Mazi Samuel Ohuabunwa, Chairman and CEO of Neimeth International Pharmaceuticals Plc., President of West African Pharmaceutical Manufacturers Association (WAPMA). Against the background of his position as Chairman Nigeria Economic Summit Group (NESG), President, Nigeria Employers Consultative Association, (NECA) and Chairman, Manufacturers Association of Nigeria, Ikeja branch, in this interview suggests ways the economy can improve. Excerpts:
Preventing Business Failures, what is all about?
Preventing Business Failures, is a book which had been researched and written with focus on need every business man to appreciate factors that make businesses fail, because if you look in the environment you can see so many businesses have failed, many are failing. And the environment is littered with such businesses. As I said, I also had set up some businesses that failed and it bordered me why should business I set up failed.
And also, I began search and research to know what is that causes businesses to fail, especially small and medium enterprises, because that is where we have a larger amount of business failures. And I found out the fact that most of the people who run these small and medium scale scarcely have the formal training in business management, even those who had didnâ€™t have the practical side of it.
So, a lot of things they try to do without adequate understanding and itâ€™s becoming much more expensive to start businesses, and so it becomes painful that those businesses fail.
And also, this matter has been accentuated by the recent global economic crisis which saw many companies fail – big companies, they say if gold will rust what will iron do, that have been in existence for many years, Layman Brothers, those American companies, local companies.
So we decided that this is the time to draw attention to the issues. And so we identified those critical issues. We made a case in this book that the business is like an organism, that those things that require an organism to grow, let say human being also are the things that businesses require to grow. They need nurturing, nutrient, they need taken care of, they need constant evaluation, just like human being will need those constant nutrient regular exercises, medical check-ups, businesses need all that also to grow. We identified that and also went ahead to discuss critical issues like cash flow.
Many businesses have failed because of cash flow. They may be profitable but they donâ€™t have cash to pay their creditors, and creditors will come and take over the business. So we spoke about the key issues of cash flow and how cash flow can be managed. We look at return on investment which is another issue which make businesses fail. How do improve return on investment; how do you grow sale, how do you profit for different type of organisations.
Then we look at other factors like finance, how do you have adequate finance, and many companies have failed because of poor financing or poor utilisation. We look at issues like corporate image, how do you sustain your corporate image. How do sustain quality of functions, operations and product quality, good image, good name for your company.
Today, many companies failed not because they didnâ€™t have money but something happened to theirÂ image. You know recently about Toyota, now if Toyota does not handle this problem well, it can cause catastrophe for the company. You remember in those days when Exxon failed, another company failed along with it, that is the consulting firm called Arthur Anderson. Arthur Anderson took a heat because itâ€™s associated with Exxon. And that company that is 50 years suddenly fail.
But a major issue we raised in this book which is not common in other books which we know they donâ€™t teach in Harvard Business School. We know when youâ€™re coming to a business or trying to buy a business or try to invest. They ask you to look at the economic environment, social environment, political environment and all sort of environment, and nobody talks about spiritual environment.
From our research and experience weâ€™ve found that the spiritual environment of a business also contributes to its failure and we drew parallelÂ and make suggestions as to what needs to be done. Finally, we also do raise the issue of planning as being central to all that weâ€™re saying. Many business men, small and medium donâ€™t do proper planning.
Some attempt to do arithmetic planning and when they now go into the business they found that there is much to it. Some do plan but because those plans are not done by them, they were done by consultants so that they can get money from the bank, they finish it and the planning is over they start acting on their head because what is in the planning is not what they want to do. So the whole places is littered with failed and failling businesses and itâ€™s our desire to help put to correct that.
And our motivation comes from SOFEE. SOFEE is Ohuabunwa foundation for Economic Empowerment. Weâ€™ve done research and is based on that, that weâ€™re writing some these books and making them available to people at a fairly reasonable price. Weâ€™ve written the first â€œEconomic Empowerment for Godâ€™s Peopleâ€ In that book we promised that this one will come, because even at that time, we did the research for both, so this is a poll off in that book Economic Empowerment.
As we said even though we wrote it with a focus of small and medium scale enterprises, we believe is applicable. Take this shop, spiritual environment, nobody teaches you whether big or small, a couple of things people do in their companies that bring down the spiritual environment and open up the place for difficulties because the Lord owns heaven and earth and He rewards everyone. You do evil you get evil, you do good you get good. So we outline some of those things we do in companies that can attract Godâ€™s favour which may lead to business success.
New tax policy, Importers are going to pay more duties on imported goods, as an industrialist, what effect will this have on business transaction here?
If people are going to pay a lot money on imported goods, it all depends on what it means. If those goods have local alternative then you better leave those ones that are imported and buy local alternatives because that I think is the objective.
To make more people patronise local made goods, because if you patronise local made goods, you are helping to build up economy, you are helping to create jobs, to reduce poverty, to distribute wealth. Unlike when you buy imported products you are taking jobs to where the product is coming from, you are taking away job from Nigeria to that place. So if the increase in cost is for local goods that have local alternative, for goods to that local alternative, then I will think that people who are affected should leave those goods and buy