CEM INSIGHT | The Micro, Small and Medium Enterprise (MSME) sector has continued to make giant strides in sustaining the economy, especially in the aspect of creating employment and its continual contribution to the nation’s Gross Domestic Product, (GDP).
A recent survey conducted by the Small and Medium Enterprises Development Agency, (SMEDAN) in collaboration with the National Bureau of Statistics, (NBS) in 2022, there are an estimated 39.65 million micro and small businesses in Nigeria employing 87.9 percent of the labour force, contributed 43.31 percent to (GDP).
This implies that MSMEs are the new medium to provide opportunities in driving employment generation and wealth creation as well as income re-distribution within societies. As good as this may sound, many players in the industry are unfortunately behind in making the most of the industry. Many of which have had to shut down as a result of the many challenges encountered in the industry.
The number of young people operating in the online industry sprung as a result of the coronavirus which shut down many physical outlets. From our interactions with many of such online shops, the major challenge has been sales. Although, internet service providers and its high cost of purchasing internet plans also stand as a stumbling block before many online entrepreneurs.
Meanwhile, some have it easier or have gathered enough experience in the industry and can weather the storm better than most.
In our discussion with Somto Agbaegbu, a social media entrepreneur, who is also a Sales Strategist and Business Coach, factors such as lack of proper appraisal of the business model, incorrect assessment of online customers and wrong approach to the sales itself are responsible for abysmal performance in online sales.
Most importantly, according to Somto, the kind of products online vendors offer for sale also determine the result they get or progress they make.
“Many young people who venture into the online business space do not consider all the pros and cons but dash into a line of business based on just ‘trend’. They believe a product will sell just because it is trending.” She said.
Somto spoke out of experience having grown gradually through the process to success in the online space. She ventured into the MSMEs industry as a result of boredom occasioned by the COVID-19 pandemic. She started by baking cakes and selling them online since contact and movement was restricted.
She practically made profit close to nothing when compared to the effort and time she put into it. She only made 20 thousand naira in the first 3 months of her starting the business. However, she got committed more and things got slowly improved and she was able to make a 100 thousand in the entire lockdown period.
“I only made 20 thousand in the first three months of my starting the business. But I continued at doing it and with help of friends I made 100 thousand during the entire lockdown period.”
Revealing how she achieved this fete she noted that the “sales online is simple, but it’s not easy”, adding that it is built on trust and recommendations from satisfied customers.
“I baked a cake for a friend of mine, she liked it and referred me to a friend who in turn referred another friend and the referral kept going.”
She added that she had only 10 views on WhatsApp when she achieved this.
Discussing what she did after the lockdown, Somto reveals that she went back to school and met another student who had issues selling online and charged the student to help drive sales which she did successfully.
The success of this encouraged her to spread her wings to others in similar challenge and she became a sales affiliate to several online entrepreneurs. By this this time, she had stopped selling cakes.
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Discussing why many may not successfully make sales from their online business, she noted that these vendors fail to take many factors into consideration before venturing into the business.
She adds that “if you must do business online, you must first consider your online community. The purchasing power of your community determines to a large extent what you put up for sale.
“Your product must be good enough to be sold and where your products are good enough, your friends and family who make up your community cannot afford or are not interested in it.”
Somto explains that the major challenge many online entrepreneurs experience is trust between them and their intending customers. She explains that online/social media vendors need to carry their followers/viewers along with their activities.
“Your followers and viewers have to know you’re a human being and not a robot. They need that confidence that you’re one of them. Build their trust and confidence in your product through your online activities, this gives them a reason to patronise you.
“You shouldn’t always post just your products, carry people along, let them feel like they know you. Let them connect with your person, that way trust is established.” Somto Said
Furthermore, Somto who is also a business coach and strategist explains that her seemingly overnight success in the industry comes after a series of training.
“I started selling online around June of 2020, and like everyone, in the beginning, I struggled to make sales.
“I made cakes, and I had to depend on all my friends and neighbours to order from me.
“Around Jan of 2021, a couple of my friends wanted to start selling online too, and for a while, they struggled with the same thing. I realized it was a general issue.
“So, I looked for a solution. Paid foreign and locals to teach me how to sell. Tried out some ideas in my head.
“Two months in, I started making a lot of money.
Then, I decided to teach a couple of people from my experience, and their sales improved drastically.”
Since she began training others she has taught and mentored many small business owners. Her training materials are on digital platforms like Selar.
She stressed the place of training as a therapy for success in any business venture adding that “if you are not making sales and someone else is, that means you’re doing something wrong.”
She adds that the best platform for intending online entrepreneurs to start is WhatsApp.
“WhatsApp is the best and most convenient placed for new online entrepreneur to start their an online business before moving to other social platform. This is because contacts on WhatsApp have to save one another’s contact to see their activities, which makes it easier to gain their trust and convince.”
Somto is presently a 200-level student of human physiology at the University of Nigeria.