Restructure education to support entrepreneurship, and provide funds with low interest rates for small businesses to thrive – Ada Osuagwu
Running a business in Nigeria, especially in the service or manufacturing, requires extra effort from the owners to meet up with customers’ demand and to constantly initiate new sales models to keep the business afloat. To keep up with these obligations, small business owners in the country are faced with a high rate of infrastructural deficit, banks’ double-digit interest rate on loans, multiple taxations, lack of economic policy implementation and weak foundation on entrepreneurial skills in the country. Most small businesses run at a loss – the little profit from their business is used to provide essential amenities, such as electricity. ADA OSUAGWU is a small business owner; she is managing partner of De Laundry Centre and Executive Director of Qualis Business Support Services (a Human Resource consulting firm). In this interview with KENNETH AFOR she shares her experiences as an entrepreneur.
Who is an entrepreneur?
An entrepreneur is someone who creates a business, creates wealth by providing services and solving problems to be able to make money and make profits.
What are the things needed for entrepreneurship to thrive in the country?
Stable policy; if the government can create an enabling environment, providing funds with very minimal interest rates for a longer time so that business owners like us can have access to grow. When I say funds, it’s not that when I am given N3,000,000 you ask me to pay within the next year with a double-digit rate, that is what kills businesses in Nigeria. Our banking sector hasn’t gotten it right. The banking system, in my own point of view, is set up to kill businesses and not to support businesses because all of them are focused on the oil and gas, real estate, nobody is looking down on the Small and Medium Enterprises (SMEs). These are the businesses that have been providing employment. By the time we employ 1, 3, or 4 unemployed youths from the streets and we are stable with them, banks will recruit 200 and next year they sack 100, but MSMEs are actually the ones that grow the economy. But the policies are so unstable; like in Lagos where we have multiple taxations. At the beginning of the year, the local government will come with their demand of fees for business premises, LIRS will demand payment for the same business premises and the Federal Government will come as well. There is no policy to actually support SMEs to thrive.
How has the government performed in providing the needed infrastructure for entrepreneurs to survive in the country?
Starting from our educational system, it does not train you to be independent when you leave school. Maybe these private universities that are just coming up now are trying to model their curricular after the ones abroad. I went to a federal government university; University of Nigeria, Nsukka, (UNN), I took an elective course; computer 301 and 302 and I didn’t see any computer throughout the two semesters I did the course. The fault is first of all from our educational system, we are taught to graduate from school and look for employment.
Ideally, entrepreneurship should be a general course till you graduate, so that by the time you are preparing to graduate if you do not get an employment you should start something on your own. You don’t need to wait to get employed, but, unfortunately, our educational system does not support entrepreneurship. I read English and today I am washing clothes for people. Ideally, one should think with my English degree I should be teaching or working in a media house, but that is not my thing. University just broadened my horizon. So, our educational system is faulty. It doesn’t prepare one for any form of entrepreneurship; no matter the course you are studying, the system does not prepare you for entrepreneurship. It’s just to prepare you to have this knowledge and come out to look for a job.
Secondly, I think that this thing we call internship, it is not robust in Nigeria. Abroad, students, as they are going to school, they are given some hours to work to get some experience, then they make provision for some to work, so, with that, you start it early. Assuming there is a student who comes in here to do intern, he can pick interest to the point that when he finishes he can decide to start his own laundry because they’ve been prepared from school. The so-called Students Industrial Work Experience Scheme (SIWES), because there is a mark attached to it that is why students go through it just to get the mark at the end, not necessarily for the experience on the job. Ideally, they should be understudying what the companies that they are attached to are doing, know exactly what the business is all about. Even those in full employment, somebody can be in a department, and he has no clue what the company is doing except that thing they are doing on their table. So, in the educational system, there is no provision for entrepreneurial study, in schools. They should make provision for internship, no matter the course you are reading there should be internship on that course, you should have a time when you go to work on the course you are studying so that you can gain those experiences and be able know more. I wish we can reach a point whereby when graduates can’t get a job they will not be bothered, they would be able to start something on their own because of the entrepreneurship training they have received while in school.
Can an entrepreneur survive without government’s support?
We have been surviving without support. If there is anybody doing business and running it effectively that person should be applauded. It is a daunting experience to do business in Nigeria. Where is the support? I just put on my generator now, I have my power (electricity), I have a borehole water system supplying me water for the business. I have lived in Lagos since 1996, I’ve never been a beneficiary of public water, I don’t know where it comes from, I have two generators, a big and small one to make sure that I’m not cut off with power, where is the government support? I’m doing all these to make sure that my business is standing, no support from anybody, the only support they could have given me is a loan but the loan is killing.
How did you get into the business?
I got into the business because, at some point, I felt that I needed to do more for myself. I worked for 16 to 17 years on salary and I wasn’t fortunate to get into all these multinationals. In a space of 17 years, I had worked for eight different organisations, some good and some bad. At some point I said no. After my last job, which was a very good job and I enjoyed every bit of it, I was the group head, managing Human Resource for this organisation; which was a very big organisation with 350 staff, it was a big challenge and I loved it. But I said oh, if I could do this on this job I can do much more for myself if I am outside. Then I wasn’t thinking of starting an HR consulting firm, I wanted to do something for myself and how did I get into the laundry? My husband and I, the person that comes to wash for us, my husband pays him about N12,000 a month for washing our office wears and I was just thinking about what can I do? I said if this person is just washing for us and he is collecting N12,000 from one family, I can do this for all of my friends, and by the time I collect at least N15,000 from them all in a month at least we should be talking about N250,000, which was almost close to what I was collecting as salary at that time. Then I said it’s good, we can do it, that’s how I started.
It came with a lot of challenges because the industry then was filled with mostly unskilled workers; both those washing and ironing the clothes are not graduates, with those levels of workers with you, you are going to have mad challenges. Our first two years, I really had a lot of challenges with the staff, especially getting the right people to do the job and getting them to stay maybe because they are unskilled, they don’t stay, they are just like rolling stones. So, when I stabilized and after I have gotten a hang of it I became bored, I will be sitting here doing nothing, they will be washing and ironing, occasionally I will go inside to check what they are doing and I will come back to sit down. So, my friends will call me to sit in for an interview for them, so I will sit down and I make the selection for them. When I say this is the right person to hire it will turn out to be the best person and they will give me some amount of money like N5,000 to N10,000 to refuel my car. Within a couple of months, I said I can do this professionally, then I registered the company (Qualis Business Support Services). My first big job came from my former boss, I will still give her that credit. I called her and told her that I have started my consulting firm in case if there is anything in that HR space please let me do it for you. So, she gave me her HR manager’s contact who gave me a very big job. At least, I recruited in quick succession about five workers for them, she gave me another contact of her friend who gave me a bigger job and I said this is good. From then on friends started using me to recruit for them, and just a year plus, I have recruited staff for fifteen companies.
If you were given the opportunity to meet with the president as an entrepreneur, what would be that one request you would ask of him?
The first thing I would request from him is to provide an interest-free loan for businesses, not just businesses but for businesses with the potential for growth after they might have been analysed and checked by consultants. An interest-free loan with maybe four years duration for repayment and after they finished paying they should be given another loan. And also, a lot of support, some sort of tax waivers for entrepreneurs during a four years period until their businesses are well established. This would encourage a lot of graduates and unemployed to go into business. Some of them have the intellect to work. There is a young girl I interviewed this morning, I couldn’t believe it, she knows so much, she has a lot of potentials, I engaged her and encouraged her, I believe she will do more. If the president helps me and other entrepreneurs and we are growing, I can employ more. That employment they said they want to create is not from government jobs, it’s through entrepreneurs.
How have financial lending institutions helped in providing credit facilities for MSMEs?
They’ve not helped. A couple of times, I have tried to get a loan from one of the banks; I was able to get N900,000 at a ridiculous interest rate. I couldn’t come out of it, really could not pay. How would you deal with a 27 percent interest rate? From what I read, abroad, their interest rate is single-digit rate, for new businesses like us, they give you some months free to be able to gather yourself but Nigerian banks will give you loan today and after one month, they are already on your neck, if not possible you will die because of the loan. They are not set up to support businesses, they have already factored all the money they are going to make from the loan, they are not set up to create wealth.
How do you get customers, considering that every street in Lagos you will find a laundry shop?
The sky is big for all of us, we have our unique customers who have been with us from inception. I’ve been washing clothes for them for four years, they don’t have an idea where I am located. What we do is that we pick up clothes from them and deliver to them after washing. A couple of my customers have walked in and they were impressed with the service and we have some that we do bulk SMS, we also take advantage of the social media as well where we occasionally talk about what we do so as to attract people but most of my customers, about 45 percent of them don’t know where my office is. So, we assure them of picking up their clothes, wash it and have it delivered to them at home.
What is next for your business?
My plan is to expand because I have just one outlet, I’ve not been able to muscle out fund to open another outlet and I am not going to ask for a loan; no, I will not do that, I won’t sustain it. I’ve tried to do it before and it almost killed me.
Tell us a bit about Qualis Business Support Services and how it all started?
It all started as a fluke. So, I said if I am helping friends with their interviews on workers to recruit and I get feedbacks that those I recommended turned out to be the right people for the job, so I registered the company and I started reaching out to friends like my former boss who directed me to another person and from there I received contacts from other heads of organisations around and since then it’s been awesome, I can’t even count how many people I’ve put in employment. I get calls from some of those I interviewed, who later got the jobs, thanking me for giving them the job,
Again, the HR profession weighs above the personnel manager or admin manager. HR is deeper than that. There was a company that outsourced their HR management to me, I go there once a week. I get involved in their stock-taking, their processes and draw out plans that will make their operations seamless. My own is not just to hire or when they say I should terminate I terminate, no. What I do is that I make sure I set up parameters to monitor performance, to make sure that the person I hired for you is actually performing. I get involved in their stock to make sure that money is not frittered away. While the managing director is trying to do so much to open branches, he needs someone who is much more experienced, so I work for them as a consultant and truly, I find myself enjoying it.
How has Human Resources (HR) as a profession helped in getting the right applicants for the jobs applied?
When I meet with clients, I asked what do you want? They tell me what they want, I would ask, do you have a gender preference? Then I would ask further, what is that person coming in to do? What product are you selling? Who is your target audience? Once I get these details then I sit down and do a proper person profile, job specification and I send it to the client and they will tell me this is exactly what I want; I will have knowledge of the type of person fit for the job. And also, there are several vacancy platforms where we can post job vacancies on and when applications start coming in I painstakingly open every curriculum vitae (c.v.) to make sure that the applicants I am about to shortlist meets with my client’s specifications and job specifications agreed on and I schedule interviews for them and I forward about four applicants to my clients once the selection is done then they take it from there.
What if an applicant after being employed and along the line he or she is dropping in performance, what do you do?
I step in. when I recruit for my clients I don’t just leave them like that, I always follow up on them to know how they are performing. Occasionally I visit my clients and I engage the staff, I don’t depend only on what the employers tell me. I ask the staff if they are meeting up with expectations or enjoying the job, any issues hindering their performances and stuff like that.
Also, I give my clients three months window period if the staff hired are meeting up with expectations or not and from there I will know what to do; either to change them but since then to the glory of God, I’ve not had any report of such from my clients because in my interview process, I am very rigorous.
What are the things that can keep staff motivated in their work?
Yes, in HR they teach us that money is the greatest motivator but from my experiences I have found out that money is not, you will see someone for three years sit on a salary and he is happy. One thing I would say is that the working environment, people want to be given a chance to prove themselves on the job. I’ve had people whose bosses stifle their intellect, they don’t allow them to express themselves, you want to control their thinking, telling them to do things in a particular way, and you don’t give them the chance to shine on the job. That can be very frustrating. Someone can decide to walk away from the job saying it’s not the salary, that he is choked; he’s not given the opportunity to express himself. Some employers don’t know the difference between home language and official language. If a staff resumes in the morning, you insult and abuse them; it robs them of their self-dignity and they will go to where they will be properly addressed. As little as my laundry is, I have a manager, she handles everything, I allow her to shine, I try not to get involved, unless there is an issue she calls me, I’m giving her an open hand to express herself. Sometimes, when she makes mistakes I don’t scream because I gave her the opportunity. What I do is to tell her no, you shouldn’t have done it this way, next time you do it this way. I don’t run a business whereby I will be the only one saying something, so if they did not hear from me they can’t do anything. What if I am in a meeting, things can be going wrong and you can’t reach me? These are the issues that make people want to leave an organisation. Yes, money can be the biggest motivator but in most cases, not the money you are paying them. They want an environment where they can thrive, career wise, intellectually; they don’t want their minds to be stifled, you are the only one that will bring a good suggestion. They don’t want to be humiliated, rejected or insulted all the time. They want where they can be spoken to like people that came to work, not to be spoken to as if there were your domestic staff. These are the challenges that affect people on the job. Then sometimes people will tell you that they can’t see a prospect of growth when the organogram is not broad, you see yourself not going anywhere, you just leave, and it’s not the salary.
Would you advise managers/CEOs to know a little about HR?
Yes, like in the company I consult for, I organise monthly performance review meeting where we all review our performance for the month or for the quarter, then we also give people chance to express any challenges. I encourage them to speak. If managing director is the problem, say it so that the M.D. would know when to step back. I also try to let my clients who are business owners to know a little bit of HR, so that you don’t get cut up by the law. Sometimes, when they engage them, I tell them my HR is not hiring and firing, before you fire anybody let there be a due process so that when you fire somebody, they don’t take you to court, that is the first thing I explain to my clients. Don’t think that you will call me on the phone and tell me I don’t need this person again please fire him. We have to build a case against the person. If the person is not performing you have to set up performance management system for the person; there ought to be a performance appraisal, you have to set up Key Performance Indicators (KPIs) to know whether the person is not meeting up with performance then we would review it or send query when we’ve exhausted those options then you can tell the person with this time frame if you don’t improve we will disengage you. I make sure they have that knowledge of how things work because if you don’t manage human beings you would run into problems because employees are beginning to get knowledgeable, they know that there is somewhere they can go to seek redress.
What’s your advice for entrepreneurs?
My advice for entrepreneurs is that if you want to be an entrepreneur, passion is not enough to carry you. You have to believe in yourself and make sure that you are solving a problem; if you are not solving a problem you are not doing any business. Whatever you want to do is it solving a problem? After solving a problem, what is your value proposition? That thing that you are doing differently that will attract people to you, if you are selling food, there is something you need to do differently, that is value proposition. It could be your packaging or content of the food, maybe you decide to do healthy meal that has less cholesterol or carbohydrates and more of protein, and it has to be something unique. Then, don’t give up so easily, two years, three years, it’s like you are running around in circles, it will get better. When people see you after a few years that you are still going with the business they will commend you, if the monies are not rolling in as you expected.
You know when you are starting a business your mind-set is that the whole of Lagos is your customers, it’s not going to work like that, you see them giving up. You have to be very passionate, very committed, you have to be solving a problem, if you are not solving problem you are just servicing your passion, before you know it you’ve gone out of existence. Any business you want to set up, you should ask yourself, what problem am I to solve? It is in the cause of solving that problem that people will patronize you. The problem I’m solving in the laundry is I want to help people who are too busy to wash their clothes. My HR consulting firm is I’m helping my clients who have challenges in getting the right people for the job. So, whatever it is that you are doing, make sure you are solving a problem.
Do you have any last word for the government?
We need a lot of support, funding, you can give grants especially women in business. Women with the right support tend to manage a business well. The average woman in business, what is keeping her business moving is to make money for the children and the family. I’m not saying that men are like that, they have siblings and other relations to cater for, but for the woman, it’s just for her family. If women are given the right support in business, they will grow it to become an empire because they are thinking of their children.