I was talking to a friend of mine today and he shared with me how he was able to invest in two small businesses a few years ago. He made a lot of money from those two businesses and one of the small businesses returned its initial investment with them just because they did not have an agreement. Well, that’s not the main reason I’m writing this post. I’m writing this post because most Nigerian small businesses don’t normally accept funding from an outsider or let me say they don’t like the word partnership.
Any time you bring up the idea of partnering with a small business in Nigeria they see it as a threat. They will tell you they don’t need your money for the partnership but if you can lend them the money they are going to collect it. That is why they fall into the trap of borrowing money to run small businesses. Most of the money that they borrowed comes with high interest, which hurts their business more. They believe you are trying to partner with them in a way that you are trying to steal their business, but mostly it’s not like that. It is always a win-win for someone who’s trying to partner with you and a win for you as a business owner.
Risky but profitable
Most people in Africa, believe that they can do it all. They want to be the manager, the supervisor, the cleaner, and they want to be everything in the company. They also want to be an investor in their company and they don’t have money. You see them struggling so bad and when you bring up the idea of partnering with them and using your money to fund their business to scale it they disagree with you because they believe that all they need is self, but that’s not the truth.
If you truly want to make money and you want to go from a small scale to something big, you need people around your business. You also need people’s money to make your business big and this is the more reason why Africans don’t sell their business. We have a lot of small businesses in Europe in most foreign countries that are trying to sell and people always cash out by selling their businesses and use their money to start another business, but that doesn’t happen in Africa even if the business is dying. They know and let it die like that but will not sell it to another person.
It is well
Most businesses that go large scale in Africa that start from nothing are mostly because they are the only ones in the sector or they have the backing of the government. It is almost impossible to see a small skill business go from zero to something big in Africa just because they won’t allow funding from outside and they also don’t have the funds to go big. The people who make a lot of money are big people who monopolize their sector and also have the government's backing.
I believe you have to learn how to make deals that are profitable for you as a business owner and the business. This is one of the things that is hindering the growth of so many businesses in Africa. They are scared to make these calls and scale up because they are also scared to receive funds for partnership, but they prefer borrowing money and this later, puts pressure on their business and does not help their business in any way.
Thanks for your time.
