Business blueprint for sustainable entrepreneurs: Integral banking for the common good   

Business blueprint for sustainable entrepreneurs: Integral banking for the common good  

Everyone wants to read the business plan of an aspiring or a start-up entrepreneur before making any decision, financial and non-financial. Particularly in this part of the world(Nigeria) it’s all about writing a good business plan in order to get funding to start that business. Do not misconstrue me; I agree that an aspiring entrepreneur should have a concept document that speaks to how the business idea is meeting a market need. However, we need to deconstruct this paradigm of business plan, and let us embrace development of business blueprint. Like the word connotes, a blueprint is a guide for making something – a design or pattern that can be followed to achieve the desired end result. So, here is the paradox, how can an aspiring or a start-up entrepreneur alone create such a plan or guide or pattern that should be followed without prior experience in starting or running a business? Albeit, the guide or pattern can still be achieved, but with the cooperation of others who have learned from working with existing and growing businesses in the market and industries i.e. the banks, business consultants, regulators and other government-related organizations.

Sometime late last year, I was at a roundtable discussion on easing access to finance for entrepreneurs in Nigeria, where the entire ecosystem of enterprise development was present, from the entrepreneurs, to banks, business consultants/business development service providers, regulators, and other government-related associations. I sat and listened to the entrepreneurs blaming the banks for lack of access to finance due to the required collateral and high interest rates; the banks responded that it is the entrepreneurs that failed to provide a good business plan; the business consultants and regulators that are not liable to neither the banks nor the entrepreneurs, comfortably blamed the banks for their stringent conditions to access finance, and that entrepreneurs lack the capability to produce a good (and bankable) business plan. I can go on to share the different blames that were thrown around the table. I sat there thinking when are we going to start discussing the real issues facing entrepreneurs that force business mortality? Issues such as access to market, access to technical know-how, purchasing the right assets and materials to start and grow a business profitably. Unfortunately, the conclusion of the discussion was that entrepreneurs should work with business consultants for training on writing a business plan, and the government should provide guarantees so that banks can relax their conditions.

Since my advent of the Integral Banking methodology with some co-researchers, my perspective on developing entrepreneurs has evolved from entrepreneurs writing a good business plan, to developing a comprehensive business blueprint that is 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 knowledge/experiences from different spheres in a particular market and industry in order to ease access to (and flow-use of) the right finance.

In co-creating a business blueprint, we must speak to what I call the 4A’s of enterprise development – Access to technical know-how; Access to market; Access to materials and assets; and Access to business performance check. Let us discuss the 4A’s one after the other.

Starting with access to technical know-how: Technical know-how is the first step towards starting any business (be it a service or a manufacturing or a processing). To gain access to technical know-how, the entrepreneur with the guidance of the business consultant and government-related organizations need to identify and obtain relevant qualification(s) or training certification(s)valuable in the business, or to partner (not employ) with an individual who possesses the technical know-how.

Moving on to access to market: My take on this is straightforward; you may have the financial, human and technical capital to start your business, but if there is no market for your service or product, or you do not know how to navigate and attract the market to your business, then the enterprise will certainly fail. The question here is how to validate that there is access to market for your business. There are two types of market – the retail, and the 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 work of the entrepreneur and the business consultant (or the banker).The wholesale market is where a supply/sale contract that can be executed with targeted industrial companies (as the off-takers of your product or service). To validate this, the business consultants and the banks need to work with the entrepreneur to create the avenue to join relevant associations where the targeted industrial off-takers are members.

The third A, access to inputs/materials and assets for production and processing determines the quality of the product or service of the entrepreneur. To validate that the third A is intact, the factors that are critical are: proximity, having more than two suppliers within your defined proximity reach to enable availability and price control, and joining the relevant association(s) within the industry to determine the kinds of material and asset suppliers, as well as determining the quality of the materials and assets used in the industry. This is the ideal role that fit the mandate of the regulators as well as any government-related organizations focused on enterprise development.

To end the 4A’s is access to business performance check. This is crucial, because there are a lot of 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 business. The business consultants (and even the banks) are supposed to act as business mentors/partners to the entrepreneurs especially those just starting and aspiring. In acting as mentors to the entrepreneurs, basic financial advisory services are provided towards uptake of cost-effective technology for operations efficiency, screening and recruitment of staff, and to enable access to the other A’s.

My conclusion is that roundtable discussions on easing access to finance for entrepreneurs should concentrate on what every stakeholder within the ecosystem of enterprise development can offer along the 4A’s, aimed at co-creating sustainable business blueprint that can attract access to finance for the entrepreneurs. This way, it is no longer a discussion of passing the blame around the ecosystem, from the banks, to the entrepreneurs, the regulators, and the business consultants.

I will leave with a quote by Simon Mainwaring that “Effectively, change is almost impossible without industry-wide collaboration, co-operation and consensus”. This is what I expect from our co-creation of business blueprints.

 

Jubril Adeojo

Fellow, Trans4m Centre for Integral Development, Geneva, Switzerland; Senior Fellow, Centre for Social and Economic Research, Nigeria

 

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