreneur might not have experience with. Many do not consider the option of such collaboration with either a VC, or even with long-known associates because of the fear of possible disagreements in the future when business begins to boom, undue infl uences on operating decision making and financial records, as well as imminent hostile take-over. Hence, bank loan is usually, and often wrongly, considered the best option.
Don’t get me wrong. Bank credit facility is good. It is desirable, and will definitely help propel businesses forward. But there are basic factors that must be in place to guarantee a good and lasting experience with bank loans.
Basic financial management skills When a client tells me “I am having fi nancial difficulties in business” such a client always concludes his/her story with… “so I need a loan to support my business”.
I always explain to such a client that fi nancial difficulties in business are like symptoms of a malady. They are not the illnesses in themselves. So we need to find what the problem is. Most often, it is poor financial management skills.
Capital protection requires basic but strong financial management capabilities, and discipline. Financial management incorporates financial planning, controlling and decision making. Most small business owners often engage in fi nancial decisions without financial planning and controlling. This is what leads to fi nancial disaster.
When you seek to raise additional funding through a bank loan, you are making a financial decision. In making such a decision, you ought to anticipate various scenarios that could play out, and at the same time identify mitigating actions. When there is no plan, there is no control?
Some evidence of poor financial management skill among the clients I have met include,
– Failure to understand the difference between revenue, profits and cash.
– Providing spontaneous financing to bigger companies without knowing it.
– Playing on both sides of their own balance sheet.
– Granting excessive credits to their customers and suffering from cash fl ow problems.
– Lack of adequate and proper financial information due to absence of any accounting systems and records. They always consider these as unnecessary overheads.
– Expansion into unfamiliar businesses without proper counseling or business plan.
– Always managing personal and business finance seamlessly without separating one from the other, and by so doing failing to identify when business capital is being eroded by personal consumption and ostentatious living.
– Borrowing for the wrong reasons, and at the wrong time.
– Entering into contractual agreements without assessing the financial consequences and how such agreements limit their scope of operation.
– Diversion of business proceeds to personal needs.
– Unnecessary showoffs which manifests in making donations from the business capital far beyond the personal capacity of the business owner.
– Most SMEs are owned and managed by one individual who initiates ideas, analyzes, decides and implements same alone.
They lack the benefit of deferring opinions and deeper thoughts that a functional Board of Directors or management team brings to bear on corporate decision making process which leads to optimal decision making and enhances corporate performance.
These deficiencies are the root causes of financial distresses small businesses always face. As long as these conditions remain, no amount of additional funding, either from equity or loan sources will be able to bail out the business.
This is why I believe that the various interventions by the Federal Government through development finance institutions like the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Bank of Industry (BOI) and Industrial training Fund (ITF) in conjunction with the Central Bank of Nigeria (CBN) is a bit misplaced, and amounts to putting the cart before the horse. Managerial Capacity building through the Business Development Service initiative of SMEDAN and its sister agencies ought to have preceded the institution of the N220 Billion Micro, Small and Medium Enterprises Development Fund (MSMEDF). Putting the latter ahead of the former will not produce meaningful results.
This column recommends that small and medium scale business owners need to engage the services of a Business Development Services partner, consultants or mentors to work with, if the above stated deficiencies are to be eliminated, and the capacity of these businesses enhanced. It is obvious that small businesses can hardly afford highly qualified Accountants, Treasurers, management experts and other professionals it may require to drive its affairs.
Business Support Partners and Management Consultants can provide the required technical support, advice and entrepreneurial mentoring that small business owners require to survive.
These services are provided cheaper and more effi ciently than using full time employees, especially at the developmental stages of the business life cycle. Understand the full implication of the loan agreement Borrowers must pay attention to the details of the terms and conditions of the loan. Cash fl ow projections, incorporating every possible scenario simulation is essential to ensure that the business will be able to meet the repayment terms. In preparing such projected cash flow statement, the borrower must be completely at home with the interest rate and related loan processing and management fees, timing of repayments, the amortized cost balances at each time.
In addition, the ability of the borrower to repay is predicated on its ability to generate sufficient cash flows at the appropriate time to meet the time lines for the loan. This presupposes that the borrower must be sure of the revenue it can generate and the cash thereto. Sales do not translate to cash except sales proceeds have been received, thereby increasing cash at hand or in the bank.
The borrower must know the length of his operating cycle which is the time it takes to convert raw materials to cash. To generate sufficient sales, the borrower must also be absolutely clear that it has the right market share to support the projected sales.
The cash flow projection must also incorporate all possible cash out fl ows in form of daily operating expenses, and salaries that must be paid out of cash from sales. The timing of these outfl ows is also a critical factor to bear in mind. It must also be remembered that increase in sales may require increase in operating costs where some of the costs are variable or beyond the relevant rage of activities where even fi xed costs will become variable, giving rise to additional investment in capital expenditures.
In some instances, borrowing customers do not even clarify the type and nature of loan processing and management fees, the timing of payment of such fees, which often times are charged upfront, thereby reducing the net cash flow from the loans to the customers. They lack proper understanding of the clean-up cycles and so they default on the first repayment.
The most popular reason small businesses make loan requests is “to meet working capital requirement”. I bet you, most of the people making such requests do not have the faintest idea of the meaning of ”working capital”. You end up with a situation where such borrowers borrow to support their wasteful managerial practices of granting excessive and unwarranted credits to their buyers, and funding the operations of their suppliers through spontaneous financing, increasing inventory levels and other inefficiencies that impair the company’s ability to deliver profi table growth.
To borrow for working capital, the businessman must identify which item of working capital it wants to fi nance. The length of the company’s operating (or asset conversion) cycle should be properly analyzed and where there are ineffi ciencies, these must be eliminated.
What about the existence of demand? The only reason any business man should be seeking funding would be to meet current and potential demand. Only businesses operating at excess capacity need to borrow. Demand must be real, and not wishful.
How do we confi rm that the demand exists? Demand is the only reason for production. Economists say that production is incomplete until what is produced has been sold. The thirst for increased funding must be driven by existence of real and potential demand for your goods and services. Any effort to raise finance without ensuring that customer patronage is strong will lead to increased inventory levels, tying down huge and expensive funds, lowering of return on investments, risk of obsolescence, theft, illiquidity (absence of cash to run the business), as well as ultimate default of the loan repayment terms.
Creating and sustaining demand for your product requires consummate efforts at providing quality products and services, matching competition, active marketing and sales orientation, passion for excellence and integrity in business, being known for keeping your word, maintaining consistency of purpose, and strong customer service.
NB: Mark Oguh, a Fellow of Institute of Chartered Accountants of Nigeria and a Financial Management Expert wrote in from St. Anthony’s Parish, Gbaja, Surulere, Lagos. Contact mark. email@example.com
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Linda (not real name) hadbeen the ideal worker,always willing to take on new projects, work long hours and weekends–until last year. Therewere subtle changes at first. Her demeanor turned from alwayspositive to a growing streak of negativism.
She began to have problems sleeping.
She felt frustrated with a lack of progress within the fi rm, and a growing sense of no longer being a part of the team. She started to use sick days for the first time — some for a nagging number of illnesses, some for “mental-health” days. Luckily for Linda, she had some friends who recognised the problem she was suffering from was job stress.
What is job stress?
Job stress is something we all face as workers, and we all handle it differently. There is no getting around it. But, not all
stress is bad, and learning how to deal with and manage stress, is critical to maximising our job performance, staying safe on the job, and maintaining our physical and mental health. For workers like Linda, infrequent doses of job stress pose little threat and may be effective in increasing motivation and productivity, but too much — and too prolonged — can lead to a downward spiral — both professionally and personally.
Some jobs, by definition, tend to be higher stress. Such jobs include ones that are in dangerous settings (fire, police), that deal with demanding customers (service providers), that have demanding time pressures (healthcare), that have targets marketing), and that have repetitive detailed work (manufacturing). However, stress is not limited to any one particular job or
According to the National Institute for Occupational Safety and Health (NIOSH), part of the U.S. Department of Health and Human Services, job stress, now more than ever, poses a threat to the health of workers – and the health of organisations.
NIOSH defi nes job stress as the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker. Stress also occurs when the situation has high demands and the worker has little or no control over it. Job stress can lead to poor health and injury.
Symptoms & warning signs of job stress
While the causes can be something other than job stress, other common symptoms and early warning signs of job stress and burnout include:
Physical problems (headaches, stomach
Causes of job stress
There are two schools of thought on the causes of job stress. According to one theory, differences in individual characteristics, such as personality and coping style, are best at predicting what will stress one person but not another. The focus then becomes on developing prevention strategies that help workers fi nd ways to cope with demanding job conditions.
The other theory proposes that certain working conditions are inherently stress-inducing, such as fear of job loss, excessive workload demands, lack of control or clear direction, poor or dangerous physical working conditions, inflexible work hours, and conflicting job expectations. The focus then becomes on eliminating or reducing those work environments as the way to reducing job stress.
Job strategies for managing stress
While many of the methods of preventing job stress need to be developed and supported by the organisation, there are things that workers can do to help you better manage job stress.
Tips for dealing with job stress
1. Put it in perspective. Jobs are disposable. Your friends, families, and health are not. If your employer expects too much of you, and it’s starting to take its toll on you, start looking for a new job/new employer.
2. Modify your job situation. If you really like your employer, but the job has become too stressful (or too boring), ask about tailoring your job to your skills. And if you got promoted into a more stressful position that you just are not able to handle, ask about a lateral transfer — or even a transfer back to your old job (if that’s what you want).
3. Get time away. If you feel the stress building, take a break. Walk away from the situation, perhaps walking around the block, sitting on a park bench, taking in a little meditative time. Exercise does wonders for the psyche. But even just finding a quiet place and listening to music on your camera, iPod or other device can reduce stress.
4. Fight through the clutter. Taking the time to organise your desk or workspace can help ease the sense of losing control that comes from too much clutter. Keeping a to-do list — and then crossing things off it — also helps.
5. Talk it out. Sometimes the best stress-reducer is simply sharing your stress with someone close to you. The act of talking it out – and getting support and empathy from someone else — is often an excellent way of blowing of steam and reducing stress. Have a support system of trusted people.
6. Cultivate allies at work. Just knowing you have one or more coworkers who are willing to assist you in times of stress will reduce your stress level. Just remember to reciprocate and help them when they are in need.
7. Find humour in the situation. When you – or the people around you — start taking things too seriously, find a way to break through with laughter. Share a joke or funny story.
8. Have realistic expectations. While Nigerians are working longer hours, we can still only fi t so much work into one day. Having unrealistic expectations of what you can accomplish sets you up for failure — and increased stress.
9. Nobody is perfect. If you are one of those types that are obsessed over every detail and micromanage to make sure “everything is perfect,” you need to stop. Change your motto to performing your best, and leave perfection to God.
10. Maintain a positive attitude (and avoid those without one). Negativism sucks the energy and motivation out of any situation, so avoid it whenever possible. Instead, develop a positive attitude — and learn to reward yourself for little accomplishments (even if no one else does).
Your health is everything. You need to take care of yourself, and no job, customer, or boss is worth putting yourself at risk. Find a way out through one or more of our tips. Take control of your situation — and fi x it — and you will have better mental and physical health, as well as better relationships with the people around you.
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Rt. Rev. Msgr. (Dr.) John Kanebi Asuquo Aniagwu is Vicar General, Catholic Archdiocese of Lagos, Episcopal Vicar Ikeja Region and Parish Priest of St Leo’s Catholic Church Ikeja. In this chat with Nigerian Catholic Reporter, he talks on the problem of unemployment, the power sector, job creation and poor funding of education in Nigeria. He also counseled Christians on how to vote in credible leaders into offices and how to cope in a distressed economy.
What would be your recommendation to Christians in the face of the present economic crunch in the country?
Christians should keep on praying to God that He would turn our situation around and that the economy would improve. We should also pray that the managers of our economy will do the right things with our resources by channeling resources where they would benefit the masses more. Specifically more attention should be paid to job creation to ensuring that people are gainfully employed.
Another area that requires the urgent attention of the managers of our economy is the power sector. Electricity is a key factor to development. If we have steady power supply, a lot of people can be self-employed. They can create their own businesses, production will increase, and industries will grow and employ more people.
It is quite unfortunate that a lot of parents are out of jobs today. Many of them cry to us here every day for all manner of assistance especially in the areas of provision of school fees for their children and wards, payment of house rent; sometimes for things as basic as feeding, which is heart wrenching. We cannot do much as a Church. We do not have the type of resources that are available to government to be able to help these people. We do the little we can, but I must confess that we can only do very little.
One would wish that governments at all levels would channel our resources towards meeting the needs of the people in the two areas that I have mentioned – power and employment.
What is your advice to the youths?
Youths cannot do anything when there are no opportunities for them. There are very limited opportunities for them to get employment, or to gain admission to higher institutions. We can only plead with them not to react in negative ways by going into crime.
In a situation like this when opportunities for young people are severely limited, the temptation for them to go into crime is very strong. It is very easy for some unscrupulous people to recruit them into fraudulent practices or into more criminal practices like armed robbery, kidnapping and even cultism.
For the ladies they could be swayed into prostitution. Our youths should do all they can to resist the temptation. They should stick to the straight and narrow path until it should please God to improve the conditions of living for everyone. They should not use their skills in the faces of the challenges they are facing to deviate into criminal activities. They should continue to resist all temptations and look up to the Lord.
But like I said, it behooves on those who are in charge of the economy of our nation to create an environment where the youths can be gainfully employed. An idle mind is the devil’s workshop. If our young people are not gainfully employed it can be very difficult to get them to stay on the straight and narrow path.
The truth of the matter is that the opportunities for young people to be gainfully employed are very limited. Some go as far as obtaining Master’s and Doctorate degrees and yet there are no employment opportunities for them. This is unlike in our days when there were employment opportunities for us even before we finished school.
What is your advice for those who run our educational institutions?
Good education is necessary for the development of people and nations. Government owes the duty of providing basic education to the people. UNESCO has even provided that for any nation to develop, it must as a matter of routine commit at least 26% of its annual budget to education. Nigeria is not meeting this commitment and therefore education is suffering.
If leaders and rulers can devote more resources to education then there will be better education in the country especially for the poor ones who cannot afford private education. People who can afford private education either in Nigeria or abroad have no problem but it is the masses who cannot afford private education that are having problems. As a result, they attend schools that are poorly equipped and poorly staffed. The result is that when they come out they are not educated. They are actually illiterates.
It is for those in authority to commit adequate fund to education. The nation can afford good public schools that are properly equipped and employ the right staff.
How should Christians react in the face of this kind of challenges?
Christians should pray that God will intervene in our affairs by giving us the right kind of leadership, as we pray in the Catholic Church – “leaders who care for us and who would lead us in the path of peace, prosperity and progress.” Nigeria has never been blessed with such leaders. As Christians we should go on praying that God would give us such leaders in the immediate future, not in the distant future. As Christians, our greatest weapon is prayer.
During elections, Christians should go out and vote massively to see whether they can elect credible leaders. The sad thing here is that in Nigeria so far, our votes have never been allowed to count. If they are going to give us free and fair election we should go out and vote according to our conscience – for leaders that can really help solve our nation’s problems, forgetting ethnicity, language and even religion.
If we have a broad minded person contesting for Presidency that we believe will not be a religious bigot, I wouldn’t mind voting for him even if he is not a Christian. But if it is someone that I see may want to favour Islam over Christianity, I will not vote for him.
The year 2015 has been predicted to be a difficult year. The reasons for this negative prediction are not far-fetched. International oil price has dropped below $50/barrel. Oil is the main driver of Nigeria’s Gross Domestic Product (GDP). GDP measures the size of the economy.
The revenue base of the Nation is highly skewed towards oil revenue. Little wonder then that the current southward trend in international oil prices impact negatively on the economy. A downturn in the economy definitely affects general consumption and purchasing power. This will impact aggregate demand.
Therefore, businesses will normally witness slowdown in sales and profitability in a period of recession like this.
When the going gets tough, it is said that the tough also gets going. The key to attracting and retaining quality customers in and out of recession remains great customer service. Passion for excellent customer service should be at the Centre of your business strategy this year.
To be effective, the business strategy must be communicated to every member of staff, internalized and shared by all and sundry from the man at the gate to the Managing Director.
The first step towards guaranteeing great customer service that exceeds customers’ expectation is team spirit. If all departments and staff do not work with each other as one team pursuing the same goal, it will be difficult to achieve harmony in how customers are treated. Production/operations departments and Sales and marketing department must share same attitude and behavior towards the customers.
While businesses must strive to offer the best products and services than the market/competition, ability to deliver such promises must be ascertained. It is better to under promise and over deliver, than to over promise and under delivered. Consistency in quality service implies that businesses always keep their words.
Effective customer services demands investment in people and machines. There should be no cutting corners if you truly want to consistently deliver quality to your clients. Just like individuals should improve their talents if they want to succeed, businesses must sharpen themselves by the use of technology to improve on service delivery.
An upgrade of your production infrastructure may be necessary to meet the current taste of your clients. Training staff to use the new technology to improve service efficiency is imperative. In addition, staff must be trained on good customer service and engagement. In today’s world, the use of social media as the fastest means of customer engagement cannot be over-emphasized.
How you communicate through social media should concern you as a business owner. The company can easily suffer reputational damage if unwholesome messages are released through such platforms using the company’s identity. Facebook is one platform that you must be careful about.
As a businessman, you must appreciate the true value of a customer, which Andrew Reid says goes beyond their wallets. Customers are willing to provide attention, data and opinion that will go a long way to drive quality customer service if the business will understand the true value of the customer.
How do you deal with customer Com¬plaints? Do you just consider such customers as troublesome ones? Do you investigate their complaints and quickly get back to them? Truth is; it is only customers that love you that will complain about poor services. Others will simply take a walk. Research has shown that one dis-satisfied customer will certain cost you eight others.
Customer preferences and tastes are dynamic. This must be closely monitored and responded to. The market and the entire business environment change with time. You must offer the type of product and service that is consistent with today’s demand. Otherwise, your offering will be out of tune with today’s realities.
Richard Branson (founder of Virgin group) says “if you wish to win in business, make sure the customer wins also”. You must ask the question about what customers’ needs your product/service are meeting? How do these products/services serve the customers’ needs? Branson says if you get into business only to make money, you won’t. But if you try to make a difference, you will find success.
Business success reflects in sales volume and profitability – sustainable ones at that. What the foregoing means is that you must not set profit target as an end in themselves. The mantra should be to “seek first to offer consistent and reliable customer service, and every other thing shall be added on to you”.
You have got to build sustainable relationships if you are to attract the greater share of customers’ value. There are two surest ways of doing this: Be personal and customize your services according to key customers’ needs and preferences.
Some businesses treat customers as mere nominal phenomena. They forget that customers are not just data as delivered by CRM vendors, but humans with both social and psychological features. Time is gone when we think that one-size-fits-all service models still work. There is need for personalized services. Bespoke services are the in-thing if you want to make a difference in the market place.
Most people make the mistake of focusing only on financial gains in every encounter with customers. Experts advise that in pitching for any sales contract or customer acquisition exercise, focus more on what the client stands to gain by buying your product or service, rather than beclouding your mind with the inordinate quest for profit.
In the bid to secure sales and profitability, most sales people fail to even under¬stand what the client’s pain-point is. This is a sure way to deliver the wrong solution. But if you pay attention to the major reason why the client is looking for a new service provider or product, you will gain insight into how best to serve the new client.
Just as no idea is a virgin, every new customer you have has been someone else’s customer before you. A satisfied customer will not only guarantee repeat buys, but will also give you referrals to friends and associates, thereby maximizing the life-time-value of such a customer.
This year, can you measure the sales and profits from existing customers? Remember we said in our last edition of this column that whatever goal that you set must be measured. Setting goals on customer satisfaction is crucial this year 2015, and the best way to measure this should be sales from existing customers, which includes repeat buys. You also need to track the value of referrals from existing customers.
NB: Mark Oguh, a Fellow of Institute of Chartered Accountants of Nigeria and a Financial Management Expert wrote in from St. Anthony’s Parish, Gbaja, Surulere, Lagos. Contact mark.oguh@ gmail.com
Image credit: Bazar