5 Important SME Statistics Entrepreneurs in Nigeria Should Know
There are certain important SME statistics that you must know as a Nigerian entrepreneur. Many people fantasize about launching their businesses based on their ideas and goals. They strive to be free of workplace regulations, politics, and other forms of internal instability that can stifle their development.
People who start their businesses have the opportunity to not only be the bosses of themselves. They also become bosses of their time. Entrepreneurship allows you to make business decisions and work when and where you want.
Knowing what’s going on in the small company world, whether it’s an e-commerce store or a brick-and-mortar shop is important. It helps you to better manage your risks and possibilities. These SME statistics will help you grow your business as an entrepreneur. They will help you understand what drives small businesses, how they operate, and how they affect the economy, etc.
Top 5 Important SME Statistics Entrepreneurs in Nigeria Should Know
Here are the top SME statistics you should be aware of if you are considering starting your business in Nigeria:
Number of Jobs Created by SMEs in Nigeria
Without even knowing the exact statistic, it is clear that SMEs are Nigeria’s largest employers of labor. According to a recent survey, SMEs in Nigeria have created up to 84 percent of all jobs in the country. Small businesses are known for being the backbone of strong economies. We need to develop more small enterprises if we want to strengthen ours.
In the last five years, SMEs in Nigeria have contributed around 48 percent of the country’s GDP. They account for around 50 percent of industrial jobs and nearly 90 percent of the manufacturing sector.
Small and medium-sized businesses (SMEs) are also important contributors to innovation. These contributions differ greatly between companies, industries, and countries. Overall, SMEs play an important role in global economic growth by creating jobs, supporting sustainable industrialization, and fostering innovation.
Number of Smes in Nigeria
According to the 2017 SMEDAN National Survey, Nigeria has roughly 41.5 million SMEs. SMEs are companies with yearly revenues of less than N100 million and fewer than 300 employees. Nigeria has a higher number of SMEs than the United States. In the United States, there are only 30.7 million small businesses. Isn’t that a fascinating figure?
Small, and medium-scale Nigerian businesses firms (MSMEs) account for more than 84 percent of all jobs in the country. Micro enterprises make up the majority of MSMEs in Nigeria, accounting for 36,994,578 (about 99.8%). Lagos, Oyo, and Kano States are the top three states in Nigeria with the most MSMEs.
What Percentage of Small Businesses Fail?
One of the most common concerns among those who start their own business is the possibility of failure. And it isn’t an irrational fear. In fact, SME statistics have demonstrated that more than half of all small businesses fail within the first year. Also, more than 95 percent of small businesses fail within the first five years.
This number, however, should not deter you from beginning your own firm. It should, in fact, have the opposite effect. You may develop a business strategy to overcome potential risks by understanding the possible reasons for failure. Of course, you won’t be able to totally remove risk. However, it gives you a better idea of what you can do in certain scenarios that are likely to occur.
New Generations Are More Likely to Create a Side Business
According to statistics, the new generation of entrepreneurs is more inclined to work on the side. Millennials and Gen Zers are 188 percent more likely than Baby Boomers or traditionalists to want a side business.
Also, Millennials and Gen Zers are 48 percent more likely to start a business because of a great idea. For newer generations that want to be their own boss, the system has become much more comfortable today. It’s gotten easier to run a business from the comfort of your home. We owe this to the rise of internet marketplaces, low-code or no-code development, and outsourced development.
Top Digital Marketing Channel Among Small Business Owners
For small business owners, social media is a top choice, and SME statistics support this. In fact, 64% of small firms surveyed use social media as part of their marketing plan. According to the same survey, nearly all small firms run promotions. In the majority of cases, this advertising is done through digital media (in comparison to traditional channels).
Following social media marketing, online marketing (49%) is the most popular way of advertising. This is followed by print marketing (36%) and television advertising (3%).
Small businesses like digital advertising because it allows them to more effectively target their clients. Traditional marketing approaches reach a larger audience. However, digital marketing lets small firms reach customers who are likely to be interested in their offerings.
Social media statistics reveal that 73 percent of marketers confirm that their social media marketing efforts have been effective. It’s no longer a secret that social media is among the most effective ways for SMEs to engage consumers.
The question is, to what extent is social media effective? To understand the power of social media, you must first know how many Nigerians are enrolled on social media platforms. Nigeria had approximately 24.5 million social media users as of 2019. By 2025, the number is expected to nearly double, reaching roughly 44.63 million users. When you analyze this figure, you can see why social media and digital marketing are so important. There are numerous benefits to employing social media channels for your marketing operations.
Conclusion
There is a rapid rise in competition in the SME industry. As such, these SME statistics should assist you in making smarter decisions as an entrepreneur. Being aware of current trends and statistics will help you deal with business challenges more effectively.
