Effective Management of Small Businesses

Nigerian entrepreneur
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May 09, (THEWILL) – Many people are unaware that the small business sector in Nigeria can have a significant impact on both the environment and the economy. The sector could also provide the country with rapid industrialization and non-oil industrial export gains. All that is required is more structure, framework, support and participation from government, entrepreneurs, politicians, policymakers and academics. Growth, it is painful that despite this potential and opportunities, small businesses in Nigeria are failing at an alarming rate. Clearly, the COVID-19 pandemic, rising cost of fuel, inflation and insecurity have had harmful effects on them.

Owners of small-sized enterprises are multifunctional and while they are often constrained by day-to-day operational demands, it is important to encourage them with ways to help their businesses to become more sustainable. My focus is to continue to target the sector with knowledge of best practices in my own space. Therefore, this piece is primarily to address leadership deficiencies and stress that leadership is critical and can be a great indicator of an organization’s success or failure in the country.

No matter how small or micro a business is, the owner-manager or operator adopts a certain leadership quality to lead or govern the business. This is what is referred to as the leadership style that the business leader has, even though effective leadership is lacking in many of these businesses. As simple as it sounds, leadership style or qualities strongly impact on decision-making and the business outcomes in any scenario, it equally impacts employees significantly.

To mention, it is vital to note that true leadership in any business or organization is informed via the combination and use of power and authority. While power is the capacity to influence people to accomplish goals, authority refers to the legal rights that follow a person who holds a certain position or office. What gives issues in small businesses majorly are the unethical behaviors around power and its dispensation.

Most small business operators and entrepreneurs exhibit absolute control over all business, workplace decisions and enjoy imposing commands on staff and the management if any. More so, most of the business owner-managers, operators and entrepreneurs, particularly those based in Lagos State, continue to instill fear in their staff by threatening them with a sack and other forms of punishment. Many workers in these small businesses, although they may not show it openly, become worried as a result of this issue. This weighs them down and also affects their morale, motivation and performance in the short and long run.

When operators/owner-managers lead or run a business they apply the combination of their personality, life experiences, communication style, decision-making preference, level of emotional intelligence, education and overall perspective to the way the business is run. These attributes are typically what inform the leadership style (power) available in the business, whether it is nano, micro, small, or medium-sized. So, the question is does leadership style affect small businesses? The answer is yes, leadership style does.

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