Micro, Small and Medium Enterprises (MSMEs) are known to be the economic growth engine and catalyst for industrial transformation and growth. But MSMEs can only productively contribute to the development of the nation’s economy to the extent that deliberate growth oriented policy frameworks, growth strategies and functional support ecosystems that are established to stimulate and unlock the innate potentials of MSMEs in driving innovations, generating wealth, creating jobs and contributing to the nation’s Gross Domestic Product (DGP).
Against all odds, the innate excitement and aspiration of any enterprise operator is to start and grow his/her business with ease but oftentimes, this aspiration is usually cut short in the course of managing and growing the business due to a number of factors associated with the challenges of managing a functional enterprise.
United States, Small Business Administration 2019 research indicates that enterprise mortality rate is 90% suggesting that 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.
Within the context of MSME development, a functional enterprise can be referred to any enterprise that has a clearly defined corporate governance structure and established system, process and procedure that facilitate ease of doing a business and propels growth as well as access to finance and liquidity to grow and expand their business.
Understandably, managing and growing a business could be a dynamic and complex process, a functional enterprise with growth potentials is expected to be built on the premise of basic and fundamental principles of managing a successful business and not based on the rule of thumb.Incidentally, the lot of most businesses in Nigeria.
Beyond the acquisition and possession of technical skills and capacity by MSME Operators, managing and growing a successful and sustainable Business is a dynamic and complex process of connecting the various strings of the components that makes upa functional enterprise comprising of technical, strategic and operational functions.
In the 21st century, innovation, proficiency, productivity and competitiveness are the hallmarks of a functional enterprise. These critical indicators determine the functionality and growth potentials of any enterprise. There are however, strong indications that a critical mass of the 41.5 million MSMEs in Nigeria fall short of meeting these expectations and as a consequence, even MSMEs with growth potentials struggle to grow and expand including the inability to access funding to support their business growth and expansion objectives.
Essentially, beyond supply driven training and capacity building of enterprise operators, MSMEs need continuous innovative support systems and practical handholding to enable them navigate their way through the dynamic and complex process of managing and growing their businesses and that is what underscores the critical imperative of Business Development Services (BDS) to the growth of especially existing MSMEs.
Internationally, by the turn of the millennium, a paradigm shift started taking place among the Committee of Donor Agencies on the subject matter of small enterprise support sector and that crystalized into what has today become known as Business Development Services (BDS).
The Committee of Donor Agencies for Small Enterprise Development refers to Business development services (BDS) as the wide range of non-financial services used by entrepreneurs to help them improve the performance of their businesses, facilitate access to markets and finance as well as the ability to effectively compete in the market place.
The Committee considers Business Development Services as key to enhancing performance across the economy and has leveraged lessons learned from the implementation of Donor sponsored and supported MSME development intervention programmes across the world to develop best practices, frameworks and strategies to facilitate private sector led and market oriented delivery of Business Development Services as more sustainable strategy to support MSME development and growth siting the inherent shortcomings associated with Donor/Public sponsored MSME intervention programmes.
In the same vein, the Committee also recommended that Government and Donors should accept that Business Development Service provision is essentially a private sector task and activity and suggested that BDS supply should be strengthened through provider networking and improving relevant academic education. In order to address specific skills deficits of providers, matching grant schemes for business diagnostics, product &process improvement, and market research by Service Providers Associations.
Mainstreaming Business Development Services as integral part of MSME development is an emerging phenomenon and recently, industrialized countries have realized that Business Development Services are the core of what has become known as the “new economy”. In reaction to strong growth and employment creation, many industrialized countries now place ‘new SMEs’ from the knowledge-based business service sector at the center of their SME development policies.
Among numerous other contributing factors, Business Development Services (BDS), delivers innovative Enterprise Resource Planning (ERP) solutions for MSMEs to overcome their critical growth inhibitors, positions them for sustainable growth and facilitate ease of access to both traditional and innovative finance and liquidity to grow and expand their businesses.
However, to deliver a sustainable and impact oriented Business Development Services requires a dynamic and functional ecosystem that fosters deliberate interface and interplay (synergy, collaboration and partnership) between various stakeholders with the MSME sector comprising of Government and Donor Agencies as Facilitators, Suppliers of Business Development Services and Financial Service Providers. Indeed, it is a win-win for all stakeholders playing in the ecosystem within the scope of their core mandate and competencies.
The recent certification and licensing of Business Development Service Providers (BDSPs) by the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) is a step in the right direction in advancing the advocacy for sustainable market development for BDS.
Donor Agencies and Financial Service Providers are encouraged to positively response to this inspiring emerging development in the Nigeria MSME sector by strategically embracing and aligning with the Federal Government Certified and Licensed Business Development Service Providers (BDSPs) to enable BDSPs prepare and position MSMEs to meet their requirements for access to finance.
Accordingly, instead of dissipating energies in time and resources in providing supply driven training and enterprise development support for MSMEs, Financial Service Providers can simply leverage the pool of access to finance ready MSMEs already prepared and positioned by Business Development Service Providers (BDSPs).
Apparently, this emerging development will apart from stimulating and accelerating MSME development, it will also facilitate the creation of massive service oriented job opportunities for smart and enterprising young people in the MSME sector.
