It is an unfortunate part of our reality that Nigerians suffer from several infrastructural deficits that affect our personal lives and our businesses. Two of the most notable of these are electricity and transportation.
There is almost no business that can operate at an optimum in the modern world without relying, even in part, on these services, be that with electricity an essential part of day-to-day activities or transportation needed to move products from place to place. According to a World Bank article, this lack of reliable electricity leads to annual losses to the Nigerian economy of about ₦10.1 trillion. In a PwC survey from 2020, infrastructural deficit was considered the biggest challenge for 15% of surveyed MSMEs in Nigeria. They also discovered that electricity was the biggest to daily operations at 21%, with transportation accounting for 12% of daily expenses.
It is also important to consider how the high cost of these necessities affects the rest of your business. For instance, if you have an agribusiness that requires the transportation of goods, then the increasing price of transportation due to the recent removal of the fuel subsidy inevitably means that your cost – and your selling price – will increase. Similarly, if you run a tech startup but have been dealing with unstable electricity and relying on a fuel-powered generator, you will also be inevitably affected by recent policy changes. Poor or unreliable infrastructure affects the cost, efficiency, and stability of your business.
- Location is always important. In this case, it is prudent to consider a location with consistent electricity, good roads, and easy access to the relevant modes of transportation for you, your staff, and the goods you may be moving. Having reliable electricity reduces the cost of running a generator. Being on a good road with access to transportation reduces the cost of delivering your goods and the overhead of your business. It also means your business is easy and affordable to find if you rely on walk-in customers.
- Many citizens now rely on other sources of power either as their sole source or as an additional stopgap. A popular and reliable one to invest in is solar panels and inverters that allow you to store electricity generated by your solar panels to reuse as needed.
- For businesses with a heavy reliance on delivery and transportation of goods, this might be a great time to ‘go local’. While delivering to customers who are far away might be lucrative, the current costs might outweigh the benefits and many customers are, themselves, trying to save. Cultivating a local market and delivering to them saves the extra transport-related expenditure.
- Other entrepreneurs have changed their delivery businesses to ‘pick up only’. While this puts a lot of pressure on your customers to spend more for your products, it also helps them understand the extra costs you are taking on to serve them. It is worth noting that this is only a good option if you’re selling something essential or have a strong relationship with your customers.