Scaling a business requires more than increased sales or access to capital. It demands an operational foundation capable of supporting growth without compromising efficiency or quality. For many MSMEs, this foundation is missing.
Weak or poorly designed operational architecture often creates hidden constraints that limit productivity, reduce profitability, and prevent businesses from achieving long-term, sustainable growth.
Every year, thousands of startups are launched promising to disrupt industries, create jobs and solve everyday problems; yet while many manage to survive their first few years, only a handful successfully scale into sustainable businesses.
High inflation, limited access to funding, foreign exchange volatility, rising operational costs, infrastructure challenges and an increasingly competitive market have made the journey from startup to scale-up even more difficult.
Olajide Yusuf, chief catalyst at Swift Catalysts Hive Ltd, speaking on Thursday during BusinessDay Morning Live show themed ‘Scaling Startups in Nigeria: From Survival to Sustainable Growth,’ emphasised that one of the very big problems confronting startups is a lack of operational architectures.
Yusuf explained that funding has always been a big dominant conversation when it comes to startups, but that there are other deeper issues preventing businesses from scaling than funding.
“What if you eventually get the fund? How are you going to manage it? One of the very big problems is lack of operational architectures,” he said.
The business consulting expert disclosed that as much as entrepreneurs are looking for other people’s money to run their businesses, they must also look at other people’s mindsets.
“You need to hire quality consultants, quality top-tier stars that are going to give you the right energy to maximise that other people’s money you are getting; else, you will stop becoming creditworthy.
“Next, you need to look at other people’s movements; that’s the people you can outsource, and/or collaborate,” he said.
On why scaling is still such a challenge in Nigeria, he said the reality is that SMEs have huge challenges crippling their vibrancy.
Currently, the government is proposing that all organisations key into the digital solutions hosted in the cloud in the foreign space, without electricity, data centres, and efficient personnel to manage those data centres.
Recall that the federal government announced that by 2027, all startups need to start using local servers, local cloud, and so on.
Yusuf reiterated that the infrastructure deficit is weakening the scalability of many MSMES in Nigeria.
“If we can do well with improving our infrastructural capacity, in terms of everything the startups need, they don’t have to depend on the external world. Then we are going to go a bit further and probably become one of the best in Africa,” he noted.
Besides, he pointed out that microeconomic shock is another clog on the wheels of MSMEs.
“Currency fluctuation and inflation are something that you cannot predict. A startup that struggles to get maybe N100 million to get started and had budgeted N30 million into assets, assets set up, and the likes.
“Overnight, everything skyrocketed, and you’ve to spend about N70 million to fix what you budgeted N30 million for, and can’t scale at that point because you can’t go back to the funders to say, there is inflation,” he emphasised.
Moreover, he said that macroeconomic shocks, which can happen through inflation, currency fluctuation, and shifts in customers’ focus, among others, weaken startup scaling, as well as premature scaling.
