News Column

'Good Ideas Superior to Funding in Running Small Businesses'

August 18, 2014

Chinedu Eze

Former Managing Director/ Chief Executive Officer of Fidelity Bank and Chairman of Council, Nigeria, Netherlands Chamber of Commerce (NNCC), Mr. Reginald Ihejiahi, has said that for small and medium enterprises to grow the entrepreneur must have good ideas before he would be able to secure money from banks to establish and run the business.

Ihejiahi made this known when he presented a paper titled, "Is Compliance with Global Best Practices a Challenge for Nigerian Small and Medium Enterprises?" at the Network with the United States of America forum in Lagos at the weekend.

The former MD/CEO of Fidelity Bank said that an entrepreneur will be able to secure credit facility from commercial banks and other financial sources made available by government agencies for such business if he is able to articulate a visionary business plan, adding that there is high demand for funding so it is the businessman or woman that has outstanding idea that would be able to access credit facility.

He told THISDAY in an interview that in spite of financial provisions made available by government and banks, such funds are never enough because of the high demand.

"You will never have enough of the demands (of funds). At the end of the day it has to come into normal commercial banking system. That is the reality. When you have special windows they will always be rationing and it is difficult to decide who gets what and who doesn't get. Let me say that over and beyond this, some of the issues I raised are what are fundamental," he said.

He added: "For small businesses to endure they have to be run properly and professionally. I think that is where a lot of people miss the boat. Yes, money is important but ideas are superior."

Ihejiahi said what is important is that businesses are run with commitment, clear vision and integrity and also to be abreast of what modern technology can offer to enhance the business.

"The key idea is commitment to have clear vision, to run the business with integrity and to run it in the context of the century: technology and maintaining good records and accounts and to continue to grow. That is really the way a small business can grow," he said.

During the presentation, Ihejiahi said the economic base of many countries, including the Asian tigers like South Korea, Singapore, Hong Kong and Taiwan are the small and medium enterprises, remarking that they have continued to be the foundation of successful economies of these nations.

He noted that in Nigeria there is another challenge, which is the high cost of operating business with business concerns having to provide their own power, their own water, as well as being victims of multiple taxation. They also borrow from commercial banks at high interest rate.

All these, he said, could discourage entrepreneurs. He therefore stressed the need to have a good business idea is important because such ideas and determination can help to surmount these challenges as they would facilitate easy access to funding.

He said there are fundamental conditions that an entrepreneur of small and medium business must abide by to ensure the success of his enterprise. One of such conditions is record keeping. According to him an entrepreneur should pay attention to basic record keeping.

"You ought to set up your own record keeping. This should be done in such a way that it will guide your activities and you should ensure that your account is audited. This is critical because if you go to many places what they will ask you is if you audit your account," Ihejiahi said.

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Source: AllAfrica

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