Several industries are grappling with issues such as unreliable power supply and infrastructural deficiencies, while frequent adjustments in regulatory policies driven by economic pressures add to the uncertainty. Combined with shifting consumer spending habits, these challenges force businesses to continually adapt, as strategies that once worked may no longer ensure future survival, JOSEPHINE OGUNDEJI reports
Many industries face challenges ranging from inconsistent power supply to infrastructure bottlenecks, while the regulatory framework often shifts in response to economic pressures. These factors, coupled with changing consumer spending patterns, mean that businesses must operate in a climate of constant adaptation, where yesterday’s strategies may not guarantee tomorrow’s survival. For companies operating in sectors heavily reliant on logistics, these disruptions can lead to delays, cost overruns and lost opportunities, demanding a level of operational flexibility that was previously considered optional.
The energy industry continues to pose significant hurdles. Businesses dependent on a steady power supply often resort to high-cost alternatives, affecting profit margins and competitiveness. Frequent outages not only disrupt production schedules but also erode consumer confidence in the reliability of products and services. Companies that fail to anticipate these energy constraints may find themselves lagging behind rivals who have invested in resilient systems or alternative power sources.
Infrastructure challenges compound the problem. Poor road networks, limited public transport and inadequate port facilities create bottlenecks that delay the movement of goods and services. For export-oriented firms, these obstacles can translate to missed international contracts and higher shipping costs. Within domestic markets, the impact is equally profound, with extended delivery times and increased operational inefficiency undermining customer satisfaction.
Regulatory volatility adds another layer of complexity. Frequent policy adjustments, changes in tax regimes and shifting compliance requirements mean that companies must constantly monitor the legal landscape. A strategy that worked under one set of regulations may quickly become obsolete or even risky. This environment requires businesses to maintain strong legal and compliance teams capable of interpreting and responding to regulatory signals promptly.
Consumer behaviour remains unpredictable in such a dynamic context. Economic pressures, inflation and changing tastes influence spending patterns, often faster than companies can adjust their offerings. Businesses that rely on historical trends for forecasting may misjudge demand, resulting in overstocked inventories or missed revenue opportunities. Market intelligence, data analytics and agile product development become essential tools for survival.
Financial resilience is another key consideration. With external shocks such as currency volatility, interest rate fluctuations and global economic downturns, businesses must carefully manage cash flow and financing strategies. Those that over-leverage or fail to maintain liquidity risk insolvency, while companies that invest in diversified revenue streams and contingency planning are better positioned to weather uncertainty.
Innovation emerges as both a challenge and an opportunity. Companies that embrace new technologies, automate processes and explore digital channels can offset some operational inefficiencies and tap into emerging markets. However, innovation requires upfront investment, and in uncertain economic times securing funding for research and development can be difficult. The ability to balance short-term survival with long-term growth is a defining factor for business sustainability.
Know your business and solve a problem
Speaking during a panel session in 2023 on business finance at the ‘Grow with Renny Conference: Maximising Your Twenties’, the Chief Executive Officer of FezDelivery, Mrs. Seun Alley, spoke about understanding the core purpose and goals of your business.
She said, “What even makes a business viable? Do you really understand the business? Do you think that if you give this business another three years, then you will start making a profit? What are you selling? Because the business may be viable but may not be viable for you.”
Citing the logistics industry as an example, Alley described the expectations people have towards thriving industries. She noted the lack of in-depth knowledge about problem-solving products and services.
She asserted, “I will use my industry as an example. I work in the logistics space; we have over 1,000 delivery companies in Lagos alone, and a lot of us come into that market for different reasons. It is logistics, and it’s the real deal, so I am going in there. Not because you are coming into that space to solve a problem, but because you think there will be money there.”
This kind of mindset leads to failed expectations and the shutdown of businesses largely fuelled by frustration due to poor assessment of the market.
She added, “Then you come there and experience something completely different from what you had planned. Understand that business first, and the problem you are solving. Establish that there is a market for you. Then understand that it will take time. Business and excellence take time, so build and plan for 12 months. Have another plan for three years. If after five years that business that seems very viable is not possible, then that business is not for you. Maybe you should try something else.”
Extra income
The Group Head, Strategy and Business Transformation at Continental Reinsurance, Abayomi Molehin, cited instances in his personal life to corroborate Alley’s claims.
He explained, “In the first three years of my wife’s business, I would not say it was so profitable at first, but it was just barely raking it in, but she kept at it. To build sustainability in business, individuals must have extra income sources.
“What helps you to keep at it when a business is not profitable is your survival source, your sustenance – maybe the business is a side hustle, or you have a career.
“So, at that time she had a job, but she was also starting and running a business gradually. What happens sometimes is that people abruptly start a business and expect that within the next three months the business will start feeding and sustaining them. You need to give it time. Businesses take time.”
According to him, building trust and confidence in your business with customers is no walk in the park.
“That’s why when businesses start, they do a lot of freebies. All these businesses that raise funds in the form of dollars that you find today, the first years’ times are even longer, they give a lot of freebies and no charges on transfers just to capture customers. During those years of giving discounts, you will still need to survive. If you do not have something else that sustains you, you start thinking that the business is not a profitable venture.”
Molehin advocated taking a step back to assess skill sets in order to gauge business viability.
“All factors being equal, you are excellent, and your customer service is good. The industry has prospects for growth. I think what you really need during that phase is to understand that there is a stage where things will not just happen at the snap of your fingers.
“Some people start businesses in their father’s house, like Facebook and Google. Sometimes they had a place, a garage somewhere, where they were not paying rent. Steve Jobs and Bill Gates were not paying rent. They just had a place where their parents could still cater for them while they were building their business. You need to understand these contexts when you are starting and running a business.”
Opportunities
Expatiating on leveraging emerging opportunities and how business entrepreneurs can better position themselves for success and ease, Molehin prescribed awareness as a tool to make the most of opportunities.
“The first thing is to be aware of the opportunities that are available. There was a conversation I was having last year where she mentioned that the Bank of Industry had access to loans for women at single digits. If I do a survey in the room now, how many of the ladies are aware that there is a special loan available for women through the Bank of Industry at a single digit?
“At least less than 10 per cent. How many women are aware of this? So, sometimes, you may not be aware of the opportunities that exist.”
According to Entrepreneur, in periods of economic uncertainty, businesses must make critical decisions about growth, expansion and scale with clarity.
Diversify your client base and markets
It is absolutely essential to diversify your portfolio across multiple industries to reduce dependency on a specific market. This mitigates risks when certain downturns occur, ensuring there is still sustainable growth in other areas. This is the time to expand into new geographic markets. This, too, helps to spread the risk and enables companies to capture opportunities where the most growth potential lies.
Invest in innovation and R&D
For product development, focus on research and development to ensure existing products continue to meet buyer needs and expectations, aiding in sustaining their market share. It is also the time to consider new products or solutions for emerging industry needs.
Customisation can also be one of the most exciting opportunities right now. Tailored solutions that meet client requirements help to enhance value and ensure your relationship with the client is valued.
Enhance customer relationships and service
During uncertain times, companies must build customer relationships by providing exceptional service and technical support. The objective is not to secure a single positive transaction but to build long-lasting relationships with clients. This is also the time to invest in training and educational programmes for clients to ensure they continue to see the value of working with you.
Focus on quality and compliance
Regulatory compliance can be a financial nightmare when oversights lead to losses. Instead, ensure your products meet industry-specific regulatory standards and certifications, particularly in highly regulated industries such as pharmaceuticals and biotechnology.
Quality control standards must also be at the highest level possible. Rigorous quality control processes ensure the reliability and accuracy of products and services. However, be sure to do your due diligence to avoid cutting corners. Remain sharp and detailed in maintaining the quality of your equipment, customer service and service delivery so that trust from your clients remains high.
Strategic partnerships and alliances
Formulating partnerships supports growth strategies in any industry. Create strategic partnerships with other technology providers, research institutions and industry leaders. Work to co-develop new solutions and expand market reach, reducing some financial risks while enhancing product and solution development opportunities. It is also important to invest in industry associations and standard-setting organisations. This enables your company to stay ahead of regulatory changes and influence industry standards that align with your business objectives.
Agility and flexibility
Another core strategy is to deploy a flexible business model. It is not easy for all organisations, but when you can be flexible with your business model, such as offering leasing options, subscription services or performance-based contracts, you attract more business opportunities.
Also, apply flexibility and agility to your supply chain management. It is critical to ensure that your supply chain is resilient not just from a financial standpoint but also in light of geopolitical conflicts. Enhance logistics capabilities and monitor inventory control.
Marketing and brand positioning
Consistently provide industry-specific and insightful content to support your company’s reputation as an industry leader. One way to achieve this is through thought leadership. Position your company as a thought leader through white papers, webinars and participation at industry conferences.
Sustainability and corporate responsibility
Sustainability is a crucial factor across most industries. Work to implement and promote sustainable practices within your company to appeal to environmentally conscious clients and comply with increasingly rigorous regulatory pressures. Also, note that corporate social responsibility is not optional.
Financial management
Financial management must be a focal point for any publicly traded company in uncertain times. Optimise operations to reduce costs without compromising quality. This may include building more efficient processes, adopt lean manufacturing techniques and improve energy efficiency.
Ultimately, success in this climate depends on a culture of adaptability, foresight and resilience. Businesses that prioritise flexibility, diversify operations and remain attuned to regulatory and market shifts are more likely to navigate disruptions effectively.
In an environment where uncertainty is the norm, the most resilient companies are those that continuously evolve rather than cling to outdated models of operation.
