Elixir for entrepreneurs’ growth phobia

Sometimes when a business grows so fast from introductory stage suddenly stops at the development stage, people wonder what has gone wrong. From a micro, it grows to a small business that can hold its own anywhere; but cannot develop to medium enterprise, let alone a full-fledged company.

This is usually the problem many business face in Nigeria and in Africa in general. The issue most times is not the business, but the management. Some businesses remain at the same level of growth for over decades, with no sign of improvement.

Small and medium-sized enterprises (SMEs) in Europe and America started small and grew into international brands. McDonalds, Walmart, Google,Facebook, and others are today global brands that started by focusing on satisfying the needs of their immediate environment. Microsoft started operation from a warehouse. Facebook was built from the classroom, but something happened to them despite their humble beginnings.

According to the Evening Standard, Google is worth $110.8 billion, and its parent company, Alphabet, is valued at $851.2 billion. Walmart’s net worth is over $386 billion. These companies started as small businesses.

Why are many Nigerian SMEs not growing beyond being local outfits? Aside Dangote Industries Limited, Innoson Vehicle Manufacturing Company, and a couple of other companies that started small,many others are scared to take the growth risk; they suffer from growth phobia.

The reason is fear of the unknown, which is a scary place to be, so much that small businesses prefer to stay in their comfort zones where they have guaranteed survival and avoid murky waters.

This way, they sacrifice the benefits of economies of scale and mass production, which reduces the cost of operation and increases profit. This cost continues to grow and is easily influenced by the business environment because the business itself refuses to grow.

Inflation and increase in tax affects the small businesses more. Government policies are felt more by the small businesses because the big players already have soft-landing mechanisms such asshared resources, partnerships and pool funding among others.

Going concerns work for success because success is deliberate and they can afford to spread costs such as promotion over many brands under the business. In 2018, Google alone budgeted around $1 billion; in 2017, Walmart spent $2.1 billion in 2011.

These companies understand the need to keep growing because the moment there is no room for expansion, anti-climax begin.

The growth of a business is in phases. Some brands do not grow beyond a certain stage until they grow their image beyond their physical size.

This perception enables small businesses to compete with bigger brands almost at the same level, to the extent that customers of the bigger brands sometimes migrate to the smaller brands.

Business perception is more effective than any physical environment because people will rarely seek to know your place of business before they patronise you.

This is where a well-designed public relations (PR)campaign can work magic for smaller businesses that might not boast of a deep pocket to compete with bigger brands.

Customers don’t care how much you spend in the promotion; what matters to them is getting the service and product when they need it. This is what stimulates purchase.

Many still remember the popular Mirinda ‘Three Orange Men’. The PR stunt was so successful that the demand generated for the brand overwhelmed the distribution channel for the product. This benefitted other brands that had promoted their products before then; so when consumers went into shops to demand Mirinda, the shop attendants who had run out of stock because of the success of the campaign offered them products from the competition.

Promoting the business or brand might not translate into immediate sales, but it becomes a marketing tool for sustained demand of the product.

PR offers the best and cost-effective promotional tools to voluntarily elicit purchase from customers.

Small business is built around trust and having deliberate reputation strategies through PR will benefit the small businesses as they seek to buy into the mind share of their customers.

So, with marketing tools like PR and promotion, entrepreneurs’ phobia for growth is greatly reduced, if not conquered outright.