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Double digit interest rate, major challenge for Nigerian SMEs –Aderemi, Automatic Fits and Energy boss

Double digit interest rate, major challenge for Nigerian SMEs –Aderemi, Automatic Fits and Energy boss

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Ayo Alonge, ayhalliday@gmail.com

The Chief Executive Officer of Automatic Fits and Energy, Olusegun Aderemi, heads a car servicing company which is into partnership with key downstream oil players. The company is majorly into lubrication services which involves maintaining car wheels, alignment and balancing. 

In this interview, the business mogul bares his mind on the litany of challenges that greet Small and Medium Scale Enterprises (SMEs), while affirming that small businesses in the country have prospect, if certain mechanisms can be put in place by the government.

Starting up

I actually started from grass with the intention of taking it to grace. It is a business that is society-minded, and since we have started, we have never drawn back or had any course to regret. We are here because people are loving what we are doing. Apart from receiving awards, we have saved lives. It is a society business, meaning that it is what the people need. When we were starting up, we consulted the FRSC. We sat down together and thought of what is happening in the country.

The survey showed that the road accidents are due to bad roads, ranging from unaligned and unbalanced wheels. We later went back to the FRSC for another survey. It then showed that from the time we did the last one to the second, there had been a drastic reduction in the rate of road accidents. To us, we have made an impact. Those days, people didn’t even know what alignment was all about. They would just go into their cars and drive off. We promised the society safety and to help people reduce the cost of maintenance. It also saves time. People were going to the roadside vulcanisers and who would keep their cars for days because of so much work to be done on it. If you are taking a utility vehicle from someone for repairs, in the western world, you have to produce an alternative, but here, it’s not like that. What we have introduced is a quick service such that when you bring your car, we should be able to fix everything about it in a day. If you do your quick service regularly, there is no point going to the regular garage. If you have to keep going there, that means you have to change that vehicle. 

Background

It is a car servicing company. We are into partnership with the downstream oil players like Total, Forte Oil, Eleven Plc, and others. We are majorly with Total and we maintain their wheels, alignment and balancing nation wide. We also maintain engines for vehicles.

Requirement

First is the passion. Where there is passion, there will be courage and where there is courage, there will be resilience and sustainability. We try to change the narrative from what used to be the case. My primary business used to be systems. I then looked at it that since everything is being computerised today, can’t we make this one too that way? A local vulcaniser would sometimes injure himself while working and I felt things can be done better. That was what led me into travelling abroad. I thank God today, that I got trained, got the equipment and came back. Today, I can enlighten people on the business. The business is a borrowed concept from England and I am happy today that we are making progress. It has come to stay.

Challenges

The major challenge is having to bring in a new technology and having to make people embrace it. It took so long to be able to make people understand the digital method and let go of the local way. Up till date, we are still trying to ensure that. To a large extent, we have changed the orientation of people. Very few people still find it difficult embracing the new technology. Why would you prefer a roadside vulcaniser to a technology driven outfit? It would amount to being penny wise and pound foolish.

Managing competition

In Nigeria, everyone wants to go into a business that yields so much money and abandon what they are already doing. This particular one is my concept. We started it and it is to the glory of God. We made Total number one in lubricant operations today. What brings about competition is that any businesss doing very well today, everyone wants to embrace it. I see it as a welcome development. Competition for me in the business is to be able to brace up in the kind of business.

I have had to do a case study of the business in the Lagos Business School. I have traveled all around to learn more. I saw that what is being done in the UK is better than what is obtainable in the US. I have also been to Singapore and I saw that the country does it better than what is obtainable in both the UK and US. So, the next level we are taking it to is what is obtainable in Singapore. So, competition will only make me go higher, rather than edging me out of the business. 

Government collaboration

We haven’t had such at the moment. I am an LBS graduate. In the LBS, we were taught that you don’t just rush into into any business. As a matter of fact, if you see a business that is profit oriented, I mjht not even do it. I orefr going to into a bsuiebs thay is sustainable vaveie fot a business thay is profit durven, the ewya you see thr profit muhht be the sma way you see the loss. I daif thay when I wnate to start, I conducted a research with the FRSC. It takes obky a LBS to do such. An average worsen would just jump into tje business, incr it is profitable. We never had any affiliation with thr goevrment. That steooed has rekaky helped us tik bwo.

Profitability

I cannot sya the business is profitable but it us sustainable. It is a society minded business which means you shouldn’t be too mindful of profit. Just be willing to ensure that your customers have value for every kobo they are spending. That customer satisfaction is very important to us.

Government encouraging startups

First is that we have to value in all the sectors. In the banking industry and even the political terrain, there should be sanity. Value is being so eroded. We are spending too much money to create value. Let the government of the day create value. Once there is value, then we will be fine. When the system is well structured, values will be at the centre of it. Those days, parents would tell us to study hard because when you graduate, there would be good jobs waiting for your already. That disparity between the rich and the poor can easily be closed. Today, those things have been monetised. When there is value, you will be contented with the little money you have. That’s why you see some people wanting to steal in public offices.

Ease of doing business

The ease of doing business in this country has not been encouraging at all but I think we can be better. We are talking about a double digit interest rate on borrowings. That is still a very big challenge. It is eating up the profit we are supposed to be making as entrepreneurs. When you have to pay double digit as interest rate, it means you are almost sharing your profits equally with the bank. That is better than nothing though. If we have to keep paying double digit interest rate, let us get value for it. Let the infrastructure and facilities be there, like power and the rest. Let government be responsible in the area of good roads and power.

Local standard vs international best practices

As far as businesses are concerned in Nigeria, we can compete with other businesses around the world. As a matter of fact, a Nigerian entrepreneur is more resilient and it is very easy to compete with counterparts around the world. We still need to do more to match with international best practices but still, we are not doing bad at all in the area of corporate entrepreneurship. The only challenge is infrastructural deficit. Aside that, SMEs here are doing well. We can be better, anyway.

The post Double digit interest rate, major challenge for Nigerian SMEs –Aderemi, Automatic Fits and Energy boss appeared first on The Sun Nigeria.

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