Every entrepreneur understands the significance of a business plan especially when trying to raise funds from investors. Unfortunately, we pay so much attention to the 20-page document that is supposed to explicitly state how your golden business idea will solve a problem, while forgetting the focus should be on developing a sustainable business blueprint.
Late last year, at a round-table dialogue on easing access to finance for Nigerian entrepreneurs, representatives of the entire ecosystem of enterprise development were present including the entrepreneurs, banks, business consultants, regulators, etc. The entrepreneurs blamed the banks for lack of access to finance due to the required collateral and high-interest rates. The banks responded by saying it was the entrepreneurs who failed to provide a good business plan. The business consultants and regulators also pointed a double-barrelled gun at the banks, blaming them for their stringent conditions to access finance; and also noted that the entrepreneurs lacked the capability to produce a good business plan.
How does the industry then tackle the challenges facing enterprise development? Challenges such as access to market and technical know-how, purchasing the right assets and materials to start and grow a profitable business must be prioritized. The conclusion of the dialogue was entrepreneurs should work with business consultants for training on writing sound business plans, and the government should provide guarantees so that banks can relax on their conditions.
Since the advent of the Integral Banking methodology by some researchers, the perspective on developing entrepreneurs has evolved from entrepreneurs writing good business plans, to developing comprehensive business blueprints that are co-created by the entire ecosystem of any given enterprise.
Integral Banking simply focuses on the most suitable way to systematically integrate the resources and know-how from different spheres in a particular market and industry, to ease access to the right finance. In co-creating a business blueprint, the 4A’s of enterprise development must be addressed including:
Access to Technical Know-how
Technical know-how is the first step towards starting any business. To gain access to technical know-how, the entrepreneur with the guidance of the business consultant and government-related organisations need to identify and obtain the relevant qualifications and training certifications that are valuable in the business, or to partner with an individual who possesses the technical know-how.
Access to Market
You may have the financial, human and technical capital to start your business, but if there is no market for your product or service, or you do not know how to navigate and attract the market to your business, then the enterprise will fail. The question here is how to validate that there is access to the market for your business. There are two types of market – retail and wholesale.
The retail market is where we have the masses, and to validate the readiness and availability of that market, the key factors are proximity to your product or service, the population of your target demography in the market, and the closeness of competition to your business. The market validation exercise should be a joint effort of the entrepreneur and the business consultant.
The wholesale market is where a supply contract can be executed with targeted industrial companies, who will be off-takers of your product or service. One way to establish business-to-business relationships is for the business consultant and the bank to work with the entrepreneur to create avenues to join relevant associations, where the targeted industrial off-takers are members.
Access to Materials
The access to inputs for production and processing will determine the quality of the product or service of the entrepreneur. To ensure access, it is vital to have proximity. This can be done by having access to multiple suppliers within your reach to enable availability and price control. By joining the relevant associations within your industry, you can also determine the kinds of suppliers you need, as well as the quality of the materials used in the industry. This is a role that fits the mandate of the regulators, as well as any government-related organisations, focused on enterprise development.
Access to Business Performance Check
This is crucial because there are many entrepreneurs that believe their enterprise is profitable based on the turnover generated by the business – this is very common with entrepreneurs into distributive trade or service-oriented businesses. The business consultants and sometimes banks, are supposed to act as mentors or partners to the entrepreneurs especially those who are still getting their business off the ground. By acting as mentors, basic financial advisory services are provided towards uptake of cost-effective technology for operational efficiency, screening and recruitment of staff, and the other A’s of enterprise development.
It can be concluded that in easing access to finance for entrepreneurs, the focus should be on what every stakeholder within the ecosystem of enterprise development can offer along the 4A’s, to create a sustainable business blueprint.